PREPA to Miss Monday Restructuring Plan Deadline

The Puerto Rico Electric Power Authority announced that it will miss Monday’s deadline to present a restructuring plan, postponing what would be the largest municipal debt default in U.S. history.

PREPA chief restructuring officer Lisa Donahue said Friday that the forbearing creditors are aware that the deadline will be missed and “have not taken any adverse actions,” according to a press statement.

In August, 2014, PREPA reached separate agreements with a portion of its bondholders/bond insurers, bank lenders, and the Government Development Bank for Puerto Rico. In these agreements it promised to provide a restructuring plan by Monday, March 2. PREPA owes more than 8 billion.

“We have made significant progress to date, but there is more work to do and as a result, we have not yet finalized a plan to present to the forbearing creditors,” Donahue said. “Some time ago, we informed the forbearing creditors that we would not satisfy this milestone.”

PREPA’s current initiatives include working to improve operations by strengthening customer service, fuel forecasting processes, inventory controls, fuel sourcing, supply chain infrastructure, and collections from public and private consumers, PREPA said.

The authority has said it completed a safety assessment and hired DuPont to raise safety standards and practices. It has also retained a rate consultant to assist a rate review process before the Energy Commission. Finally, it has hired an engineering consultant to develop an integrated resource plan to satisfy requirements under the Energy Relief Act.

“We plan on continuing our efforts toward creating the infrastructure and financial resources needed to overcome Puerto Rico’s energy challenges and complete PREPA’s transformation into a self-sustaining business,” said PREPA executive director Juan Alicea Flores.

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