PREPA calls on energy regulator to act on subsidiaries petition
By The Star Staff
The Puerto Rico Energy Bureau, which will be charging a $20 million regulatory charge to energy utilities in 2023 to fund its operations, has failed to act since September on a Puerto Rico Electric Power Authority (PREPA) petition to create subsidiaries.
On Sept. 14, PREPA filed a document titled: “Petition for Leave to Create Subsidiaries and for Approval of the Puerto Rico PREPA-GENCO-HYDROCO Operating Agreement.”
In essence, the petition asks the Energy Bureau (PREB) to grant it leave to create three PREPA subsidiaries identified as PREPA GenCo LLC, PREPA HydroCo LLC and PREPA PropertyCo LLC, and to approve the PREPA-GenCo-HydroCo Operating Agreement.
GenCo is proposed as the legal entity that will own and operate (or delegate the operation of) PREPA’s legacy thermal generation assets, while HydroCo is proposed as the legal entity that will own and operate (or delegate the operation of) hydroelectric and irrigation assets, employees, vehicles, software, and contracts and assets related to it.
PropertyCo, meanwhile, is proposed as the legal entity that will own and operate or delegate the operation of the PREPA assets not related to the transmission and distribution system, the legacy thermal generation assets or the hydropower assets.
The petition was filed with the PREB and the approved fiscal plans by the Financial Oversight and Management Board, the Puerto Rico Transmission and Distribution System Operation and Maintenance Agreement, and the Puerto Rico Transmission and Distribution System Supplemental Terms Agreement between PREPA, the Puerto Rico Public-Private Partnerships Authority and LUMA Energy LLC.
“Despite the Petition for Approval having been filed over three months ago, the Energy Bureau has not yet acted on it nor has PREPA received requests for further information in connection therewith,” PREPA said in a petition filed December 22. “PREPA urgently requires the approval of its Petition for Approval so that it may actively engage without further delay in the organizational efforts conducive to the inception and statutory compliance of the aforementioned subsidiary entities.”
Meanwhile, on Thursday, the PREB announced that it was charging a $20 million per year regulatory charge, whose cost will be divided among all energy facilities. PREPA will cover about $16 million.