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  • Writer's pictureThe San Juan Daily Star

Ferrer Santiago to congressional leaders: Fiscal board’s proposed sun tax is probably unconstitution

Rep. Héctor Ferrer Santiago

By The Star Staff

Popular Democratic Party Rep. Héctor Ferrer Santiago has urged U.S. congressional leaders in writing to stop the sun tax proposed by the Financial Oversight and Management Board (FOMB) for Puerto Rico, arguing several reasons, including that it may be unconstitutional.

Since 2019, the oversight board has advocated a restructuring support agreement (RSA) to settle $9 billion owed by the Puerto Rico Electric Power Authority (PREPA) as part of the utility’s bankruptcy. The oversight board has announced that it will file the RSA in federal court by March.

“Although PREPA’s emergence from bankruptcy is clearly an important goal, it cannot be at odds with the Administration’s clean energy policies from the commitments ratified in the Paris Climate accords to the norms included in the Bipartisan Infrastructure Act and in the Build Back Better bill,” Ferrer Santiago said in a letter addressed to House Speaker Nancy Pelosi and to Senate Majority Leader Charles Schumer. “FOMB’s debt deal for PREPA must not be built upon a direct breach of Puerto Rico’s progressive pro-renewables legislation,” PREPA’s RSA proposes a so-called “transition charge” of at least 2.768 cents per kilowatt-hour (c/kWh) that gradually rises to 4.552 c/kWh in 2044, gravely impacting consumers’ bills for the electricity they purchase from the grid, the freshman legislator pointed out.

“However, consumers who produce any portion of their own electricity from solar energy (described in the RSA as “behind-the-meter-generation” customers) must pay this new charge not only in power purchased from the grid, but also for their own self-generated power (a construct euphemistically described as “gross-consumption”),” Ferrer Santiago said. “Like all regressive policies, this new solar tax will mostly damage the pockets of our impoverished communities, inhibiting the economic possibilities of low-income consumers who may wish to acquire more resilient energy systems, but will suffer the substantially increasing costs in consequence.”

Furthermore, he said, consumers must also pay for a second utility meter that will track their own self-generation of power.

“This solar tax-centric approach is illegal,” Ferrer Santiago said. “Section 3.4 of Puerto Rico’s Energy Public Policy Act is unequivocal in its prohibition, stating that ‘no direct or indirect charge shall be imposed on the generation of renewable energy by consumers.’”

He goes on to note that the Constitutionality of such solar charges is questionable, as it seeks to federally impose a new tax on energy generated by privately owned solar power systems within private property.

“This legislative body spoke clearly in November 2021 when both the House and the Senate passed the Senate Concurrent Resolution 19, which expresses the wholehearted rejection of the RSA as presented by FOMB,” Ferrer Santiago said.

Nevertheless, he said, the oversight board continues its attempt to move forward with its misdirected proposal.

Strict congressional oversight over the oversight board is necessary to ensure that PREPA debt restructuring is aligned with federal as well as commonwealth energy policies, he said.

Separately, the Puerto Rico Energy Bureau (PREB) will hold a second technical workshop today related to the establishment of infrastructure, billing processes and regulations for charging and recharging electric vehicles on the island.

“As we established last November, we will be holding the second of three workshops to guarantee compliance with Article 3 of Law 33 of 2019 and continue discussing the criteria to consider as priorities to make the use of this alternative viable in Puerto Rico,” stated PREB Chairman Edison Avilés Deliz.

It was further reported that the criteria to be considered when determining priorities for the establishment of additional charging and recharging stations will be discussed at a third workshop on the topic.

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