A number of prominent private-sector leaders expressed their support Tuesday of Senate Bill 837, which proposes to create the Puerto Rico Energy Regulatory and Oversight Commission to, among other things, begin reeling in local electricity costs.
During the first round of public hearings chaired by Senate President Eduardo Bhatia, who has been pushing for energy reform that includes probing the internal procedures at the Puerto Rico Electric Power Authority, testimony was heard from economic, industrial and energy leaders.
During his turn, Sergio Marxuach, director of public policy for the Center for a New Economy, endorsed the proposal to establish a Regulatory Commission under the believe that one of PREPA’s basic problems is that its Governing Board, in addition to overseeing the corporation, also regulates Puerto Rico’s electricity market.
“PREPA requires that an external entity imposes discipline and controls the predatory behavior of the corporation’s internal and external interest groups benefiting from the current situation,” Marxuach said.
Citing economist Albert Hirschman, Marxuach said PREPA meets the definition of what is recognized as a “lazy monopoly.”
“PREPA constitutes a lazy monopoly, as Hirschman says, it uses its power to exploit consumers and maximize its profit,” he said.
Marxuach was emphatic in saying that it is false that a regulator would lead to a downgrade of PREPA’s bonds.
“The truth is that PREPA is already on the verge of a downgrade and has juggled to comply with bondholders,” Marxuach added.
During the hearing, Bhatia explained that the proposed Regulatory Commission would oversee everything that has to do with stabilizing and eliminating the fuel adjustment charge that for years has bloated consumer energy bills.
The Senate leader and author of the measure said this and another nine bills included in the Energy Relief Plan package, seek to “rescue PREPA.”
“The Authority was created by the Legislature and will have to be rescued and regulated by the Legislature,” said Bhatia.Sergio Marxuach
Meanwhile, Puerto Rico Manufacturers Association President Waleska Rivera also expressed her support of the bill, saying that the trade group’s mission is to “reduce energy costs, and see the result in our bills.”
During her testimony, Rivera also urged lawmakers to also promote bills that improve the island’s general economy.
“If PREPA can not be efficient, we have to take measures as an island. The Authority has to be as efficient as we are in the private sector to sell the best product at the best price,” she said.
For his part, José Acarón, of the Puerto Rico chapter of the American Association of Retired Persons, said citizens are urgently requiring a reduction in their energy bills, and a “fair and reasonable bill.”
All deponents emphasized the importance of reducing energy costs to improve Puerto Rico’s economic conditions and described cases of businesses at all levels who are hindered in their development because of high electricity bills.
Julián Herencia, executive director of the Association of Renewable Energy Producers, known as APER, as well as María Judith Oquendo, of the Puerto Rico Energy Cluster, also threw their support behind the measure.
“APER supports the creation of a Regulatory Board that approves the rates and conditions under which energy is produced, distributed and sold,” Herencia said.
During the legislative exchange, a proposal was submitted to hold a town hall meeting of sorts to discuss energy reform.
“If necessary, we will do it. There is nothing being done hastily here, what we want is that all interested groups are able to contribute. The island is asking for a serious energy plan and we are moving toward that,” said Bhatia.