Puerto Rico Gov. Ricardo Rosselló said that he would seek to privatize the Puerto Rico Electric Power Authority, the utility in the midst of restructuring $8.2 billion in bond debt.

On Monday afternoon the governor tweeted that in the next few days the government would begin to sell the authority’s assets to create a “modern, efficient, and less expensive generation system for the people.”

PREPA's Costa Sur power plant in Guayanilla, Puerto Rico.
Puerto Rico's governor said that selling the electric power authority would lead to lower prices and greater efficiency.

Such a step would need the approval of the Puerto Rico Oversight Board. There have been reports that board Chairman José Carrión was interested in privatizing the authority. Rosselló presented the idea in a webcast talk late on Monday afternoon.

PREPA is currently subject Title III bankruptcy process of the Puerto Rico Oversight, Management and Economic Stability Act. Judge Laura Taylor Swain may also have input on the governor's proposal.

Rosselló said the first phase will be to create legislation to define the transformation and to listen to market participants. The second phase will be to receive offers and evaluate them. The third phase will be to negotiate offers.

In the speech he said these phases would play out over 18 months.

He said that generation would be sold outright but distribution and transmission would be sold for a term-defined period.

In his speech he said the proceeds from the sale would be used for employee pensions. He said nothing about the authority's bonds or debt.

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