Puerto Rico electric rates to remain basically stable

The Puerto Rico Energy Bureau approved rates that are basically revenue neutral despite the urging of electric power operators for rate increases.

New rates, which will start in July, decrease volumetric charges and increase fixed charges. Overall, residential subscribers are expected to see bills about the same.

Puerto Rico's three main electric operators, the Puerto Rico Electric Power Authority, the private generation company GeneraPR, and the private transmission and distribution company LUMA PR had asked the bureau to increase rates to generate an additional $1.3 billion in revenues annually.

"There is no current debt obligation, so there is no need for debt coverage," the bureau said in its determination. "If and when new financing becomes available, its terms can become the basis for adding a margin to the revenue requirement [to support debt payment.]"

In the meantime, the bureau approved a "placeholder rider for legacy debt for inclusion in the tariff book."

The Puerto Rico electric system has been afflicted with power outages in recent years. The power companies said they need more money to curb these.

"The Puerto Rico Energy Bureau's responsibility is to assess the needs of the electric system and establish an electric rate that supports a level of investment aligned with customer needs," LUMA said in a statement.

"Addressing day-to-day system maintenance, replacing aging infrastructure and responding to unforeseen events requires additional sources of investment, such as those contemplated in this process," LUMA said.

About 80% of the electrical bill revenue covers items outside the transmission and distribution process, which it handles, LUMA said.

LUMA said it and other participating parties have the right to request the Bureau reconsider its decision and the right to appeal it.

GeneraPR said it was evaluating the Bureau's determination.

The bureau emphasized the billions in federal aid still owed to the system from federal aid promised following Hurricane Maria. GeneraPR said it is important to note many projects to improve generation are being executed "with federal funds, which allows the system's transformation to move forward without passing capital investment costs on to customer bills."

The Puerto Rico Oversight Board said it was reviewing the order.

Spokespeople for National Public Finance Guarantee, Assured Guarantee and the Ad Hoc Group for PREPA bondholders didn't immediately respond to a request for a comment.

Residential consumers currently pay approximately 27.23 cents per kilowatt-hour.

In the PREPA bankruptcy the judge wants parties to focus on the bondholders' accounting counterclaim.