PREPA asks energy regulator to let customers pay $36.9 million in bankruptcy fees.

The Puerto Rico Electric Power Authority is pressing the island’s energy regulator to let customers cover as much as $36.9 million in restructuring and bankruptcy-related professional fees over the next three fiscal years. (Facebook via Autoridad de Energía Eléctrica)

By THE STAR STAFF

The Puerto Rico Electric Power Authority (PREPA) is pressing the island’s energy regulator to let customers cover as much as $36.9 million in restructuring and bankruptcy-related professional fees over the next three fiscal years.

The petition comes after the Puerto Rico Energy Bureau (PREB) moved to slash the utility’s request by two-thirds during the rate review unless it proves the spending does not duplicate work billed by the Financial Oversight and Management Board’s advisers.

In a filing Tuesday in the utility’s rate review case, PREPA asked the PREB to treat the motion as a required certification of “non-duplication” and to restore full funding for its “PREPA Restructuring & Title III” line item after the regulator’s April 15 order conditionally reduced the approved amounts by two-thirds.

PREPA said it requested $18.7 million for fiscal year 2026, $11.15 million for fiscal year 2027 and $7.05 million for fiscal year 2028, but the PREB’s order approved only one-third of those totals -- $6.233 million, $3.717 million and $2.35 million, respectively -- pending the more detailed certification.

The requested 2026 amount includes payments for three firms working on the utility’s restructuring under Title III of the federal Puerto Rico Oversight, Management and Economic Stability Act, commonly known as PROMESA: $9 million for O’Melveny & Myers LLP, $8.7 million for Ankura Consulting Group, and $1 million for González & Martínez Law Offices, according to the filing.

PREPA argued that its advisers serve a different client role than the oversight board’s advisers and that multiple layers of oversight already exist to prevent redundant billing. It pointed to review of invoices by PREPA and the Puerto Rico Fiscal Agency and Financial Advisory Authority, and to fee scrutiny in the federal Title III court, which the utility said bars payment for “unnecessary duplication of services.”

The PREB’s order required certifications for adviser engagements above $500,000 identifying the matters handled and explaining why they do not overlap with work performed for the oversight board. PREPA said the underlying non-duplication framework is already in the record and warned that additional detail could risk revealing privileged legal strategy and internal government deliberations.

PREPA also cited renewed litigation activity in its bankruptcy case, saying bondholders are pursuing additional discovery and have signaled substantial litigation ahead. The utility said participating effectively -- alongside the elected government’s fiscal team -- is a “ratepayer protection” measure because the eventual debt adjustment could affect what customers ultimately pay.

PREPA said it is not seeking an overall budget increase, but a reallocation within the existing revenue requirement to cover restructuring costs it says are necessary and already tied to approved contracts. The utility asked the PREB to deem its motion the required non-duplication certification and approve the full requested “PREPA Restructuring & Title III” amounts for fiscal years 2026 through 2028.