Dive Brief:
- The financial oversight board for Puerto Rico has asked Gov. Ricardo Rosselló to make several changes to the island's fiscal plan for recovery in the wake of Hurricane Maria, including addressing its embattled utility and the rates it charges customers.
- The board in a letter to Rosselló said that the plan must address the Puerto Rico Electric Power Authority and "needs to provide a five-year plan for a financially sustainable utility." The utility is $9 billion in debt, and privatization is being considered. But the board specified that developing a sustainable plan for PREPA was a "baseline," regardless of privatization.
- The bankrupt utility is facing an immediate revenue shortfall and has asked for a $1.3 billion loan. Bond Buyer reports several parties have opposed that request in the bankruptcy court overseeing the utility's proceeding, but the oversight board had voiced its support. The board set a Feb. 12 deadline for Puerto Rico to submit a revised plan.
Dive Insight:
As Puerto Rico attempts to chart a new course as it recovers from a devastating hurricane, the island's federal oversight board said its plan must address its embattled public utility.
The board wants to see a proposal to develop a new integrated resource plan for the island, which should include a goal of decreasing fuel and purchased power costs by at least $0.05/kWh.
"Generation should be a significant near-term focus as it presents the largest opportunity for cost savings and for immediate investment by third parties, and represents the largest shift from the prior IRP due to changes in demand outlook and technology pricing," the board said.
The board said operational initiatives are expected to produce savings of at least $0.015/kWh.
About 30% of Puerto Rico customers are still without power, according to the latest update from the Department of Energy, and is operating at 80% of capacity.
Power ⚡restoration update:
— Energy Department (@ENERGY) February 7, 2018
????????Puerto Rico: 80.3% of normal peak load and 71.5% of customers have been restored.
????????USVI: 99% of eligible customers and 93% of total customers had been restored.
????Read the full situation report ➡ https://t.co/RYXQVstmbY pic.twitter.com/xVVYwBlJt2
According to Yahoo News, PREPA could receive roughly $2 billion in federal funding to repair the storm damage as part of the larger budget deal from Congress. But the utility's woes were already in place before Hurricane Maria.
Aging infrastructure and poor management compounded its issues, and now Island and federal officials are searching for ways to rebuild a more "resilient" grid using new technology. Just a week ago, PREPA announced a new grid modernization plan amid its push to privatize the utility.
