Dive Brief:

• The Puerto Rico Energy Commission has filed a lawsuit against the island's Financial Oversight and Management Board (FOMB), claiming the board is attempting to usurp control of the island's energy future. 
• The commission asserts that it has authority over PREPA, and that the FOMB cannot authorize any utility action until the commission has approved it first.
• The lawsuit also names the island's utility, Puerto Rico Electric Power Authority (PREPA), saying it submitted a fiscal plan to the FOMB covering subjects and actions that  lie within the commission’s jurisdiction. Last year, a federal judge denied a request by the FOMB to install leadership at PREPA, but the regulators' lawsuit says the FOMB continues to overstep its authority.

Dive Insight:

PREPA and its regulators won a significant victory last year when a judge ruled against federal oversight at the troubled utility. But the Puerto Rico Energy Commission, in a lawsuit filed Sunday, told a district court that the FOMB failed to get the message.

Even after the November 2017 ruling against federal oversight of the utility, the commission said the "FOMB still acts as if it has powers to direct not only PREPA’s current activities but also the substantive transformation of Puerto Rico's electric industry."

The energy commission wants the court to rule that FOMB "has no power to mandate or authorize substantive electricity actions the Commission has not authorized."

In February, the FOMB asked Puerto Rico 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 FOMB said in a letter to Rossello that the plan must address PREPA and "needs to provide a five-year plan for a financially sustainable utility."

PREPA is $9 billion in debt, and privatization is being considered as a solution. But the board specified that developing a sustainable plan for PREPA was a "baseline," regardless of privatization. 

It has been almost six months since Hurricane Maria devastated Puerto Rico's grid. The financial issues predate the storm, but Maria has forced the island to rebuild and potentially reinvent its electric grid. Last month, PREPA's governing board formally adopted a plan to transform the power company into what it calls a "reliable, sustainable, customer-focused" utility for the island.