Proposed ‘sun tax’ comes under fire at Senate hearings on PREPA debt repayment
By The Star Staff
The Senate Committee on Strategic Projects and Energy, chaired by Popular Democratic Party Sen. Javier Aponte Dalmau, began public hearings on Wednesday to investigate the mechanisms that will be used to repay the Puerto Rico Electric Power Authority (PREPA) debt.
The utility has been in bankruptcy since 2017 to restructure some $9 billion in debt.
The hearings focused on the so-called sun tax, which consists of 2.73 cents per kilowatt-hour added to the utility bills of property owners that use solar energy as part of the restructuring. Maritere Padilla, director of public policy of the Hispanic Federation, and Javier Rúa Jovet, principal public policy officer of the Puerto Rico Solar Energy and Storage Association testified at the hearing.
Rúa Jovet emphasized that “there is a clear and present risk this year around the approval of the so-called Restructuring Support Agreement (RSA) of PREPA, which is promoted by the Financial Oversight and Management Board on behalf of PREPA bondholders and which proposes a series of illegal charges that would seriously impact the people of Puerto Rico, particularly those PREPA customers who seek to self-generate all or part of their energy through solar: an illegal tax on the sun.”
Beyond stopping the senseless promotion of solar taxes, the people of Puerto Rico deserve a rational conversation between all parties to achieve politically possible solutions that are beneficial for everyone including PREPA’s multibillion-dollar debt, he said.
Padilla expressed great concern with the proposed RSA because customers who generate their own energy “behind the meter” must pay a transition charge on that generation in accordance with a formula established in the agreement.
“The energy that you produce yourself in your home or business using solar systems, windmills, electric generators or any technology that you decide to use to generate your own energy will apply the transition charge and you will have to pay it even if you have generated [the energy] on your own,” she said.
At the public hearing, it was revealed that the RSA agreement goes against Act 17-2019, known as the Puerto Rico Energy Public Policy Law. The law requires Puerto Rico to draw 40 percent of its energy from renewable sources by 2025, 60 percent by 2040 and 100 percent by 2050.
“This [the RSA] not only discourages the integration of renewable energy into the grid, it is also contrary to the prohibition established in Law 17-2019 of any direct or indirect charge on the self-generation of renewable energy by prosumers,” added Padilla, who is an attorney.
The public hearings held by the Strategic Projects and Energy Committee seek to gather information on the problems that organizations have had in complying with Act 17 and explore alternatives.
“The information that [the witnesses] have given us is that the economic projections of what this entails are devastating,” Aponte Dalmau said. “Both for the population that would be impoverished and for the country’s economy because it would increase energy costs in an unthinkable way.”