Puerto Rico

IEEFA Research

IEEFA report: Retail choice will not bring down Puerto Rico’s high electricity rates

Precedent from U.S. states shows retail choice increases costs to consumers; Opens door to predatory marketing

A research brief released today by the Institute for Energy Economics and Financial Analysis (IEEFA) lays out a cautionary tale to policy-makers in Puerto Rico, as they consider adopting a program known as retail choice in the island’s electricity market. Retail choice is a policy that allows individual customers to select who will supply their […]

August 23, 2018 Read More →
IEEFA report: Effects of long-running oil-purchase scandal undermine privatization and contract-reform initiatives at PREPA

IEEFA report: Effects of long-running oil-purchase scandal undermine privatization and contract-reform initiatives at PREPA

A scheme that contributed to utility’s ruin and a pattern of whistleblower suppression; Potential new grounds for bondholder claims in bankruptcy proceeding; ‘History is repeating itself in Puerto Rico’

July 18, 2018, SAN JUAN (IEEFA) — A long-running practice in which Puerto Rico’s public utility bought low-quality oil at high-quality prices has been mostly ignored in Gov. Ricardo Rosselló’s privatization of the Puerto Rico Electric Power Authority (PREPA). A report published today by the Institute for Energy Economics and Financial Analysis (IEEFA) — “Multibillion-Dollar Oil […]

IEEFA Puerto Rico: PREPA’s Approved Budget Faces Five Years of Shortfalls

Report Puts Average Annual Budget Deficits at $1 Billion; Privatization Will Compound Risks; Hurdles Include Debt Burden and Costly Dependence on Imported Gas and Oil for Electricity Generation

May 25, 1018 (IEEFA) — A budget review published today by the Institute for Energy Economics and Financial Analysis of the approved fiscal-recovery blueprint for the Puerto Rico Electric Power Authority (PREPA) concludes that the plan faces billions in financial risks that will hinder the transformation of the grid. The plan, certified in April by […]

IEEFA Report: Privatizing Puerto Rico’s Electric Company Would Be an Impediment to Modernization  

Plan Would Hurt Ratepayers and Undermine a U.S. Commonwealth’s Entire Economy

Link to Spanish-language press release April 13, 2018 (IEEFA)— The Legislative Assembly of Puerto Rico would be acting in the public’s best interest by blocking a proposed privatization of the Puerto Rico Electric Power Authority, a new report by the Institute for Energy Economics and Financial Analysis concludes. The report — “Privatization Bill Will Not […]

April 13, 2018 Read More →

IEEFA Report: Puerto Rico Can Get 40% of Its Electricity From Renewables by 2028

Transition Will Require Modernization of Generation, Transmission, and Distribution as Well as Strong Regulatory Oversight

March 1, 2018 (IEEFA) — The Institute for Energy Economics and Financial Analysis published a report today describing how Puerto Rico can get 40 percent of its electricity from renewable resources by 2028. The report, published with the Puerto Rico Institute of Competitiveness and Sustainable Economy (ICSE-PR), sees the U.S. commonwealth relying on renewables for 50 percent […]

IEEFA Update: Puerto Rico Is at an Urgent Energy-Policy Crossroads Now

Progress Requires Debt Elimination, Greater Reliance on Microgrids and Renewable Energy, Appointment of an Independent PREPA Administrator

OCT. 24, 2017 (IEEFA) — The Institute for Energy Economics and Financial Analysis (IEEFA) today posted a webinar and data presentation calling for responsible electricity-grid modernization in Puerto Rico and emphasizing the importance of establishing appropriate policy now. The presentation, (download the slide show here) by IEEFA energy consultants Cathy Kunkel and Anna Sommers, follows […]

October 24, 2017 Read More →

IEEFA Puerto Rico: The Aguirre Offshore Gas Port Is Unbankable

PREPA Has No Viable Plan to Finance a $380 Million Project, Leaving Ratepayers to Absorb the Costs

At the heart of the Puerto Rico Electric Power Authority’s flawed plan to upgrade the island’s crumbling electricity system lies a proposed $380 million facility to bring imported liquefied natural gas into the commonwealth. PREPA, as the authority is known, has been promoting the project for years, even though it would mean a perpetuation of […]

IEEFA Puerto Rico: The PREPA Restructuring Plan Before Congress Is Not Realistic and Does Not Hold All Players Accountable

IEEFA Puerto Rico: The PREPA Restructuring Plan Before Congress Is Not Realistic and Does Not Hold All Players Accountable

Bondholders and Dealmakers Are Not Stepping Up; Citizen Ratepayers and Taxpayers Are Left Holding the Bag Under Proposal Before Congress

Puerto Rico’s electricity-system imbroglio is in the public eye today in Washington, where a house subcommittee is holding a public hearing on a plan to restructure the Puerto Rico Electric Power Authority’s staggering $9.5 billion debt. We’ve written a letter to the subcommittee chairman, Rep. Doug LaMalfa, detailing how the debt restructuring plan sells Puerto Rico […]

March 22, 2017 Read More →

IEEFA Puerto Rico: How to Play Hardball With Bondholders

Lessons for PREPA on Placing Customers (and the Economy) Ahead of Creditors

How much of its more than $8 billion in debt can the essentially bankrupt Puerto Rico Electric Power Authority pay back? A federal oversight board appointed four months ago to supervise debt restructuring for the entire Puerto Rican government offered up an indication last week. The board, empaneled in October under the auspices of the […]

