Multisectoral group urges opposition to PREPA’s debt adjustment plan

Johnny Rodríguez, president of the Puerto Rico Electric Power Authority Retirees Association

By The Star Staff

The Multisectoral Board wrote to the four gubernatorial candidates this week, asking them to oppose the power rate hikes proposed by the Financial Oversight and Management Board and the Puerto Rico Electric Power Authority (PREPA) bondholders to pay the utility’s debt.

The board, composed of commercial, religious, union, professional, educational, environmental, and community organizations, made the call to stop the devastating impact that they said the increases would have on the island’s economy, the electrical system and the pensions of thousands of retirees.

The parties in PREPA’s bankruptcy case are in mediation to negotiate a settlement of PREPA’s $9 billion debt. The settlement could result in power rate hikes to pay the debt.

The letter, signed by more than 40 organizations, highlights the critical situation of the island’s electrical system due to frequent blackouts, lack of maintenance, and the precariousness of the generation, transmission and distribution systems that affect both consumers and businesses, which already suffer the consequences of unreliable service.

“Puerto Rico’s electrical system cannot support a rate increase that extends for more than 35 years, much less when it is in such deteriorated condition that it causes constant blackouts and economic damage to families and businesses. It is essential that the candidates for governor commit to finding solutions that prioritize the well-being of the people and the recovery of the electrical system over the payment of the debt in bonds,” said attorney José Pou of the Institute of Competitiveness and Economic Sustainability. “Diverting billions of dollars to pay the debt, as the bondholders insist, would perpetuate a dysfunctional electrical system.”

Johnny Rodríguez Ortiz, president of the PREPA Retirees Association, emphasized the importance of the candidates for governor committing to protecting retirees’ pensions.

“More than 10,000 pensioners face the uncertainty of not having an established source for their pensions starting in December,” he said. “These people gave their working lives to build Puerto Rico’s electrical system, and now we cannot leave them unprotected in the face of this crisis. We need a clear commitment from our future leaders.”

The letter, sent to Juan Dalmau Ramírez (Puerto Rican Independence Party-Alliance, Jenniffer González Colón (New Progressive Party, Javier Jiménez Pérez (Dignity Project) and Jesús Manuel Ortiz González (Popular Democratic Party), denounces the strategy of the bondholders led by GoldenTree Asset Management, who insist on recovering the entire debt at the expense of the people of Puerto Rico, even though they acquired the bonds knowing the precarious situation of PREPA after Hurricane MarIa.

“It is unacceptable that speculators like GoldenTree seek to obtain exorbitant profits at the expense of our energy and economic recovery,” said Cathy Kunkel of the No More Increases to Electricity campaign. “Candidates must position themselves in defense of the public interest and the urgent need to rehabilitate the electrical system, not the extractive interest of bondholders.”

The Multisectoral Board urged the candidates to prioritize reconstructing a reliable, accessible and sustainable electrical system for Puerto Rico.