By The Star Staff
An umbrella group comprising 50 organizations from different sectors urged municipalities on Thursday to speak out against power rate hikes resulting from the Puerto Rico Electric Power Authority (PREPA) debt adjustment plan.
The Junte Multisectorial (Multi-Sector Group) noted that the municipalities of Juana Díaz, Comerío and Manatí have already come out against the plan to pay off some $9 billion in utility debt.
“We are at a key moment in PREPA’s bankruptcy process,” said Cathy Kunkel, an energy expert and spokesperson for the group, in a written statement.
“PREPA bondholders have insisted that they be paid the full $8.5 billion in bonded debt through abusive rate increases over the next 35 years or more,” Kunkel stressed.
The Multi-Sector Group is urging municipalities to approve resolutions that explain to the court the adverse effects of the increases on their residents. The resolutions will allow U.S. District Judge Laura Taylor Swain, who is overseeing PREPA’s bankruptcy process, to discuss the impact of rate hikes and poor electricity service on the island, the group said.
In June, the U.S. First Circuit Court of Appeals in Boston allowed bondholders, led by GoldenTree Asset Management, to insist on payment of 100% of the debt, which would require much higher increases than initially proposed. In July, Swain ordered parties back to the negotiating table, citing the First Circuit Court of Appeals ruling that found that the bonds were secured by $8.5 billion in net revenues. That decision overturned her earlier ruling, which found that the bonds were backed by only a $2.4 billion unsecured claim, and may have upended the plan of adjustment.
Cristina Palacios, director of La Liga de Ciudades de PR (League of Cities), stressed the need to focus resources on rebuilding the electricity system rather than paying bondholders.
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