Puerto Rico business groups announced Wednesday that they would sue to block the Puerto Rico Electric Power Authority restructuring deal.
The law suit will be filed by the Institute for Competitiveness and Economic Sustainability of Puerto Rico; the Puerto Rico Manufacturers Association; the United Retailers; the Puerto Rico Products Association; the Chamber of Marketing, Industry and Food Distribution; Puerto Rico Hospitals Association; the Puerto Rico Hotel & Tourism Association; and the Association of Contractors and Consultants of Renewable Energy. On Wednesday afternoon they announced their plan to file suit on Thursday.
The groups' complained about what they say is the deal's "blank check" for rate increases. They also say it includes a big surcharge on renewable and distributed energy.
The groups have declined to announce what court the suit will be filed in or to share the suit prior to the filing.
The restructuring deals reached with creditors in 2015 and the energy legislation passed into law this past winter, require the Puerto Rico Energy Commission to approve rate increases. On June 21 the commission approved a 3.1 cents per kilowatt-hour "transition charge" to support the repayment of a restructured authority debt. On June 27 the commission approved a 1.3 cent per kilowatt-hour increase in PREPA's rates.
The rate increase took effect in August.
Taken together the 4.4 cent increase has raised the rate per kilowatt hour by 26% to 21.3 cents. However, the rate is lower than the 23.52 cent per kilowatt-hour that prevailed in February 2015.
The rate increase is provisional and the commission has until the end of this year to either formalize the changes or alter them.
Neither PREPA nor the Ad Hoc Group of Forbearing Bondholders of PREPA immediately commented on the planned suit.
