Queremos Sol urges fiscal board against negotiating a debt deal for PREPA
By The Star Staff
The coalition Queremos Sol, which promotes the use of rooftop solar panels on the island, urged the Financial Oversight and Management Board on Tuesday to desist from negotiating a deal to restructure the Puerto Rico Electric Power Authority’s (PREPA) $9 billion debt.
U.S. District Court Judge Laura Taylor Swain gave the oversight board until next month to negotiate a new PREPA restructuring support agreement or explain why the bankruptcy case should not be dismissed. PREPA missed bond interest payments of $404,599 due April 1, according to a filing with Electronic Municipal Market Access (EMMA).
In a letter with a copy sent to the chairman of the Committee on Natural Resources in the U.S. House of Representatives, Rep. Raúl Grijalva and U.S. Reps. Nydia Velázquez (D-N.Y.) and Jesús “Chuy” García (D-Ill.), the group asked the oversight board to take into account that Puerto Rico’s economic reality makes new increases in power rates unsustainable. The island’s energy regulator recently approved a temporary rate hike of 3 cents.
“The cost of electricity reached 29 cents per kWh [kilowatt-hour] and continues to rise due to the increases in fuel prices,” said Ingrid Vila Biaggi, president and co-founder of CAMBIO, which is part of the Queremos Sol coalition, in a written statement. “Increasing the rate even more to pay bondholders is repeating all the mistakes of the past: depriving the electrical system of the funds necessary for its maintenance, cutting workers’ pensions and possibly causing another bankruptcy.”
The oversight board’s data found that future economic growth of the island depends on achieving an affordable electricity rate, below 20 cents per kWh. Queremos Sol called on the board to take its own conclusions seriously and desist from negotiating a debt deal that falls short of that goal. Doing the opposite by promoting more increases would put the future repayment of the debt at risk, the letter states.
“The only way to achieve a stable rate below 20 cents per kWh would be a massive investment in renewable energy,” said Adriana González, president of the Sierra Club of Puerto Rico. “But the government is moving toward methane gas, keeping us tied to expensive, dirty and volatile fossil fuels.”
Gov. Pedro Pierluisi Urrutia rejected a restructuring support agreement (RSA) that was negotiated in 2019 because the Legislature opposed approving a rate hike aimed at paying bondholders for the next 47 years.
Swain recently appointed mediators to help broker a new debt deal. Queremos Sol says the government and the creditors will be negotiating yet another RSA for the debt.