[Congressional Record Volume 169, Number 119 (Wednesday, July 12, 2023)]
[Senate]
[Pages S2367-S2368]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      SENATE CONCURRENT RESOLUTION 12--RECOGNIZING THE NEED FOR A 
SUSTAINABLE, ECONOMICALLY VIABLE, AND FAIR DEBT RESTRUCTURING PLAN FOR 
                THE PUERTO RICO ELECTRIC POWER AUTHORITY

  Mr. MENENDEZ (for himself and Ms. Warren) submitted the following 
concurrent resolution; which was referred to the Committee on Energy 
and Natural Resources:

                            S. Con. Res. 12

       Whereas the electrical system of Puerto Rico has been 
     fragile and suffered from a lack of investment for years, 
     since well before Hurricane Maria destroyed the system in 
     2017;
       Whereas, despite local and Federal efforts to rebuild the 
     electrical grid of Puerto Rico, that electrical grid remains 
     extremely fragile and vulnerable;
       Whereas, in September 2022, category-1 Hurricane Fiona 
     triggered an island-wide blackout for 1,500,000 customers;
       Whereas the population of Puerto Rico, the median household 
     income of which is less than \1/2\ of that of the population 
     of the poorest State, pays among the highest electric rates 
     in the United States;
       Whereas the transition to renewable energy is key to 
     reducing electric rates in Puerto Rico by eliminating 
     dependence on imported, price-volatile fossil fuels, which 
     constitute up to 60 percent of the budget of the Puerto Rico 
     Electric Power Authority (referred to in this preamble as the 
     ``PREPA''), but currently only 3 percent of the energy on the 
     island of Puerto Rico comes from clean sources;
       Whereas, between 1974 and 2016, the PREPA made numerous 
     bond issuances pursuant to the Trust Agreement between the 
     Puerto Rico Water Resources Authority and First National City 
     Bank dated January 1, 1974, reaching $8,300,000,000 in 
     outstanding bond debt;
       Whereas the PREPA is considered to have the largest debt of 
     all public entities in Puerto Rico;
       Whereas the retirement system of the PREPA warned that, by 
     April 2023, it would

[[Page S2368]]

