PDP senators object to use of rates to pay PREPA’s pensions

The Popular Democratic Party minority delegation in the island Senate denounced what they described as a deliberate decision by the administration of Gov. Jenniffer González Colón and Energy Czar Josué Colón Ortiz to impose a new charge on electricity bills, despite having three alternative options to avoid passing pension costs associated with the Puerto Rico Electric Power Authority on to consumers.

By THE STAR STAFF

The Popular Democratic Party (PDP) delegation in the Senate held a press conference Monday morning to denounce what they described as a deliberate decision by the administration of Gov. Jenniffer González Colón and Energy Czar Josué Colón Ortiz to impose a new charge on electricity bills, despite having three alternative options to avoid passing pension costs associated with the Puerto Rico Electric Power Authority on to consumers.

“Recently, the country was hit with the shocking news that electricity bills would increase by two cents per kilowatt-hour to cover pension payments for retired employees of the Puerto Rico Electric Power Authority (PREPA),” said Sen. Luis Javier Hernández Ortiz, the PDP minority leader in the upper chamber. “Through a formal request for information, we asked the Public-Private Partnerships Authority (P3A) what alternatives were considered by the energy czar and the governor’s administration to avoid this increase.”

According to the response from the P3A, the proposed increase stems from a requirement in the Fiscal Plan certified by the Financial Oversight and Management Board.

“This charge was not a decision made by the government of Puerto Rico, but rather a fiscal mandate from the board,” Hernández Ortiz said the agency told the PDP.

The minority leader criticized the administration’s stance, saying, “In other words, Governor Jenniffer González’s government chose to shift all responsibility for the increase onto the federal board, blaming it for raising electricity rates to fund PREPA retirees’ pensions.”

The PDP delegation sent a letter to the oversight board on Oct. 30 requesting confirmation on whether the increase originated from the entity. As of Monday, they were still awaiting a response, Hernández Ortiz said.

The P3A’s reply also revealed that the government had other options that would not have resulted in higher electricity bills, he added.

“What we don’t understand is why these alternatives weren’t considered,” the senator said.

Alternate minority leader Marially González Huertas outlined one such option: a 10% reduction in the operational budgets of LUMA Energy, the electric power transmission and distribution system operator and power plant operator Genera PR, redirecting those funds to pension payments.

“This could be done simply by identifying inefficiencies and cost overruns in these companies and cutting funds that are currently being sent but not used for their intended purposes,” she said.

Sen. Josian Santiago Rivera, chairman of the Senate Municipal Affairs Committee, pointed to another possibility.

“The government itself has acknowledged that PREPA transferred $496 million from its reimbursement accounts to cover LUMA’s operational expenses. If the government were to demand that LUMA repay those funds through monthly installments -- up to $25 million per month -- this would strengthen PREPA’s liquidity and allow those funds to support the retirement system.”

Sen. Ada Álvarez Conde presented a third alternative: a short-term loan to cover pension obligations for fiscal year 2025. She also noted that since pensions are classified as “legacy debt” under the Puerto Rico Oversight, Management and Economic Stability Act, commonly known as PROMESA, a judicial restructuring process in federal court could lead to a sustainable agreement that ensures pension payments without burdening consumers.

Former Senate President José Luis Dalmau Santiago emphasized the significance of the two-cent increase.

“Retiree advocacy groups have been clear: it is not necessary to raise electricity rates to fund pensions. The government must consider other options,” he said.

“Clearly, the government had other alternatives, and we’ve laid them out here,” Hernández Ortiz said. “But they chose the one that hurts our people the most -- passing the cost onto consumers. Today, they owe the country an explanation.”