Governor submits response to fiscal board’s suit to invalidate Act 10

Gov. Pedro Pierluisi, left, and Omar Marrero Díaz, the executive director of the Puerto Rico Fiscal Agency and Financial Advisory Authority

By The Star Staff

Gov. Pedro Pierluisi Urrutia on Thursday submitted his response to a lawsuit filed by the Financial Oversight and Management Board for Puerto Rico seeking to invalidate Act 10-2-24 (Act 10), a law designed to promote net metering.

Act 10 would stop the Puerto Rico Energy Bureau (PREB) from making any changes to the current net metering and energy distribution policy until at least 2031.

The island government said it remains committed to transforming Puerto Rico’s energy system and transitioning to clean and renewable energy, as established in the energy public policy embodied in Act 17-2019.

“As it has done since day one, the Pierluisi Administration will continue to defend the Government’s energy policy and support the transition of the Puerto Rico Electric Power Authority (PREPA) to a modern, resilient, reliable, and sustainable energy system, while preserving the rate-setting powers of the Puerto Rico Energy Bureau (PREB),” noted Omar Marrero Díaz, the executive director of the Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF by its initials in Spanish). “Contrary to unsubstantiated assertions by the Oversight Board, the Government maintains that Act 10 reflects the energy policy of the elected Administration and is consistent with PREPA’s Certified Fiscal Plan.”

Act 10 advances the distributed generation mandate of PREPA’s Fiscal Plan, which provides for a reduction in utility-scale generation and requires an expansion in distributed generation capacity through the continued installation of rooftop solar photovoltaics.

Importantly, Marrero said, solar conversion supports PREPA’s long-term transformation process by providing much-needed immediate generation capacity while relieving PREPA’s overburdened and understaffed generation fleet. Overriding Act 10 would not only be contrary to the will of the elected Administration, but also, more importantly, would threaten PREPA’s ability to continue to meet its obligations under the Fiscal Plan, he said.

To date, PREPA has been able to comply with the Fiscal Plan’s Distributed Generation Mandate only because PREPA’s existing net metering program provides incentives that drive continued expansion of solar conversion. If the net metering program were modified, especially in a way that would reduce or eliminate incentives for solar conversion, PREPA’s ability to meet its Fiscal Plan obligations would be adversely affected, the AAFAF chief pointed out.

As Puerto Rico continues to face unprecedented heat waves that are affecting PREPA’s fragile electric system, it is imperative that the government and the oversight board promote and incentivize solar conversion, as well as compliance with the Distributed Generation Mandate, Marrero said.

Contrary to the oversight board’s assertions, Act 10 does not seek to limit the regulatory power of the PREB, the official asserted. Rather, Act 10 seeks to provide PREPA with an additional path to build its generating capacity while continuing to develop PREPA’s long-term electrical generation projects.

Invalidating Act 10, Marrero insisted, not only jeopardizes PREPA’s ability to meet its Fiscal Plan obligations, but also limits much-needed increases in PREPA’s short-term generating capacity and undermines the Pierluisi Administration’s concerted actions to maintain and build momentum in PREPA’s transition to a modern, resilient, reliable and sustainable energy system.