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PREPA to ‘ramp down’ generation units starting Sunday

PREPA to implement emergency plans to conserve resources. (Credit: © Mauricio Pascual)

Judge Laura Taylor Swain of New York ruled against the Puerto Rico Electric Power Authority’s request for a loan from Puerto Rico’s central government to support its operations as it continues the restoration of power to Puerto Rico.

This decision, which has a negative impact on the relief efforts and the operation of PREPA, followed vigorous arguments against the loan by creditors, agency officials said.

Starting Feb. 18, PREPA will begin a ramp down of select generation units.

“While we expect to proceed in an orderly and staged manner to conserve operational reserves, we fear this setback will result in the exacerbation of human hardship as potable water, power for medical procedures, communications, and open schools are at risk of disappearing again. This could also accelerate the outmigration of residents,” said PREPA Board Chair Ernesto Sgroi.

“We are deeply disappointed with the decision to deny this loan requested by the Financial Oversight and Management Board and the Puerto Rico Fiscal Agency and Financial Advisory Authority on behalf of PREPA,” he added.

“This is a setback for citizens of Puerto Rico, thousands of whom remain without power. Last night’s ruling, favoring creditors and bondholders, is counterproductive to the transformation of PREPA and the future of Puerto Rico,” he said.

“While we expect to qualify for a $300 million bridge loan from Puerto Rico Treasury in the coming weeks, until then we will have to put forth a strategic operational emergency plan that conserves resources and limits client impacts, while preserving our ability to operate our long-term recovery plan,” he said.

“These initial emergency efforts are not expected to interrupt existing electric service but may have an impact on the stability of the grid. PREPA will continue with the restoration work within the constraints presented to it,” Sgroi said.

“However, without the loan, and given the potential risk to its operations, we have no other responsible option than to begin implementing a limited operational emergency plan,” he added.

The damage to the people of Puerto Rico has been exacerbated by lack of prompt action by the U.S. Treasury and FEMA to expedite access to the Congressionally approved $4.9 billion of community disaster loans. We urge them to move forward as soon as possible to help our recovery efforts, Sgroi said

“PREPA is committed to its Vision for the Energy Future of Puerto Rico and to continuing negotiations to reach agreements with our creditors, but we expected that the court proceedings would accelerate the process. We continue to do everything we can to prioritize the safety and well-being of our citizens — U.S. citizens  — who now more than ever need support from their government,” he concluded.

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This story was written by our staff based on a press release.

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