Puerto Rico Gov. Alejandro García-Padilla on Thursday submitted a bill to the legislature that proposes a sweeping overhaul of the Puerto Rico Electric Power Authority, with the goal of “providing clean and reliable energy at the lowest possible cost.”
The 159-page PREPA Revitalization Act proposes: Enhancements to governance processes so that PREPA can implement an independent, non-political, staggered Board structure; Adjustments to practices for hiring and managing personnel; Changes to the public corporation’s processes for collecting outstanding bills from both public and private entities; Implementation of a competitive bidding process for soliciting third party investment in the company’s infrastructure; Refinancing of PREPA’s outstanding $8.3 billion in bond debt through a new securitization that will reduce its indebtedness and cost of borrowing; and a reform of its ability to collect payment from municipalities.
The approval of the bill is necessary to complete restructuring talks with bondholders, which have granted 13 forbearance agreement extensions to the utility during negotiations that have extended for the better part of the past 15 months. The legislature has until Nov. 13 to approve the bill during this session.
“The revitalization is an essential part of the transformation process and enables PREPA to meet its obligations in the short, medium and long term,” the governor’s office said in a statement released along with the bill.
The bill will provide PREPA the ability to invest in public-private partnerships to manage the financing of projects to modernize its infrastructure and security, among other initiatives.
“This bill will facilitate PREPA’s transformation and usher in a new era of efficiency, reliability and safety at PREPA. We need all stakeholders to come together and share the burden of social and economic responsibility,” said PREPA Executive Director Javier Quintana-Méndez.
“With this legislation we can realize the debt relief and savings offered by the creditor compromises and make the changes and investments needed to ensure that PREPA can provide the people and businesses of Puerto Rico with reliable power, stable rates and outstanding customer service for generations to come,” he said.
“Now is the time to act and enable PREPA to move forward with this transformation that represents the foundation for a stronger, more prosperous Puerto Rico,” the executive added.