Chair Grijalva: Judge Should Reject New Puerto Rico Debt Deal – Ratepayers Shouldn’t Be Locked Into Years of Increases for Hedge Funds’ Benefit
Washington, D.C. – Chair Raúl M. Grijalva (D-Ariz) released the following statement on the recently announced deal to restructure more than $8 billion in legacy debt of the Puerto Rico Electric Power Authority (PREPA).
“This deal will sentence ratepayers to decades of unsustainable debt payments and prevent them reaching their goals of more renewable and affordable energy. It’s a win for hedge funds and another loss for the people of Puerto Rico. Judge Swain should reject it.”
The Institute for Energy Economics and Financial Analysis (IEEFA) estimates that under the terms of the deal, the residents of Puerto Rico will pay more than $23 billion in additional rates over the next 48 years above current levels, plus hundreds of millions of dollars to cover administrative expenses.
The government of Puerto Rico and the Financial Oversight and Management Board have recognized that Puerto Rico’s future economic growth and vitality depend on affordable and reliable power. The two major guiding policies for Puerto Rican energy planning – the 2018 Fiscal Plan certified by the oversight board and the Puerto Rico Energy Public Policy Act of 2019, signed into law by Gov. Ricardo Rosselló on April 11 – seek to provide low-cost, clean, and resilient power at a rate below 20 cents/kWh. However, under the recently agreed-upon debt plan, charges would increase the rate to 24.8 cents/kWh starting in July 2020. The deal would ensure that the first priority use of every rate dollar that comes into PREPA goes towards paying off the debt rather than improving the Puerto Rican power system or otherwise improving quality of life on the island.
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