Fiscal board takes issue with House measures that seek to intervene in island energy policy
By The Star Staff
The Financial Oversight and Management Board has come out against several bills in the Legislature that relate to the Puerto Rico Electric Power Authority (PREPA).
“The Oversight Board has expressed concerns regarding several bills and continues to share its concerns with the Legislature to ensure that the bills are not significantly inconsistent with the certified fiscal plans or PROMESA [the Puerto Rico Oversight, Management and Economic Stability Act],” the entity said.
The bills of most concern to the oversight board include House Joint Resolution (HJR) 315, which, among other things, purports to require the termination of the Operation and Management Agreement (OMA) between PREPA and LUMA Energy within 60 days of its enactment for supposed breaches of contract by LUMA and its subsidiaries, and would order PREPA to administer the OMA during the 60-day transitionary period and subsequently take control of transmission and distribution (T&D) operations.
As clearly stated in the current certified fiscal plan, LUMA’s continued operation of PREPA’s T&D system is required and is critical to the success of the fiscal plans and Puerto Rico’s energy future, the board said.
The oversight board is also concerned about House Bill 1397, which, among other things, exempts from the Public Private Partnership Authority’s (P3A) supervision all P3 contracts in which PREPA is the participating government entity.
“HB 1397 appears to conflict with the efforts by the Government and the Oversight Board to reform the PREPA energy system over the past five years,” the board said.
The oversight board also criticized HJR 235, which purports to, among other things, mandate that the P3A refrain from awarding an operation and maintenance or similar contract for the private operation of PREPA’s generation assets until July 1, 2023.
“HJR 235 appears to intentionally delay implementation of the certified 2022 PREPA Fiscal Plan requirements that PREPA assets transition to private operation,” the board said.
“The Oversight Board continues to monitor this legislation and correspond with the Government regarding its concerns,” the entity said. “The Oversight Board will undertake appropriate action.”