00:00Five minutes. Ms. Velasquez. Thank you, Mr. Chairman. Dr. Austin, do you recognize that almost
00:06eight years after the hurricanes, Puerto Rico's grid remains fragile with chronic outages driven
00:14by a weak infrastructure and vegetation problems? Well, I'd also add that there were the earthquakes
00:23in 2022. So the earthquakes affected the power generation plants on the southwest coast.
00:30And I think with the hurricanes, you know, when I've talked to my colleagues who are experts
00:36in the technical matters, you know, my impression is that the reconstruction of the grid after
00:42the hurricanes was more of a patching up rather than a full reconstruction. And so I think
00:50that the system is still very delicate. And I think that there are just inherent difficulties
00:57because the south side is more protected. And that's where the power generation is. The
01:03power demand is more on the north side. Thank you. Would you agree that bondholders led by
01:10Golden Tree are counting on repayment from a system that is barely functional? Yes or no?
01:18I think it's not a it's not functioning very well. It's it's expensive. There are lots of blackouts.
01:26There's deep unhappiness about prep up. Thank you. Let me show you what that actually looks like.
01:34This is the system and the customers they want to explore. You see, this is the business model of
01:44vulture funds. Once again, they took advantage of a distressed government to buy cheap debt. And now they
01:53demand the maximum payment. This isn't longer the story of prepa's bankruptcy. It is the story of Golden
02:03Tree versus the people of Puerto Rico. Thank you, Dr. Austin. Mr. Mojica, Golden Tree owns
02:131.3 billion dollars in prepa bonds. To recover their investment, how much do you think do they think
02:23prepa should pay all bondholders? What they have told the regulator who is currently reviewing the
02:31rates in Puerto Rico is that they are they would like the rates to be set high enough to be able to
02:37pay 12 billion dollars, which includes eight and a half billion dollars, plus pre and post petition
02:42interest. And they say they can get it from prepa's net revenues, but they are zero, correct?
02:51We believe there are zero revenues once you maintain the system. So what they're actually advocating is
02:57for rates to go up in order to pay back the debt. So that means that the only way to create revenue and
03:04pay bondholders would be to raise energy rates for over 50 years. Isn't that correct? That's correct.
03:14Okay, then bondholders led by Golden Tree expect the people of Puerto Rico to pay higher electricity bills
03:23for decades, just so they can keep profiting. The estimates are that they would have to raise the rates
03:33in order to pay them over 50 years. You would have to increase rates by approximately eight cents.
03:39Thank you. And let me remind this committee that this is not the first time that Golden Tree imposes
03:47its predatory practices to hurt Puerto Ricans. Today, residents pay the highest sale tax when compared to
03:57the 50 states because of COFINA's restructuring plan, from which Golden Tree made $437 million in profit.
04:09Their claims against prepa will make life even more dire in a jurisdiction where over 40% of the people
04:18live in poverty. Mr. Mojica, can you confirm the operational expenses of prepa cover things like
04:27fuel purchases, energy contracts, and salaries? Yeah. All of those things are in the total amount
04:34that is in the rates. Okay. So can you also confirm that recovery funding generally covers
04:43permanent rebuilding and modernization of the grid and its generation facilities?
04:48Within the rates, you would also have to cover both repairs, maintenance, operations of the system,
04:54as well as fuel costs, and as well as the other capital investments. So then why do you think
05:00Mr. Fitzgerald is implying in his letter to the board that over $15 billion in general funding will
05:07help free up prepa's money to pay bondholders? Yeah. I think the letter talks about $15 billion in federal funds
05:15that are available and that have not been spent yet. Those need to get invested in the grid, but our estimates are,
05:21based on what the operators tell us, is that the grid will need significantly more than the $15 billion
05:27that is left in federal funds in order to fix the system. Well, I want...
05:31The general woman's time has expired. Thank you very much. I yield back.
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