PREPA Announces Plan for Initial FEMA Funds

While PREPA prepares to receive up to $3.5 billion in FEMA funds by August, it has outlined its plans to begin the execution of four chief initiatives, which include a pilot program for a new power grid. In addition, PREPA plans to fund three other initiatives: relocating the electrical transmission lines to serve the Luis Munoz Marin International Airport (SJU) underground, relocating and reconstructing 18 substations flooded by Maria and creating an Eastern Region Pharma Corridor, which would provide power to pharmaceutical, biotech and gas companies on the east side of the Island, via underground power lines.

Government Seeks Entity to Manage Hydroelectric Power Plants

The government is inviting companies or consortiums interested in the rehabilitation and administration of the hydroelectric system of the Island to submit their qualifications on or before June 3. For years, the system has operated below its capacity to generate electricity due to lack of maintenance and the damage caused by both Hurricanes Irma and Maria. PREPA is interested in establishing a public-private partnership with parties who have experience in developing, operating, and maintaining hydroelectric generators of more than 1.5 megawatts and the financial stability and expertise to do so.

FOMB Rejects Proposed 2020 Budget and Expands Influence to Puerto Rico Municipalities

Puerto Rico’s Financial Oversight and Management Board (FOMB) rejected the fiscal year 2020 budget submitted by the Island’s government in March, arguing that it does not comply with the Revised Fiscal Plan nor does it meet the requirements set forth by the FOMB. In a letter dated May 11, addressed to Governor Rosselló, FOMB Executive Director Natalie
Jaresko listed, among the “most significant items of non-compliance,” the General Fund Government submission, which exceeded the FOMB target by at least $1.5 billion and the inclusion of $41.2 million in Christmas bonuses. Per the FOMB, the General Fund revenue forecast to be used for budgeting purposes is $9.05 billion, while the “other funds” revenue forecast is $3.55 billion.

In other news, many mayors admit that the FOMB has the legal authority to oversee municipalities after the recently announced pilot program, through which the FOMB plans to oversee financial aspects of ten municipalities’ management. Eventually, the program will be covered to expand all 78 municipalities, as well as the Municipal Revenue Collection Center
(CRIM, in Spanish). Not every mayor is on board with this plan and Mayor Carmen Yulín Cruz of San Juan recently announced her plans to file a lawsuit against the FOMB to halt this plan.

Florida Lawmakers Oppose Plan to Use State as Dumping Ground for Puerto Rico Coal Ash

Florida politicians, including Osceola county commissioners and Congressman Darren Soto, have expressed their opposition to a contract that allows AES Puerto Rico, one of the Island’s chief power generating companies, to deposit coal ash waste in Florida. According to the contract between AES and JED Landfill, Florida is expected to accept 650 million tons of coal ash, at a price of $2 per ton.

Osceola county commissioners are asking JED Landfill to voluntarily desist from carrying out
its plans.