Democrats urge Puerto Rican government to reject debt deal for island's lone utility

Democrats urge Puerto Rican government to reject debt deal for island's lone utility
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Democrats are pushing the Puerto Rican government to reject a debt resettlement deal with the island’s power company, arguing that it will increase Puerto Ricans’ electric bills and stymie development of renewable energy.

A May deal would address the Puerto Rico Electric Power Authority’s (PREPA) $8 billion in debt, pushing the utility to charge customers more to pay off its creditors.

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A letter signed by 36 Democrats late Thursday encourages Puerto Rico’s legislative leaders to oppose the deal, which would reduce the utility’s debt by about one-third but raise prices for its customers.

Puerto Ricans already pay almost double the national average for electricity — 22 cents per kilowatt hour compared to 12 cents nationally — and the new deal is expected to raise electric prices by about 20 percent.

“Higher electricity rates are detrimental to the local economy, causing businesses to operate with reduced profit margins, leaving them less able to expand and hire new employees. The new [deal] will accelerate the outmigration of businesses and residents, depleting what is left of Puerto Rico’s economic foundation,” the letter said.

PREPA filed for bankruptcy in July of 2017, but the arrival of Hurricane Maria just months later compounded problems for the struggling utility. More than 1 million Puerto Ricans lost power during and after the storm, many remaining without electricity for months.

Beyond damage to the economy, lawmakers argue the deal backtracks on a pledge to generate more of Puerto Rico’s electricity through renewable sources.

Under the PREPA deal, customers that generate their own electricity through rooftop solar or other means would still have to pay a fee to contribute towards paying down the utility’s debt unless they go completely off the grid.

The controversial deal must be approved by the Puerto Rico legislature before it can take effect.

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