Head of incoming gov’t transition committee scolds PREPA governing board

By The Star Staff

The chairman of the incoming government transition committee, Ramón Luis Rivera Cruz, on Tuesday criticized the governing board of the Puerto Rico Electric Power Authority (PREPA) for ratifying Efran Paredes as executive director of the utility instead of allowing the incoming government to make the decision.

“I would at least have waited for a dialogue with the new governor to tell him what we are doing and at least there would have been that communication,” Rivera Cruz said. “That’s the least I would have expected.”

However, most of the discussion at Tuesday’s government transition hearing centered on the 15-year contract signed with LUMA Energy. Paredes said a small office with expertise on energy affairs should be managing the contract, not the Public Private Partnership Authority.

Rivera Cruz noted that PREPA has very little say about the ultimate liability of the actions undertaken by LUMA Energy. For instance, at a time when PREPA is slated to get some $10 billion in federal aid for repairs, LUMA Energy will be able to award up to $30 million in contracts without the input of PREPA. The contract has very few guidelines on the metrics for measuring LUMA Energy’s performance in order to award it incentive payments. Governor-elect Pedro Pierluisi wants to amend the contract but he has not been forthcoming about specific amendments.

When Rivera Cruz asked Paredes about specific changes he would like to see in the LUMA Energy contract, the PREPA executive said he does not see an organized transition because very little information has been given to employees to help them decide whether they should move to LUMA Energy or leave PREPA for another government agency.

“All they are doing is publishing job notices with little information, and that is causing a lot of problems,” Paredes said.

Under the government’s energy policy transformation, all PREPA employees were supposed to move to the new entity with the same salaries and benefits, but that has not been the case. LUMA Energy refuses to accept the working conditions established in the collective bargaining agreements with the unions. PREPA’s unions, including the Electrical Industry and Irrigation Workers Union, have told employees to refrain from applying for jobs with LUMA Energy.

PREPA employees who do not want to work for LUMA Energy will have to get new jobs in the government, which is in bankruptcy and will have to make cuts.

“The government will have a problem if not all of the workers opt to move to LUMA Energy,” Paredes said. “They have been calling people and telling them that if they do not get enough workers from PREPA, they will hire new outside workers.”

PREPA Finance Director Jaime López said that as of last Friday, LUMA Energy had made 423 job postings and 7,508 applicants had applied. Of those, 2,224 applications come from some 708 PREPA workers who have applied for more than one position. About 1,000 of the 5,480 PREPA employees work in generation and not in transmission and distribution.

Rivera Cruz asked Paredes about what led PREPA toward bankruptcy if it is one of the public entities with the highest income, but then interrupted him to scold PREPA’s board for giving Paredes and two other officials about $36,000 in differential payments at a meeting last week and giving some top officials salary raises.

When PREPA Governing Board Chairman Ralph Kreil said such benefits and salaries are the same ones enjoyed by other officials in the past, Rivera Cruz reminded him that the utility is in bankruptcy.

“You have said in documents given to us that you expect to end the year with a $500 million loss,” Rivera Cruz said.

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