Dive Brief:
- The Puerto Rico Electric Power Authority needs more than $1 billion to continue operating as the utility faces a revenue shortfall because it is unable to bill even half of its costumers, according to the Canadian Press.
- The news outlet reports the federal board overseeing PREPA's operations has asked a judge to authorize a $1.3 billion loan. A revenue shortfall of up to $1.2 billion is feared in the next six months.
- Puerto Rico Gov. Ricardo Rosselló has unveiled plans to privatize the embattled utility, but the idea has sparked some concern. According to the Canadian Press, government officials were working to tamp down a rumor that the Puerto Rico Energy Commission (PREC) was being eliminated.
Dive Insight:
There may be oversight changes in the works, but government officials in Puerto Rico say PREC is not being eliminated — only merged with two other agencies. As part of a plan to consolidated government and save money, the Telecommunications Regulatory Board and the Public Service Commission will be merged with PREC into a single agency.
PREC President Jose Roman had raised concern of sufficiency utility oversight. Even privatized, "the company still represents a challenge," he reportedly said.
It has been four months after Hurricane Maria devastated the island's infrastructure and up to a million Puerto Ricans are still without power. About 81% of the island's generation is back online but only about 70% of customers have power. The slow recovery is one reason the utility may be privatized, but its longstanding financial issues is another.
Rosselló announced the privatization plan last week and said it could take up to 18 months. The process would begin with a legislative proposal, followed by a review of acquisition offers.
The utility is $9 billion in debt and working though a bankruptcy proceeding overseen by a federal judge in New York. That court would have to agree to any sale, but had rejected a request in November from PREPA's federal oversight board — set up by Congress to guide its restructuring — to appoint an outside director for the utility.