     run out of funds to cover the obligations owed to its nearly 
     12,000 pension holders, and has yet to articulate a plan that 
     ensures future monthly payments for retirees;
       Whereas, in July 2017, the Financial Oversight and 
     Management Board for Puerto Rico (referred to in this 
     preamble as the ``FOMB'') filed a petition pursuant to title 
     III of the Puerto Rico Oversight, Management, and Economic 
     Stability Act (48 U.S.C. 2161 et seq.), commencing a debt 
     adjustment proceeding for the PREPA;
       Whereas, in 2019, the FOMB negotiated an agreement with 
     bondholders that would have resulted in a 10- to 16-percent 
     increase over current electric rates for the following 47 
     years;
       Whereas that agreement was ultimately rejected in 2022 by 
     the local legislature and Governor of Puerto Rico, who 
     recognized that the agreement was unaffordable and would 
     impose costs that would undermine the recovery and future 
     economic growth of Puerto Rico;
       Whereas, on December 16, 2022, the FOMB filed a new 
     restructuring plan for the PREPA that proposes to reduce 
     almost \1/2\ of the debt of the PREPA and impose a ``legacy 
     charge'' for consumers who do not benefit from subsidized 
     electric rates;
       Whereas that plan was amended on February 9, 2023, 
     advocating for the issuance of $5,700,000,000 in bonds, or 
     $13,000,000,000 over 35 years with accrued interest, to 
     partially compensate the creditors of the PREPA, including 
     bondholders;
       Whereas the debt service on the new bonds will be paid off 
     via the ``legacy charge'', which includes both fixed monthly 
     charges and charges that depend on the consumption of 
     electricity;
       Whereas the estimated ``legacy charge'' for nonexempt, 
     residential customers would, on average, be around $19 per 
     month;
       Whereas the fixed charge would be between $16 and $1,800 
     per month for commercial and industrial customers;
       Whereas those charges represent an increase in monthly 
     bills for average residents and small businesses of 12 to 13 
     percent, on top of rates that are already double the average 
     price for electricity in the continental United States;
       Whereas, according to estimates by small business 
     representatives in Puerto Rico, once the increases in energy 
     bills under the current restructuring plan are enforced, 
     nearly 12,000 small businesses would be forced to close, a 
     number 3 times higher than in 2020, a year marked by the 
     onset of the Coronavirus Disease 2019 (COVID-19) pandemic;
       Whereas, according to the 2017 testimony of Andrew Wolfe, 
     an economic expert representing the FOMB, those increases 
     would ``eventually contribute to a downward economic spiral 
     that would result in Puerto Rico returning to a path of 
     declining economic activity, which would in turn adversely 
     impact the demand for electricity and in the end lead to 
     another debt service payments crisis for PREPA'';
       Whereas the FOMB proposes to raise electric rates in Puerto 
     Rico in spite of a prior economic analysis of the FOMB 
     showing that electric rates in Puerto Rico are unsustainable 
     at current levels;
       Whereas, in 2022, Congress passed the Puerto Rico Recovery 
     Accuracy in Disclosures Act of 2021 (Public Law 117-82; 48 
     U.S.C. 2178) to impose disclosure requirements on all of the 
     advisers and consultants of the FOMB, closing the loophole in 
     the Puerto Rico Oversight, Management, and Economic Stability 
     Act (48 U.S.C. 2101 et seq.) that has disadvantaged the 
     people of Puerto Rico in the debt restructuring process for 
     the island;
       Whereas, in 2022, the Wall Street Journal reported that 
     stakeholders hired to consult on the bankruptcy proceedings 
     for Puerto Rico initially failed to disclose connections to 
     companies involved in the PREPA debt restructuring deal, 
     raising the potential for conflicts of interest;
       Whereas the latest restructuring plan for the PREPA filed 
     by the FOMB does not represent a ``durable solution for 
     Puerto Rico's fiscal and economic crisis [including] 
     permanent, pro-growth fiscal reforms'', as instructed by 
     Congress in title VII of the Puerto Rico Oversight, 
     Management, and Economic Stability Act (48 U.S.C. 2241);
       Whereas, in June 2023, the United States District Court for 
     the District of Puerto Rico suspended the proceedings to 
     evaluate and confirm that latest restructuring plan; and
       Whereas, on June 23, 2023, the FOMB filed a 2023 Certified 
     Fiscal Plan for the PREPA acknowledging that the latest 
     proposed restructuring plan is not sustainable, and announced 
     that it would present an amended restructuring plan for the 
     PREPA by July 14, 2023: Now, therefore, be it
       Resolved by the Senate (the House of Representatives 
     concurring), That Congress--
       (1) recognizes that the debt adjustment proceeding for the 
     Puerto Rico Electric Power Authority (referred to in this 
     resolution as the ``PREPA'') has been and continues to be of 
     great interest to Puerto Ricans and to Congress;
       (2) recognizes that the continuity of unsustainable 
     electric rates will result in--
       (A) accelerated out-migration from the island of Puerto 
     Rico; and
       (B) business closures and unemployment in Puerto Rico;
       (3) recognizes that the continuity of unsustainable 
     electric rates will further shrink the demand-base and 
     revenues of the PREPA, increasing pressure on the electrical 
     system to cut labor and maintenance costs and inhibiting the 
     reconstruction of the system and the transition to renewable 
     energy;
       (4) urges the Financial Oversight and Management Board for 
     Puerto Rico to put forth a restructuring plan for the PREPA 
     that--
       (A) is economically viable for the PREPA, customers of the 
     PREPA, and PREPA retirees;
       (B) allows for the rehabilitation of the electrical system 
     of Puerto Rico; and
       (C) does not impose additional increases to electric rates 
     for residents, business owners, and users of the electric 
     grid; and
       (5) reaffirms the intent of Congress to create ``durable 
     solution[s] for Puerto Rico's fiscal and economic crisis'' 
     through the adoption of ``permanent, pro-growth fiscal 
     reforms'', as stated in title VII of the Puerto Rico 
     Oversight, Management, and Economic Stability Act (48 U.S.C. 
     2241).

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