Dive Brief
- A senior Department of Energy (DOE) official called for changes to the governing structure of Puerto Rico's bankrupt public utility on Wednesday, including removing the governor's authority to appoint board members for the company and commissioners to its regulator, the Puerto Rico Energy Commission.
- The federal government should not assume control of PREPA, DOE Assistant Secretary Bruce Walker told a House Natural Resources Committee hearing, but it and the Puerto Rican government should "have a backbone" and pull the board and regulatory appointments away from Gov. Ricardo Rosselló — who backed out of a scheduled appearance at the hearing.
- Committee Chairman Rob Bishop, R-Utah, said lawmakers are not currently planning to federalize the public utility, but declined to take any options off the table for altering its oversight. DOE is advising the Puerto Rican government on potential privatization plans for PREPA, but Walker said he does not believe overseeing the utility should be his agency's role.
Dive Insight
The ongoing struggle over control of PREPA came to the House Natural Resources Committee on Wednesday, where Bishop sought to quell persistent rumors that Congress is preparing to take over, or federalize, the island's public utility.
"I'm not talking about federalizing anything. I'm not talking about selling assets to the highest bidder. I'm not talking about making Puerto Rico a fossil fuel island," Bishop said at the start of the hearing.
Bishop's comments followed a letter from Rosselló saying that it would be "unnecessary and inappropriate" for Congress to give DOE control of PREPA, which is $9 billion in debt and still has customers without power after Hurricane Maria devastated its grid last year.
The hearing coincided with news from Bloomberg that Congress is considering giving the federal government more oversight of the public utility, and Bishop said after the hearing he is open to any options that could "depoliticize" the troubled public company.
"Nothing is on or off the table," he told reporters. "This [hearing] is exposing a bunch of issues and it gives us an opportunity to begin looking for what those solutions will be, and there is no limitation on what those solutions will be."
One of those solutions should not be to put the Department of Energy in charge of PREPA, Walker told the committee. But, he said, "there are things we can do to solve this problem without federalizing."
"Let's have a backbone and pull the board appointments away from the governor," Walker said. "Let's take all the commissioners from [the Puerto Rico Energy Commission] and pull them away from the governor."
"We're dealing with a municipal entity that is politically driven," he said.
Walker's comments came after a series of resignations allowed Rosselló to consolidate influence over PREPA. This month, two of the utility's chief executives and a majority of its board stepped down over salary disputes with the governor, allowing Rosselló to appoint their replacements.
The appointments have given Rosselló the opportunity to "re-politicize" PREPA, said Sen. Eduardo Bhatia, who leads the opposition party in the Puerto Rico Senate. Rosselló was invited to the hearing, but declined after a Twitter spat with Bishop.
Though he opposes the Rosselló appointments, Bhatia also urged the committee not to exert federal control over the utility. The Puerto Rico legislature is working to modernize the territory's energy plan and utility regulations, he said, and DOE and the Federal Energy Regulatory Commission should assist it and the governor in designing a working business model for the utility.
Those changes should come fast, Rep. Don Young, R-Alaska, warned the officials, saying five or ten years is "too damn long" to shift ownership of the utility
"We are going to privatize this unit," said Young. "It has been a failure and the PR people deserve better."
