Chair Grijalva Leads Amicus Brief With Reps. Velázquez and Soto Opposing PREPA Debt Restructuring Agreement
Washington D.C. – Natural Resources Committee Chair Raúl M. Grijalva (D-Ariz.) today filed an amicus brief in the U.S. District Court of Puerto Rico expressing opposition to the Puerto Rico Electric Power Authority (PREPA) Restructuring Support Agreement (RSA). Grijalva’s brief was signed by Small Business Committee Chair Nydia Velázquez (D-N.Y.) and Rep. Darren Soto (D-Fla.), both members of the Natural Resources CommitAlextee.
Grijalva, Velázquez and Soto have helped lead oversight of PREPA’s debt restructuring since the beginning of the 116th Congress. Earlier this year the three lawmakers co-led a letter to the Puerto Rico Legislative Assembly urging RSA opposition. Grijalva and Velázquez wrote an op-edin July arguing that the PREPA RSA in its current form would put most of the burden on working people and negatively impact economic development in Puerto Rico.
“We should support quality of life and economic prosperity in Puerto Rico, and the current PREPA restructuring agreement supports neither,” said Chair Grijalva. “The people of Puerto Rico have suffered enough from hurricane damage, from austerity, and from the cruelty of the Trump administration. We’ve seen too many attempts to treat millions of U.S. citizens as a bondholder piggy bank rather than a community in need of assistance. I stand with those who prefer a sustainable economic future to more court battles and deepening poverty.”
“The PREPA Restructuring Support Agreement would impose unbearable rate hikes on consumers and businesses alike, further undercutting Puerto Rico’s economy and fueling additional outmigration from the Island,” said Chair Velázquez. “Moreover, this agreement shortsightedly fails to invest in a more resilient and environmentally sustainable electric grid. PREPA bondholders should not be paid off by punishing the people of Puerto Rico who’ve already suffered enormously. I’ve previously raised these concerns with the Board, repeatedly. Now, the Court should reject this agreement, so an alternative plan that prioritizes Puerto Rico’s environmental and economic future can be developed.”
“After everything the Puerto Rican people have suffered, we can all agree that they deserve nothing short of reliable, affordable power,” said Rep. Soto. “Unfortunately, the PREPA Restructuring Support Agreement falls short of its goals and inhibits local initiatives to go green by 2050. With that, we owe it to our Puerto Rican brothers and sisters to ensure a prosperous and efficient future.”
In May of this year, PREPA reached a new RSA with creditors to allow for the restructuring of more than $8 billion of legacy debt. In the amicusbrief, the lawmakers argue that when setting the terms of the RSA, the Oversight Board – as the representative of PREPA, several of PREPA’s bondholders, and the Puerto Rico Fiscal Agency and Financial Advisory Authority – did not consider Puerto Rico’s declining economy, its decrease in population, and the high percentage of people that live under the poverty line and cannot afford a high cost of living.
PREPA is the main provider of power to Puerto Rico, and the RSA will worsen Puerto Rico’s financial crisis. If approved, the RSA will provoke a decrease in demand for electricity, which will result in revenue loss for PREPA and the agency’s eventual dismantling.
Grijalva, Velázquez and Soto visited Puerto Rico in March as part of their #ListenToPuertoRico tour, where they spoke directly with community members. The lawmakers gathered information on failed federal recovery efforts in the wake of Hurricane Maria and on the ongoing economic and social impacts of fiscal austerity, which helped to inform today’s brief.
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