Puerto Rico Electric: Securitization charge methodology proposal filed

By Caroline Salls

Pittsburgh, April 8 – The Puerto Rico Electric Power Authority said the corporation for the revitalization of the authority filed a proposal for the new methodology for securitization charges with the Energy Commission of Puerto Rico.

According to a news release, the proposal was made in accordance with a recently passed revitalization law and as part of the authority’s restructuring support agreement.

Under the restructuring support agreement, the revitalization group will issue bonds in order to refinance existing debt, which will generate a substantial reduction in debt service.

Authority executive director Javier Quintana Mendez said the new methodology will allow a fixed securitization charge to be included on some customers’ invoices. While residential customers will pay the fixed securitization charge, non-residential customers will “contribute a charge per kilowatt/hour.”

“Such charge for securitization will be updated and adjusted at least every three months to cover the payment at the service of the debt,” Quintana Méndez said in the release.

The authority said the securitization charge will provide liquidity to meet its obligations, to invest in infrastructure, to improve customer service, to comply with environmental regulations and ensure a safe work environment for employees.

“This action represents an important step to allow for the issuance of bonds by securitization, which is necessary to enable the authority to implement its recovery plan,” restructuring official Lisa Donahue said in the release.

“The new methodology to evaluate the charges by securitization is the first phase of the transformation of the new tariff structure.”

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