Judge rules disclosure statement for PREPA debt plan is adequate

U.S. District Court Judge Laura Taylor Swain

By The Star Staff

U.S. District Court Judge Laura Taylor Swain ruled Tuesday that the disclosure statement for the Puerto Rico Electric Power Authority’s debt adjustment plan restructuring some $9 billion in debt contains enough information for creditors to make an informed decision when they vote on it.

The judge who is overseeing Puerto Rico’s Title III bankruptcy cases did ask for the inclusion of information to the effect that the Puerto Rico Energy Bureau is the entity in charge of making decisions as to rate increases, but dismissed most objections presented to the effect that the plan was unconfirmable. She also said she would analyze further down the road whether there had been some “gerrymandering” or manipulation of creditors to obtain a majority for approval of the plan.

The judge did not discuss plans from the government to turn the current retirement system into a pay-go system.

Gov. Pedro Pierluisi Urrutia insisted on Tuesday that there should be no talk of imposing additional charges on the electricity bill at a time when the discussion in the federal court of the public corporation’s debt adjustment plan is beginning.

“What I’m saying is don’t cross the bridge until you get to it,” the governor said in response to questions from the press. “At the time, it must be included in the budget and at the time the Energy Bureau is the one that sets the base charge that is paid. Something that I am sure that we are going to continue doing is honoring the subsidies that low-income people have received in Puerto Rico.”

The document that the Financial Oversight and Management Board submitted for Judge Swain’s consideration includes a hybrid charge for residential and commercial customers, as well as an increase in the cost of a kilowatt-hour of electricity.

Pierluisi Urrutia insisted that it will be up to the Energy Bureau to evaluate the imposition of additional charges and the Electric Power Authority should include the costs of those payments in its budget.