By The Star Staff
The Financial Oversight and Management Board on Thursday filed an amended proposed plan of adjustment to restructure the debt of the Puerto Rico Electric Power Authority (PREPA), including a schedule to repay the reduced debt.
The amended plan proposes to cut PREPA’s more than $10 billion in debt and other claims by almost half, to some $5.68 billion. The plan would allow PREPA to end its bankruptcy and provide the financial stability necessary to invest in a modern, resilient and reliable energy system essential for the Puerto Rico economy to grow, the oversight board said. The substantially reduced debt would be paid by a hybrid charge consisting of a flat connection fee and a volumetric charge based on the amount of PREPA customers’ electricity usage that would be added to electricity bills.
“Every board member is keenly aware that this PREPA legacy charge is painful for Puerto Rico, its residents, and its business,” said David Skeel, the chairman of the oversight board, in a written statement. “Customers are not to blame for PREPA’s bankruptcy. That is why the Oversight Board continues to be mindful of the effect even greatly reduced debt payments would have on Puerto Rico’s residents and households when negotiating a Plan that we believe the U.S. District Court should confirm. PREPA has not been required to pay its debt while it is in bankruptcy, but there is no legal way to erase PREPA’s liabilities completely. PREPA needs to move on from this bankruptcy and return its focus to servicing Puerto Rico’s power needs.”