Plan to save Puerto Rico electric utility called bad for economy

Puerto Rico Economy

SAN JUAN, Puerto Rico (AP) — Business, labor and consumer representatives on Sunday called for lawmakers to reject a bill to reform Puerto Rico's troubled electric utility that creditors are requiring as part of an agreement to restructure its $9 billion debt.

They said the proposal would deal a blow to consumers and the economy by giving too much power to the Puerto Rico Electric Power Authority to hike rates and establish other charges while limiting the role of the newly created Puerto Rico Energy Commission regulatory board.

The bill also delays implementation of renewable energy targets and would enable the financially troubled government utility to continue borrowing because a new direct charge to clients would cover its debt payments.

"The Commission as an independent regulatory entity should have complete powers over the evaluation and approval of proposed hikes and is the cornerstone of the change we should initiate in our electricity system as a main driver of economic development," Puerto Rico Manufacturers Association President Carlos Rivera Velez said.

"We all have a right to energy with transparent costs that have been legitimately approved by an independent entity. Approving this bill will limit the participation of consumers," added the Rev. Felipe Lozada Montanez, a Lutheran bishop and coordinator of the Energy Roundtable coalition.

The group spoke Sunday as lawmakers return to work this week after a holiday recess. They face a Jan. 22 deadline to approve legislation acceptable to creditors.

PREPA, the largest U.S. public power utility, announced last month it reached a deal with 70 percent of those who hold the agency's debt. Creditors will take a 15 percent loss to forgive $600 million in debt and agreed to a five-year delay for more than $700 million in debt payments.

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