The Puerto Rico Electric Power Authority’s new rate that goes into effect today for the island’s residential customers is a temporary subsidy that does not imply efficiency improvements at the agency, the Center for the New Economy concluded Wednesday.
Furthermore, its fast-track implementation raises a number of questions that Sergio Marxuach, the CNE’s director of public policy said must be answered by the public corporation that “habitually acts in the darkest of shadows and lacking transparency.”
Late last week, PREPA published an ad announcing the creation of a new temporary rate for residential clients that currently do not receive subsidies on fuel costs, “which is part of the group of initiatives PREPA is developing to reduce the cost of electricity.”
In announcing the temporary rate, the agency said it sought to provide “relief to residential clients who do not receive subsidies.”
The change in the rate consists of amending the formula used to calculate the fuel adjustment charge. The formula will be temporarily restructured to include a “stabilizing factor” to compensate for the increases in oil prices, the ad said.
“We all want to pay less for the electricity we consume. However, a more thorough analysis of the notice issued by PREPA raises a number of important questions,” Marxuach said.
Among other things, the economist questioned how long the temporary rate will be good for, how much money there is available for the subsidy, where the resources are coming from and the criteria PREPA is using to determine how much money it will spend monthly to stabilize the rate and produce savings for consumers.
“Whatever happened to the arguments that it was impossible to change the fuel adjustment charge formula without consulting bondholders?” he further questioned.
While the CNE agreed with giving consumers a relief, the nonprofit think tank also reiterated its previous claims stating the need to create an independent regulatory board to supervise and control PREPA’s operations.