A clash between Puerto Rico’s governor and legislators will stall rate relief for electric and water customers.
While Gov. Pedro Pierluisi this week called a special legislative session to address a bill he sponsored to provide funds for the Puerto Rico Electric Power Authority and Puerto Rico Aqueduct and Sewer Authority to reduce rates, the legislature refuses to approve the plan until he agrees to their plan to cut PREPA debt by 75%, leave its pensions untouched, and lower electricity rates.
“The refusal of the legislative leadership to give way to this project in the ordinary session caused the Energy Bureau to implement an increase in the electricity bill because of the rise in the cost of fuel,” Pierluisi said. “However, the regulatory entity could reconsider that decision if we can provide the funds that the Electric Power Authority needs to meet those fuel costs.”
The governor’s bill would allocate $205 million to PREPA and $20 million to PRASA from the State Insurance Fund Corp. to temporarily prevent electricity and water rate increases.
Popular Democratic Party legislators or at least their leaders, who hold top positions in the House and Senate, say they will not vote in favor of the governor’s bill unless he agrees to approve their bill on the Puerto Rico Electric Power Authority, according to multiple sources. The President of the Puerto Rico House of Representatives, Rafael Hernández Montañez, proposed a bill to cut the Puerto Rico Electric Power Authority’s debt by 75%, leave its pensions untouched, and lower electricity rates.
“The door is open. … We are ready to sit down and look for alternatives,” Hernández Montañez said Wednesday, indicating his willingness to meet with Pierluisi. “We don’t want another patch. We want to solve the problem permanently.”
On Wednesday Pierluisi’s spokesperson said “there’s nothing to negotiate and all legislators have to vote in favor or against the people.”
According to the governor, House of Representatives New Progressive Party Minority Leader Carlos Méndez Núñez and Senate NPP Minority Leader Thomas Rivera Schatz support his bill.
On Wednesday, Hernández Montañez recessed the special legislative session until July 25. On Thursday the governor insisted there would be no negotiations, just an up or down vote on his proposals.
The Oversight Board would review any of these measures if the local government were to approve them. As the board is currently negotiating PREPA’s debt restructuring with its bondholders, pensioners, and other creditors, it is unlikely it would approve the PREPA debt cut bill.