Several government officials are suggesting that the Puerto Rico Electric Power Authority, one of the island’s biggest debt issuers, be restructured.
The authority has approximately $8 billion in debt outstanding. PREPA is rated Baa3 by Moody’s Investors Service, BBB by Standard & Poor’s and BBB-minus by Fitch Ratings.
Last week Puerto Rico Senate President Eduardo Bhatia told Caribbean Business he would seek changes at PREPA that might include separating power generation operations from distribution operations but would not include privatization.
Bhatia, a member of the Popular Democratic Party with Gov. Alejandro García Padilla, said PREPA is partly to blame for the island’s high electricity rates.
In late August New Progressive Party Representative Angel “Gary” Rodríguez Miranda called for privatizing PREPA’s electrical system property. Rodríguez Miranda also called for the establishment of an energy regulatory commission to regulate the market. Also in August New Progressive Party Senator Larry Seilhamer called for a partial privatization of PREPA.
The New Progressive Party is the primary opposition party in Puerto Rico.
In May García Padilla formed an advisory group to come up with suggestions on how to deal with PREPA, a spokeswoman for the governor said. The group is supposed to issue its recommendations in November.