Judge orders delay in PREPA bankruptcy proceedings

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Puerto Rico bankruptcy Judge Laura Taylor Swain agreed to postpone hearings to potentially approve the Puerto Rico Electric Power Authority bankruptcy deal.

The Puerto Rico Oversight Board asked for the postponement Feb. 18, citing the impact of COVID-19 on the attention of the board and local government, and the possible financial impact to PREPA.

PREPA power plant at Guayanilla
The PREPA power plant at Guayanilla, Puerto Rico.

On Thursday Swain said the planned June 17 and 18 hearings on the Restructuring Support Agreement would be postponed to another date to be scheduled in the future. She also postponed the April 14 deadline for government parties and other RSA parties to file replies in support of the deal approval motion.

She directed the board to file a status report covering the authority’s financial condition and proposing future steps towards approving the motion for approving the deal (“9019 motion”) by no later than May 15.

In other PREPA legal developments, the authority and the board filed a motion in the bankruptcy proceedings on Wednesday asking her permission to approve contracts with EcoEléctrica and Gas Natural Aprovisionamientos SDG. The contracts will benefit power and natural gas availability in the southern part of the Puerto Rico, which experienced a series of earthquakes in January that damaged the authority’s infrastructure.

According to PREPA, the contracts would save it $100 million per year.

In the motion, PREPA and the board said it was still examining whether to rebuild the Costa Sur plant damaged by the earthquakes or to simply build a new plant. The authority said that either way, the contracts would benefit it because the majority of their savings are unrelated to the Costa Sur plant.

On Thursday Swain said that she would consider the motion for the contracts at the Title III bankruptcy omnibus hearing scheduled for April 22.

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