January 24, 2017 Read More →

IEEFA Report: Debt Restructuring Deal for Puerto Rico Power Authority Will Not Restore Agency to Financial Health

Flaws Will Result in High Electricity Rates, Burden an Already Ailing Economy, and Prevent the Development of Renewables

CLEVELAND, Aug. 4, 2016 (IEEFA.org) — The Institute for Energy Economics and Financial Analysis published a report today warning of serious flaws in a debt restructuring deal for the Puerto Rico Electric Power Authority (PREPA). The analysis, by IEEFA’s director of finance, Tom Sanzillo, and Cathy Kunkel, an IEEFA energy analyst, concludes that the restructuring […]

August 4, 2016 Read More →

More News and Commentary

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IEEFA update: The unsustainable debt deal that won’t die

Magical debt thinking persists even with Puerto Rico’s economy declining and PREPA losing money

July’s proposal to pay bondholders 77 cents on the dollar for about a third of the debt of the Puerto Rico Electric Power Authority (PREPA) straggles on, neither approved nor rejected despite deadlines passing. If the measure of success of a debt settlement is that it offers realistic payouts to bondholders while allowing the debtor […]

IEEFA op-ed: Conflicted consultants prove costly for Puerto Rico

Millions of dollars squandered on rejected restructuring plans, and a $1.1 billion loss on risky interest rate bets

Overreliance on outside consultants with conflicts of interest and the failure to invest in a competent workforce have imposed huge costs on and severely weakened the Puerto Rico Electric Power Authority (PREPA) and other Puerto Rico government agencies. That’s one of many important lessons from the investigation of Puerto Rico’s debt crisis recently published by […]

October 4, 2018 Read More →

IEEFA update: A perilous rush toward natural gas dependency in Puerto Rico

Reliance on imported fuel is not in the public’s best energy-security interest

IEEFA is urging the Financial Oversight and Management Board (FOMB) of Puerto Rico to halt the rush to natural gas infrastructure development in Puerto Rico. We’ve sent an open letter to board members warning this ill-advised strategy after recent news reports of PREPA discussions around potential new liquefied natural gas import terminals—at San Juan, Mayaguez […]

September 18, 2018 Read More →

IEEFA update: Rampant political hiring at PREPA only makes matters worse

Too many ‘empleados de confianza’ at the Puerto Rico Electric Power Authority

The Kobre & Kim report on Puerto Rico’s debt crisis shines a light on the corrosive impact of political hiring at various governmental agencies on the island, including at its public electric utility. By subsuming competent management to the rough and tumble of political interference in government decision-making and operations, Puerto Rico’s leaders have created […]

September 14, 2018 Read More →

IEEFA update: Is a pay-to-play racket driving Puerto Rico to ruin?

Who got picked to be bond advisers, why, and how much were they compensated?

The Kobre & Kim debt investigation report on Puerto Rico that we wrote about earlier this week establishes a framework for bondholders (and the government) to bring claims against the financial advice industry that participated in the island’s bankruptcy. But it has important omissions. The report leaves out any mention of how the underwriters, bond […]

September 7, 2018 Read More →

IEEFA update: Accountability for the banks, law firms, accountants and credit agencies that orchestrated Puerto Rico’s $72 billion debt crisis

An investigative report names names: Companies that profited from an island's fiscal despair are worth over $2 trillion

An army of high-priced talent from some of the world’s most prestigious law firms, accounting companies, investment banks and credit agencies provided the advice and counsel to the Puerto Rican government that paved the way to the commonwealth’s $72 billion debt problem. The same lawyers, accountants, bankers and credit-rating experts continue to have the ear […]

September 4, 2018 Read More →

IEEFA Puerto Rico: Regulators must move roadblocks to renewable energy for market redesign to succeed

Energy Bureau should reject outdated market structures from mainland states; avoid trap of promoting large natural gas facilities

Puerto Rico has a historic opportunity to rebuild its electrical system and phase out its obsolete oil-fired generation in favor of a much more decentralized and reliable system based on renewable energy. To do that, the island must design a regulatory framework that maximizes the penetration of renewable energy and empowers the creation of locally-based […]

August 28, 2018 Read More →

IEEFA op-ed: Who really owes Puerto Rico’s bondholders—and how much?

Investigation points to negligence and wrongdoing in both the public and private sector

One thing that jumps out from the Puerto Rico Financial Oversight Management Board’s (FOMB) recent report on the island’s debt quagmire is the backward nature of the process by which the powers-that-be are determining how much Puerto Rico’s residents will be on the hook for. The FOMB report, to its credit, lays out a history […]

August 24, 2018 Read More →

IEEFA report: Retail choice will not bring down Puerto Rico’s high electricity rates

Precedent from U.S. states shows retail choice increases costs to consumers; Opens door to predatory marketing

A research brief released today by the Institute for Energy Economics and Financial Analysis (IEEFA) lays out a cautionary tale to policy-makers in Puerto Rico, as they consider adopting a program known as retail choice in the island’s electricity market. Retail choice is a policy that allows individual customers to select who will supply their […]

August 23, 2018 Read More →

Oversight Board report suggests range of changes for Puerto Rico utility

Bond Buyer ($): The official Puerto Rico Oversight Board report on the territory’s debt recommended changes in budgeting, rating and bond issuance practices, but said it was generally too late to punish anyone over the sale of debt that led to the biggest municipal default. The Oversight Board released the 608 page report on Monday […]

August 22, 2018 Read More →