PREPA overhaul bill ‘mortal blow’ for citizens, industry
A group of representatives for Puerto Rican consumers, businesses, industries, and workers warned Sunday that the legislative approval of the Puerto Rico Electric Power Authority Revitalization Act will deliver “a mortal blow” to the island’s already critical economic situation.
During a news conference, sector representatives warned that approval of the bill — of which there are identical versions under review at the House (House Bill 2742) and the Senate (Senate Bill 1523) — would be “harmful to consumers, commerce, industry and labor,” given that, among other dispositions, it would revert to PREPA the control over rates, limit the powers of the Puerto Rico Energy Commission as an independent regulator in tariff review procedures, including review of PREPA’s Integrated Resource Plan.
“The Commission, as an independent regulatory body, should have full powers on the evaluation and validation of proposed increases and is a cornerstone in the change we must start in our electrical system as a main driver of economic development,” said Carlos Rivera-Vélez, president of the Puerto Rico Manufacturers Association.
The bill also proposes setting additional charges for power generation through renewable energy and limiting and delaying compliance with established implementation goals by allowing the imposition of an additional charge for distributed power generation.
It also proposes revising the net metering processes to reimburse the customer for an equivalent of the marginal cost of the power produced and not the actual cost, and significantly limiting the progressive introduction of the renewable energy portfolio, delaying the goal of it accounting for 20 percent of power generation by 2035.
“We should aspire to have 50 percent of renewable energy in use by 2025, in all of its variations: centralized, distributed, and hydroelectric, among others,” said Rubén Piñero, president of the United Retailers Association.
The measure also sets forth creating the PREPA Revitalization Corporation as a vehicle to perpetuate debt to achieve project financing “without controls and without limits,” setting as priority the payment of the debt and not PREPA’s efficient and competitive operation, the group said.
“The Corporation must have audited financial statements that distribute the value of PREPA’s debt for each of its segments,” said Ángel Figueroa-Jaramillo, president of PREPA’s Electric Industry Workers Union, known as UTIER.
Finally, the group claimed the measures contained in the draft bill limit “the right of access to fundamental energy needed for the integral development of Puerto Rico residents and the island.”
“Certainly, in the midst of such important processes as the evaluation of the Integrated Resource Plan submitted by PREPA to the Energy Commission, PREPA intends to dismantle the existing legal framework, which has as principle to establish a regulatory body with a board composed of three independently advised citizens to exercise the most modern of energy regulation processes and ensure transparency, to achieve greater efficiency and effectiveness of our electricity system,” said Josen Rossi, chairman of the Puerto Rico Institute of Competitiveness and Sustainability.
“We shouldn’t change this legal framework and much less in the middle of the regulatory process being carried out at present, in which PREPA owes a lot of information and has yet to deliver financial statements, as Jaramillo noted,” said Rossi.
Lawmakers are slated to begin scrutinizing the bills defining the PREPA Revitalization Act today. Meanwhile, the Subcommittee on Energy and Mineral Resources of the U.S. House Natural Resources Committee, will hold a hearing on Tuesday entitled “Exploring energy challenges and opportunities facing Puerto Rico,” to explore the steps that should be taken, at both the local and federal level, to lower the cost of electricity on the island.
“It is clear that, to achieve this goal, Puerto Rico must reduce its reliance on oil and increase its use of natural gas [ideally sourced from the United States, which has become the world’s leading producer of natural gas] and generate more electricity from solar, wind and other renewable sources,” Resident Commissioner Pedro Pierluisi said.
“It is also clear that PREPA must be reformed and its infrastructure — both plants and transmission lines — must be made far more cost-efficient,” said Pierluisi, who will be attending the hearing, but will not be testifying.
That list of witnesses includes: Lisa Donahue, Managing Director, AlixPartners, and chief restricting officer for PREPA; the Puerto Rico Institute of Competitiveness and Sustainability’s Rossi; Jorge San Miguel, chairman of Environmental Law, Energy & Land Use for legal firm Ferraiuoli LLC; Jaime L Sanabria-Hernández, general manager for finance and administration at EcoEléctrica, L.P.; and the PRMA’s Rivera-Vélez.