The Puerto Rico Electric Power Authority released a restructuring progress report that said the utility is taking steps to improve bill collections and assessing possible changes to its rates.
Also on Tuesday PREPA affirmed that it had released a confidential preliminary five-year business plan to its forbearing bondholders.
The progress report from chief restructuring officer Lisa Donahue can be
Donahue's progress report was more general than concrete.
In PREPA's restructuring the authority has been focusing on safety improvements, regulatory compliance, customer service improvement initiatives, fuel optimization and infrastructure, short/medium term financial forecasting, and business plan development and supporting analysis, Donahue said.
Donahue said that PREPA was engaged in "weekly cash management and forecasting to monitor and address liquidity."
PREPA has been working to increase revenue collection through a comprehensive operational improvement program, she said. PREPA has a substantial problem with customers, particularly government customers, not paying their bills.
To improve collections, PREPA is overhauling its information technology supporting billing, payments, and collections; training 1,300 customer service employees; and introducing metrics to increase accountability of managers and employees, Donahue said.
One of PREPA's biggest problems according to all observers has been its dependence on oil for electricity generation. The price of a barrel of oil has generally been above $100 in recent years. While it has been declining in recent months and is now around $60 per barrel, this is still higher than the levels that prevailed as recently as 2009.
To address the fuel cost issue, PREPA has focused on evaluation and modification of fuel monitoring, refinement of fuel forecasting, and advancing the Aguirre Offshore GasPort project, Donahue said. The Aguirre project would help the authority convert its nearby Aguirre power plant to the cheaper natural gas from oil.
Donahue said the authority has had discussions with the United States Environmental Protection Agency and the Puerto Rico Energy Commission about how to deal with environmental regulatory compliance issues.
On Oct. 3, PREPA hired DuPont Sustainable Solutions to do a comprehensive safety assessment and to make recommendations. DuPont delivered the report with the recommendations in early December. Donahue said she planned to work with the authorities' unions to develop safety procedures. Union officials have raised concerns about PREPA's safety.
As for the restructuring's next steps, Donahue said the authority would redesign its rates, negotiate fuel contracts, develop an integrated resource plan, and come up with additional system options.
Reuters reported Monday that PREPA is seeking extensions to the forbearance agreements' deadlines. These include a March 2 deadline to issue a debt restructuring plan. Reuters said that forbearing bondholders at a Monday night meeting with PREPA officials in New York City were generally amenable to the extension.
