Puerto Rico Electric Power Authority

The Oversight Board has given the local government until Tuesday to introduce a bill to revoke or amend a law that would reduce the Puerto Rico Electric Power Authority's revenues.

In the last few weeks projections from LUMA Energy indicate the authority can afford to pay more bond debt, opposing bond parties say.

The extension of the current solar net metering system could lower revenue for the utility.

In question is FAFAA's findings of fact and conclusions of law, which bondholders say was unauthorized.

Only one of 14 legacy generation facilities were operating normally at the end of January, suggesting less recovery for bondholders.

There is no timetable for rulings in bankruptcy case or appeal of lien rulings, which could lead to months of additional work on a new payment plan.

Bond parties want several creditor classes' votes in favor of the plan of adjustment to be disqualified.

The separate settlements some bond parties have reached with the Oversight Board "dramatically violate" the trust agreement, the trustee's attorney said.

The Oversight Board approved the restructuring of PREPA power supplier AES's municipal bonds as arguments begin in the plan of adjustment hearing.

U.S. District Judge Laura Taylor Swain said she would consider the motion during a scheduled May 22 bankruptcy hearing.

If the appeals court overrules parts of her decision, Judge Swain said she is "capable of adapting and reacting appropriately."

If the appeals court rules for them, the bond parties say, a new plan of adjustment may be needed.

The court is considering whether the original PREPA trust agreement gave bondholders a lien on all revenues, which they argue should extend beyond the debt restructuring, or only on the money the authority deposited in its reserve fund.

While this appeal was rejected, the panel suggested bondholders could immediately file a new motion for relief.

Bond parties say several parts of the original trust agreement support their lien on the authority's revenues.

Board chairman says Juan Sabater will bring valued economic expertise to the panel.

The board says the bondholders have no "unsecured claim" and only a lien on a small amount of money held by the authority when it was placed into bankruptcy.

Judge says the issues can be considered at March's confirmation hearing.

A deal to provide more money for defaulted AES bonds is also under way.

An appeals court is considering the arguments after bondholders lost in the lower court.