New York – The Alliance of Active and Retired Employees of the Electric Power Authority (PREPA) and several community organizations announced yesterday the installation of a day camp outside the United States District Court for the District of Puerto Rico starting on March 4 in opposition to the confirmation of PREPA’s Debt Adjustment Plan that would imply increases in the electricity bill for Puerto Ricans for decades.
Next week, Judge of the Southern District of New York, Laura Taylor Swain, will lead the hearings on the island related to the Authority’s bankruptcy case almost seven years after the process began under Title III of the PROMESA Law.
The Fiscal Control Board, created under the law approved in the United States Congress, is the entity that will present the plan to the judge so that she can decide whether to confirm it or not.
The hearings will last until March 19.
In a press conference, the coalition reported that the presence at the camp of current and former employees of the Authority, some moved to other government agencies following the privatization of the corporation and the arrival of Luma Energy, will extend from 9 a.m. to 4 p.m. , except on Wednesdays, when the day will end at 6 pm
“This coming March 4 we will begin the work of the camp against the Debt Adjustment Plan. We are going to be installed there for all the days of the hearings that will end on March 19,” announced Johnny Rodríguez Ortiz, president of the Association of Retirees of the Electric Power Authority (AJAEE).
They ask that the fourth version of the PAD not be approved
Rodríguez Ortiz argued that they will insist on their claim that the PAD not be approved.
“We are going to be making an appearance against the approval of this Debt Adjustment Plan for many reasons. First of all, this Fiscal Control Board intends to invalidate the power of the Energy Bureau…And it will not be the first time that the Board invalidates existing laws because they have already done so in the past, both they have issued warnings to the Government in Fortaleza and to the Legislature,” he said.
The spokesperson stated that, given that there are no funds in the Authority to comply with the payment to the bonitos, the economic burden should not be passed on to the Puerto Ricans through the electricity bill.
“They are trying to impose a payment plan on us that will probably last 35 years or more; there is no definition; there is no certainty. We also do not know the interest payment of those new bonds that will be issued to pay this debt. And you know that it is known that every day the Authority receives less income due to several factors,” said Rodríguez Ortiz while highlighting that the continuous transition of homes to renewable energy systems implies less money in the corporation’s coffers.
The unionist also questioned the “timid” position of the Pierluisi Administration regarding the possible confirmation of the plan.
“The current Government presented a timid measure in opposition to the Debt Adjustment Plan. After expressing that they would be opposed to the confirmation of a PAD, they also report that if it is approved, they would do everything possible to put it into effect. Either it is white or it is black; they made it gray opportunistically,” he considered.
In the opinion of the union leader, the Board is privileging bondholders in contrast to the provisions of the 1974 Trust Agreement under which the current PREPA bonds were issued. The unions allege that the Authority must first comply with operational and maintenance expenses, as well as with the PREPA Employee Retirement System before paying the bondholders.
“The closure of industries and businesses in this country is an epidemic. How is it possible that we are going to commit to paying a debt where we will have less and less income and we do not even know the interest we are going to pay… the Authority’s income will continue to be greatly reduced. It is impossible to pay that debt, and even worse is the fact that there is no way, because there is no way, to pay it. But it is even worse to try to pay someone who has no right to collect, because those vulture bondholders who bought those bonds for up to 10 cents on the dollar, bought them with the original sales contract,” added the spokesperson, who added that some 800 opponents of the plan have been filed in federal court.
For his part, Josué Mitjá González, president of the Union of Electrical and Irrigation Industry Workers (UTIER), warned of the economic knock-on effect of applying the plan.
“As a result of this, we will have a significant increase in the cost and quality of life in Puerto Rico. “We are all going to be affected,” she indicated.
“This will have a chain effect that will cause new bankruptcies, the closure of businesses and industries, layoffs of employees, affecting all essential services in our country.
In this regard, data from a study released by the United Retail Center (CUD) last June showed that, if the plan comes into effect as expected, 20% of SMEs could close, in addition to thousands of jobs being lost. in a period of two years.
The CUD represents more than 5,000 owners of small and medium-sized businesses (SMEs) on the island.
What does the fourth version of the PREPA Debt Adjustment Plan provide?
The most questioned thing about the most recent draft of the PAD – the fourth – which will be evaluated starting next week is that it proposes increases in the bill for PREPA subscribers for three decades that include a legacy charge that in turn is divided into three rates.
One corresponds to the monthly fixed charge, which will start at $1 for residences, and will reach $112.50 in the case of large companies and industries. To the above, two consumption charges are added.
One, it will fluctuate between 0.74 cents and almost three cents for the first 425 kilowatt hours (kvh) of consumption; and the second would start at 1.49 cents and could reach almost three cents kvh due to excess consumption of 425 kvh.
The future pensions of Authority employees are not assured.
As part of the lawsuits related to the Authority’s bankruptcy case, Utier and the Union of Independent Professional Employees (UEPI) are involved in a controversy with the Board following the organization’s request to annul the collective agreements.
The Board argues that PREPA cannot comply with the provisions of the contracts with the unions because there are no funds available, since the PREPA Employee Retirement System fund is insolvent. The federal entity has also indicated that assuming the agreements would be incompatible with the pension reform measures.
For their part, the unions have alleged that the Board did not act in good faith in terms of the Retirement System and that the organization was the one that bankrupted the System.
35 witnesses and more than 300 pieces of evidence
This Tuesday, the judge led a conference in advance of the hearings in which details of the processes were finalized, which will include some 35 witnesses and more than 300 pieces of evidence.
The Board has maintained that the plan is a “significant victory” for Puerto Rico, as it reduces PREPA’s debt by 80%, and provides a “realistic path” to ending PREPA’s bankruptcy.
“On Monday the hearings will begin and the #JSAF will present its arguments for the court to confirm the plan,” the entity indicated in one of several messages shared yesterday on the social network X.
The agency recognized, however, that without a functioning electrical system there will be no economic growth. “The transformation has advanced substantially, and the debt restructuring of
@AEEONLINE will be another essential element of this ongoing transformation,” they argued from the entity.
The federal agency’s responses were given within the framework of virtual public meeting 43 in which Puerto Ricans could send questions or comments about the decisions and actions of the Board.
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