If the Puerto Rico Energy Bureau (PREB) decides to grant a credit to subscribers for the estimated $44 million that the Puerto Rico Electric Power Authority (PREPA) would receive as reimbursement for excessive spending on the purchase of diesel -after the earthquakes of 2020 will damage units 5 and 6 of Costa Sur- its liquidity flow would be seriously affected, assured executives of the public corporation.
Nelson Morales, PREPA’s finance director, indicated that of the $1,092.1 million they had in cash for March of this year, they now have $873.3 million, a decrease of $218.8 million.
Of that amount, about $636.5 million cannot be used because they belong to the energy transmission and distribution system, in charge of LUMA Energy. Therefore, PREPA has $236.8 million available for operating expenses, including payroll, capital improvements and professional expert services, among others.
Morales attributed the decrease to several factors, such as a reduction in billing to customers, an increase in the price of fuel and does not rule out that there is greater delinquency on the part of subscribers than since the start of the covid-19 pandemic. their service is cut off, even if they don’t pay their bills.
“We have already seen in the last five months a significant decrease in what is in the authority’s box. If this pattern continues, it represents a greater challenge for the authority, so we want to persuade them of any possible additional deferral… (because we would be left) in a precarious situation in the coming months,” the official said in an exclusive interview with THE SPOKESPERSON.
Mary Carmen Zapata Acosta, PREPA deputy director of operations, emphasized that there are not even guarantees that the public corporation will receive that amount because the negotiations with the insurers have not concluded, which may take several years. In addition, the Federal Emergency Management Agency (FEMA) does not reimburse funds until private insurance claims are exhausted.
The deputy director emphasized that neither FEMA nor the Central Office of Recovery, Reconstruction and Resilience (COR3, in English) have issued an official notification on the amount of the reimbursement.
“Right now, PREPA has less money in cash than it had projected we should have this month to be able to pay our suppliers”declared Zapata Acosta.
“In the event that we do not have that money in cash available… they are going to put up with the supply of fuel and that, in operations, the effect that it has is that we will have to shut down units due to lack of fuel and that translates into large-scale blackouts. scale due to lack of generation and in turn it is not because the units are not able to operate, but due to lack of fuel because we cannot pay for it. That is the knock-on effect of not having enough cash in hand,” he argued.
Zapata Acosta explained that the past administration made a single claim for three different situations: excess expenses for fuel costs as a result of the earthquakes, expenses for the management and operation of the electrical system, and the purchase of three mega emergency generators after the passage of the hurricane. Maria in 2017.
The deputy director does not know why it was done that way, mixing separate emergencies with each other, although an investigation has already begun to find the reasons and see if they can somehow be separated.
He explained that FEMA does not reimburse operational expenses either, so there are still many calculations to be made before stipulating exact amounts that can be credited to clients.
Likewise, he assured that since January PREPA has asked PREB not to defer or give credit to subscribers in advance due to “the fiscal situation of the authority and our cash flow condition”, from what they understand the regulatory entity is at the so much of what is going on. Meanwhile, it rejected the concealment of information about these funds, as alleged by PREB in a resolution.
Zapata Acosta reported that in March of this year a notification was received that the United States Congress approved increasing the contribution of federal aid from 75% to 90% for reimbursement of expenses related to incidents that occurred between the 1st. from January 2020 to December 31, 2021.
Although it is true that this would imply a greater amount of money reimbursed, it is also true that FEMA still does not have information on what this would represent for PREPA and there is no official certification of the final amount. However, the public corporation decided to provide the information to PREB in July as part of its obligation, Zapata Acosta mentioned.
On the other hand, LUMA Energy yesterday submitted to PREB an estimate of what could be claimed in federal funds and instead of $44 million, its calculations indicate that the reimbursement would be closer to $34 million.
The business has said that before the end of July it will make a decision on whether or not it would apply a credit to customers for the increase in funds from 75% to 90% that are supposed to reach PREPA’s coffers at some point. .
The most recent reconciliation of expenses and projections culminated in an increase of 4.3 cents per kilowatt hour (kWh), raising the rate to a record 33.6 cents for residential customers.
According to the motion delivered yesterday by LUMA, if the $34 million credit is applied now, which is what they understand FEMA would eventually reimburse, the kWh would drop to 31.3 cents. If only a credit is applied for the slight drop in fuel costs seen in recent weeks, the rate would drop to 32.5 cents per kWh.