{"id":9242,"date":"2025-02-12T09:36:35","date_gmt":"2025-02-12T14:36:35","guid":{"rendered":"https:\/\/latinamericasecurityreport.com\/?p=9242"},"modified":"2025-02-12T09:36:35","modified_gmt":"2025-02-12T14:36:35","slug":"board-rejects-rate-increase-to-help-restructure-debt-of-puerto-rico-power-company","status":"publish","type":"post","link":"https:\/\/latinamericasecurityreport.com\/?p=9242","title":{"rendered":"Board Rejects Rate Increase to Help Restructure Debt of Puerto Rico Power Company"},"content":{"rendered":"
The Puerto Rican flag flies in front of the Capitol building in San Juan, Puerto Rico, July 29, 2015. (AP Photo\/Ricardo Arduengo, File)<\/figcaption><\/figure>\n

The executive director of a federal control board that oversees Puerto Rico\u2019s finances said that it is \u201cimpossible\u201d for the U.S. territory to pay the $8.5 billion bondholders are demanding in a bankruptcy case involving the island\u2019s power company.<\/a><\/span><\/p>\n

Robert Mujica Jr. unveiled a new fiscal plan for Puerto Rico\u2019s Electric Power Authority on Tuesday, stating that the government can pay creditors $2.6 billion. The plan, requested by a federal judge overseeing the case, does not call for any rate increases to help pay off the company\u2019s debt of more than $9 billion and the projected expenses are higher than those in the previous fiscal plan.<\/p>\n

The board remains in contentious mediation with creditors as it tries to restructure the only outstanding debt that remains since Puerto Rico declared in 2015 that it could not afford to pay its more than $70 billion public debt load and then filed for the biggest U.S. municipal bankruptcy<\/a><\/span> in history two years later.<\/p>\n

\u201cIt\u2019s gone on for too long,\u201d Mujica said of the case. \u201cIt\u2019s important for us to get out of this one.\u201d<\/p>\n

Economists have said that the unresolved case has spooked potential investors and hampered economic development on the island.<\/p>\n

Mujica noted that officials don\u2019t yet know where they would obtain funding for the $2.6 billion they\u2019re offering, but warned it shouldn\u2019t come from an increase in electric rates given already high power bills and the fragile state of Puerto Rico\u2019s grid<\/a><\/span>.<\/p>\n

\u201cThe system needs investment,\u201d Mujica said, adding that all revenue should go into fortifying and improving the grid. \u201cPuerto Ricans deserve to have a utility that is performing and that is reliable.\u201d<\/p>\n

The island suffers from chronic power outages that worsened after Hurricane Maria<\/a><\/span> razed the grid when it slammed into Puerto Rico as a Category 4 storm in September 2017. However, the grid was already crumbling given a lack of maintenance and investment for decades.<\/p>\n

Mujica said that if the government agreed to bondholder demands, which total $12 billion including interest, it would mean an electric rate increase of up to eight cents that he says Puerto Ricans cannot afford.<\/p>\n

The current offering of $2.6 billion, which represents an 80% reduction of the power company\u2019s debt, has been accepted by 44% of creditors and a third of all bondholders.<\/p>\n

Luma Energy, which oversees the transmission and distribution of power in Puerto Rico, says the grid needs up to $25 billion in federal funding through fiscal year 2034 to fully rebuild and maintain the system.<\/p>\n

Of the $17 billion expected in funding from the U.S. Federal Emergency Management Agency, only $3.2 billion has been disbursed, Mujica said.<\/p>\n

\u201cThe system right now is deteriorating faster than the investments are being made,\u201d he said.<\/p>\n

– D\u00e1nica Coto, AP News<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The executive director of a federal control board that oversees Puerto Rico\u2019s finances said that it is \u201cimpossible\u201d for the U.S. territory to pay the $8.5 billion bondholders are demanding in a bankruptcy case involving the island\u2019s power company. Robert Mujica Jr. unveiled a new fiscal plan for Puerto Rico\u2019s Electric Power Authority on Tuesday, stating…<\/p>\n","protected":false},"author":124,"featured_media":9243,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"fifu_image_url":"https:\/\/dims.apnews.com\/dims4\/default\/a7bcf09\/2147483647\/strip\/true\/crop\/5616x3739+0+2\/resize\/820x546!\/format\/webp\/quality\/90\/?url=https%3A%2F%2Fassets.apnews.com%2F65%2Ffb%2F55779a63fe9311f4158eeb324fa1%2Ffe7441c93c1c489eb2af97d8dccff32c","fifu_image_alt":"","footnotes":""},"categories":[189],"tags":[],"class_list":["post-9242","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-borders-commerce"],"_links":{"self":[{"href":"https:\/\/latinamericasecurityreport.com\/index.php?rest_route=\/wp\/v2\/posts\/9242","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/latinamericasecurityreport.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/latinamericasecurityreport.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/latinamericasecurityreport.com\/index.php?rest_route=\/wp\/v2\/users\/124"}],"replies":[{"embeddable":true,"href":"https:\/\/latinamericasecurityreport.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9242"}],"version-history":[{"count":1,"href":"https:\/\/latinamericasecurityreport.com\/index.php?rest_route=\/wp\/v2\/posts\/9242\/revisions"}],"predecessor-version":[{"id":9244,"href":"https:\/\/latinamericasecurityreport.com\/index.php?rest_route=\/wp\/v2\/posts\/9242\/revisions\/9244"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/latinamericasecurityreport.com\/index.php?rest_route=\/wp\/v2\/media\/9243"}],"wp:attachment":[{"href":"https:\/\/latinamericasecurityreport.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9242"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/latinamericasecurityreport.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9242"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/latinamericasecurityreport.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9242"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}