'Puerto Ricans Deserve Affordable Electricity': Teresa Leger Fernández Slams High Costs In PR

Forbes Breaking News

During a House Natural Resources Committee hearing before the Congressional recess, Rep. Teresa Leger Fernández (D-NM) spoke about power costs and infrastructure in Puerto Rico.

Transcript

00:00This is the ranking minority member for any statement. Ms. Ledger-Fernandez.

00:04Thank you very much, Mr. Chairman, and thank you to our colleagues who have joined us today

00:10because of your intimate knowledge of what is happening on the island. We really welcome

00:15your participation. This is an important hearing to examine the effectiveness of PROMESA,

00:22which you adequately described, and it has been nine years since PROMESA's enactment,

00:28and the verdict has been mixed. The law aimed to provide Puerto Rico with a path forward to

00:36manage and resolve its over $70 billion of public sector debt has indeed helped reduce Puerto Rico's

00:44debt by more than $40 billion and saved the island over $50 billion in principal and interest payments.

00:50The law also included many compromises that reduced its effectiveness, resulted in unnecessary delays,

00:58and increased execution costs. Congressional Democrats, who opposed the imposition of the

01:04oversight board initially, supported the bill in the end because it provided the only mechanism

01:09for Puerto Rico to structure the over $70 billion of unpayable public bond debt, the largest in U.S.

01:17history. But we must recognize that the people of Puerto Rico continue to face economic hardship

01:22with the island's poverty rate at 40 percent. That's more than triple the national poverty rate. On top of

01:28that, Puerto Rican residential electricity rates are over 26 cents higher per kilowatt hour than the national average,

01:4060 percent higher than the national average. While Puerto Ricans pay these extreme rates, they also experience

01:46regular blackouts as the utility's aging infrastructure desperately needs new investment.

01:53That's why we need to fight to complete the final debt restructuring under PROMESA for the Puerto

02:00Rico Electric Power Authority, or PREPA. At the time of PROMESA's enactment, PREPA had accumulated $9 billion in debt,

02:08but its bondholders aggressively oppose the utility filing for bankruptcy. Despite the urgent need to

02:16restore PREPA's electric system and stop the blackouts, the utility's bondholders are urging the

02:22oversight board to prioritize paying them $3.7 billion in cash on top of the $8.5 billion they are claiming they are owed.

02:31This would likely require painful payment structures like tapping into Puerto Rican central government funds,

02:39raising electric rates on customers who we've already discussed pay some of the highest in the country,

02:45or diverting funds for urgent repairs to the energy system. Puerto Ricans deserve affordable electricity

02:53and a reliable electric system. They deserve an economy that works for them. Natural Resources Committee

03:01Democrats have consistently called for dissolving the oversight board, but only after all of Puerto

03:07Rico's bankruptcies are completed under PROMESA. Full payment of PREPA's bond debt plus interest is simply

03:15factually unaffordable. It is not consistent with, as what the chair called, a bankruptcy light situation.

03:23Where fairness to both the bondholders but also to the people of Puerto Rico is very important.

03:30All parties should come together and consensually resolve PREPA's bankruptcy so that the people of

03:35Puerto Rico can have an electric utility that at a minimum can provide sustainable and reliable energy

03:41to support Puerto Rico's economic growth and fiscal stability. I want to welcome our witnesses and I

03:47look forward to receiving your testimony.

Category

Transcript

Be the first to comment

Recommended