PREPA bondholders, project developer seek to intervene in IRP development process.

Puerto Rico Electric Power Authority bondholders and the local firm promoting a subsea power transmission line between Puerto Rico and the Dominican Republic have moved to intervene in the development of the Integrated Resource Plan, a master blueprint that will determine the island’s public policy on generation mix, grid modernization priorities, and renewable energy targets for the future. (telecomtv.com)

By THE STAR STAFF

Puerto Rico Electric Power Authority (PREPA) bondholders and the local firm promoting a subsea power transmission line between the U.S. island territory and the Dominican Republic have moved to intervene in the development of the Integrated Resource Plan (IRP), a master blueprint that will determine the island’s public policy on generation mix, grid modernization priorities, and renewable energy targets for the future.

Both parties claim they are uniquely positioned to safeguard their interests during development of the IRP, according to filings with the Puerto Rico Energy Bureau’s (PREB) case NEPR‑AP‑2023‑0004.

National Public Finance Guarantee Corp., Golden Tree Asset Management, Syncora Guarantee, Assured Guaranty, the Majority Prepa Ad Hoc Group, and the PREPA Ad Hoc Group hold 90% of PREPA’s bonds, which, according to a federal Appeals Court ruling, are secured by PREPA’s net revenues. The bondholders noted that if PREPA’s generation is systematically inadequate to meet demand, PREPA will forgo revenues on power that could have been sold to customers but was not.

They said PREPA’s inefficient generation mix may limit system funding and impact revenues. If the demand forecast is off, there may be too little or too much generation capacity. Bondholders said they can contribute IRP expertise without causing delays to the process. 

Rolando Emmanuelli, a lawyer, noted that bondholders oppose using revenues for capital expenditures because of an ongoing legal dispute in PREPA’s bankruptcy over whether those revenues qualify as current expenses.

“If CAPEX [capital expenditure] is ruled as current expenses, all revenues could be spent on improvements, and bondholders cannot collect,” he said in a radio interview. “This is for the judge to decide.” 

The bondholders, creditors with claims against the debtor, are also intervening in the rate case before the PREB and seeking to have the federal bankruptcy case judge, Laura Taylor Swain, lift the automatic stay and dismiss the case.

Meanwhile, Caribbean Transmission Development Co. LLC (CTDCo), a project developer proposing a 700 megawatt subsea transmission line between Puerto Rico and the Dominican Republic, has requested to intervene in the ongoing IRP review, thereby positioning itself as an additional influential stakeholder as the proceeding rapidly expands in scope and complexity.

The firm contends that its proposed Project Hostos received in February a presidential permit to work on the project with the Dominican Republic. However, LUMA Energy, the operator of PREPA’s transmission and distribution system, placed the project in a Plan K scenario, which is not LUMA Energy’s favored one for the IRP.

The firm said LUMA Energy has provided inaccurate information about the project, which may affect the public and private financial markets’ perception of it.

CTDCo’s intervention request comes as Puerto Rico’s grid faces scrutiny for reliability, underinvestment and slow renewable adoption. Transmission-focused companies see an opportunity for large-scale modernization as federal funding and regulatory reforms alter the market.

The PREB has yet to decide on the intervention requests.