Multisectorial Board calls for governor’s intervention in PREPA PAD impacts
By THE STAR STAFF
The Multisectorial Board on Monday urged Governor Pedro Pierluisi Urrutia to intervene in the possible adverse effects of the recent debt adjustment plan (PAD by its Spanish acronym) of the Puerto Rico Electric Power Authority (PREPA) on the island.
“We are concerned that the new PAD continues to prioritize unsecured debt before the needs of the electrical system and our economic development,” said Bishop Lizzette Gabriel Montalvo, of the Methodist Church of Puerto Rico, in a written statement.
In the letter, signed by more than 60 organizations, Pierluisi is asked to seek funds to ensure the present and future pensions of PREPA, reduce the impact on electricity rates, and promote a reliable and accessible energy system before liquidating the unpaid debt guaranteed for PREPA’s historical creditors.
They stated that according to PREPA’s most recent PAD, which was proposed on Aug. 25, new bonds worth $2.3 billion are planned to be issued to pay PREPA bondholders. The plan also contemplates significant disbursements, including up to $400 million to cover legal costs associated with PREPA’s bankruptcy.
“The [oversight] Board’s proposal arises at a time of uncertainty for the 12,000 PREPA retirees and their families, who have faced the insolvency of the retirement system since April of this year,” said Johnny Rodríguez, president of the PREPA Retirees Association.
Yandia Pérez, executive vice president of the Puerto Rico Manufacturers Association, emphasized that local businesses cannot support the rate increases proposed under the new PAD because they threaten the existence of local industry and the potential to attract new companies to the island, something that would result in a loss of jobs and a possible significant decrease in the island’s gross national product.
Monchito Ortiz Erazo, president-elect of the Gasoline Retailers Association, added that the proposed increases could translate into additional annual costs of $5,000 or more for a gas station, accumulating to $175,000 over 35 years, which would have a devastating effect on the economy of the island and would cause increases in fuel prices.
The letter also highlights the need to prioritize and guarantee resources for a stable and reliable electrical system in Puerto Rico, in accordance with Law 17-2019, with competitive and accessible rates below 20 cents per kilowatt-hour (kWh) as established by law. The signatories insisted that the oversight board’s recent proposal still does not meet those objectives.