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  • Writer's pictureThe San Juan Daily Star

Groups across sectors ask Legislature to investigate impact of PREPA debt deal

Ramón Ortiz Erazo, third from left, president-elect of the Gasoline Retailers Association

By The Star Staff

Religious, commercial, professional, union, environmental, community, educational, cultural and pensioner groups sent a letter to legislative leaders over the weekend calling for a probe into the economic impact of the Puerto Rico Electric Power Authority’s (PREPA) debt adjustment plan (PAD by its Spanish acronym).

The letter’s signatories insisted that the Legislature must advocate for fair and economically sustainable PREPA debt restructuring for Puerto Rico as it is its duty.

“It is urgent to investigate with public hearings the consequences that this [debt adjustment plan] would have on the country if the Court confirms it,” said Ramón “Monchito” Ortiz Erazo, president-elect of the Gasoline Retailers Association. “For several months now, we have been raising the flag about the serious economic impacts that the new PAD would impose on all sectors of the country.”

“In the case of gas stations, we cannot endure any more electricity increases to pay an unsecured debt that can be canceled,” he added. “For us, more increases mean business closures and price increases for our consumers.”

The PAD proposes issuing $2.3 billion of new debt, financed by electricity bill increases that will last 35 years or more. Likewise, it contemplates hundreds of millions of dollars in cash payments, including up to $400 million for paying fees related to PREPA’s bankruptcy case and hundreds of millions to some of PREPA’s bondholders.

Iyari Ríos González, outgoing president of the Economists Association of Puerto Rico, emphasized that several economic and financial studies have already indicated the impact that more hikes in the electricity bill would have on Puerto Rico’s economy, causing more increases in the cost of living, migration, business closures and unemployment.

“It is unacceptable and irresponsible for the Financial Oversight and Management Board to agree to this debt adjustment plan without publishing any analysis of the impact that this plan would have on the economic development of the country or the recovery of the electrical system,” Ríos González pointed out.

The oversight board has acknowledged in PREPA’s certified fiscal plan that the PAD will be extracting money to pay the debt that could be used to rebuild and modernize the island’s electrical system.

Juan Rosario, executive director of the Alliance for Sustainable Resources Management (AMANESER 2025) and former consumer representative on the PREPA board, said “our electrical system is in a critical situation that puts human life at risk.”

“How PREPA’s debt is restructured will have a significant impact on the possibilities of complying with the system’s transformation to a reliable and resilient one,” he said. “Every dollar we pay to bondholders is a dollar that is not available for the energy transition that is urgently needed.”

Meanwhile, Johnny Rodríguez, president of the PREPA Retirees Association, pointed out that the 12,000 PREPA retirees continue to live with the uncertainty of not knowing if their pensions will continue to arrive, given the insolvency of the utility’s retirement system.

The oversight board continues to propose cuts to pensions in the PAD but without resolving the crisis in the PREPA Retirement System, he pointed out.

“It is time for the government to act to give priority and security to all these families by guaranteeing the payment of our current and future pensions,” Rodríguez said. “Our organizations have proposed ways to do this while minimizing the impact on the rate.”

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