Gov’t comes out in support of rate hike to pay pensions

Gov. Jenniffer González Colón meets with the Financial Oversight and Management Board in March regarding the funding crisis in the Puerto Rico Electric Power Authority’s retirement system. Robert Mujica, the oversight board’s executive director, is at left.

By The Star Staff

The administration of Gov. Jenniffer González Colón came out Sunday in support of the proposed increase of 1.88 cents per kilowatt-hour (kWh) in electricity rates to cover the pensions of Puerto Rico Electric Power Authority (PREPA) retirees.

PREPA owes more than $4 billion to its retirement system, which serves some 12,500 retirees. Currently, it requires $25 million per month, which has been covered with temporary loans from the General Fund since March.

“There is no other option,” stated Secretary of Public Affairs Hiram Torres Montalvo, confirming that the government supports the measure promoted by the Financial Oversight and Management Board.

Torres said the impact will be less thanks to a recent reduction of 0.60 cents per kWh that is temporary.

“It’s a measure with the lowest possible impact,” he said. “Even so, the governor is committed to continuing to seek efficiencies, which could translate into additional reductions in electricity rates in the medium term.”

PREPA said the proposed hike was the only option after evaluating other alternatives.

The proposal came after LUMA Energy separately proposed to increase the average monthly residential bill by $19.16, or just under 63 cents a day, as part of the rate case. Rate changes would go into effect starting in September or October 2025.

LUMA said last week the hike would help fund new investments in the system.