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Independent at‑large Senator Joanne Rodríguez Veve and New Progressive Party Senator Ángel Toledo López have introduced legislation to create a Puerto Rico Electric System Rate Stabilization Fund. The fund would be managed by the Treasury Department and could be used only to provide credits on electricity bills when fuel prices rise sharply. The proposal was prompted by a steep increase in power costs earlier this year. The average residential customer’s quarterly bill rose by $42.27 per month—from $228.59 to $270.86—an 18.5 % increase. “In Puerto Rico, electricity is not only expensive, but also unpredictable,” Rodríguez Veve said. “No family should have to face extraordinary increases from one quarter to the next due to factors beyond their control that disrupt household budgets. This fund would not eliminate the impact entirely, but it would help cushion the blow and provide relief to consumers.” Toledo López said the bill “protects consumers from future increases by creating a savings mechanism with clear rules and specific implementation deadlines.” He added that the fund would “protect those who need it most: families and small businesses.” Key provisions of the bill include: The reserve would be owned by the Puerto Rico government, not the Puerto Rico Electric Power Authority (PREPA). The money could not be used to pay PREPA debts, finance bankruptcy‑related obligations, or cover expenses of other government agencies. The fund would be activated only under extraordinary circumstances, such as a fuel‑adjustment charge increase of at least two cents per kilowatt‑hour from one quarter to the next, or a declaration of a fuel supply or generation emergency by the Puerto Rico Energy Bureau (PREB). The fund could cover up to half of a qualifying increase in electricity costs, and no more than one‑third of the fund’s balance could be spent in any given quarter. Funding sources would include legislative appropriations, 10 % of annual General Fund surpluses, fines collected by PREB, and penalties paid by fuel suppliers and contractors that fail to meet contractual obligations. The PREB would have 120 days to establish the program if the measure is enacted. * The fund would be subject to semiannual reports to the Legislature and oversight by the Office of the Comptroller. The proposal revives an effort first advanced in 2022 when the Legislature approved a similar stabilization fund through Senate Bill 728. Former Governor Pedro Pierluisi Urrutia vetoed that measure because it relied on PREPA accounts receivable tied to the utility’s Title III bankruptcy process, not because of opposition to the fund itself. Lawmakers noted that Puerto Rico has reported more than $2.2 billion in budget surpluses since the 2022 bill was vetoed. If 10 % of those excess funds were set aside as the new bill proposes, more than $220 million would be available in reserve—enough to absorb more than half of the latest fuel‑related rate increase. “As long as Puerto Rico continues to depend on imported fuel, and it will continue to do so for years to come, this tool is a necessity, not a luxury,” Rodríguez Veve and Toledo López said. “We are putting this proposal on the table today. It is now up to the Legislature and the government to fill the fund.” Article source: San Juan Daily Star | Image credit: San Juan Daily Star
Independent at‑large Senator Joanne Rodríguez Veve and New Progressive Party Senator Ángel Toledo López have introduced legislation to create a Puerto Rico Electric System Rate Stabilization Fund. The fund would be managed by the Treasury Department and could be used only to provide credits on electricity bills when fuel prices rise sharply. The proposal was prompted by a steep increase in power costs earlier this year. The average residential customer’s quarterly bill rose by $42.27 per month—from $228.59 to $270.86—an 18.5 % increase. “In Puerto Rico, electricity is not only expensive, but also unpredictable,” Rodríguez Veve said. “No family should have to face extraordinary increases from one quarter to the next due to factors beyond their control that disrupt household budgets. This fund would not eliminate the impact entirely, but it would help cushion the blow and provide relief to consumers.” Toledo López said the bill “protects consumers from future increases by creating a savings mechanism with clear rules and specific implementation deadlines.” He added that the fund would “protect those who need it most: families and small businesses.” Key provisions of the bill include: The reserve would be owned by the Puerto Rico government, not the Puerto Rico Electric Power Authority (PREPA). The money could not be used to pay PREPA debts, finance bankruptcy‑related obligations, or cover expenses of other government agencies. The fund would be activated only under extraordinary circumstances, such as a fuel‑adjustment charge increase of at least two cents per kilowatt‑hour from one quarter to the next, or a declaration of a fuel supply or generation emergency by the Puerto Rico Energy Bureau (PREB). The fund could cover up to half of a qualifying increase in electricity costs, and no more than one‑third of the fund’s balance could be spent in any given quarter. Funding sources would include legislative appropriations, 10 % of annual General Fund surpluses, fines collected by PREB, and penalties paid by fuel suppliers and contractors that fail to meet contractual obligations. The PREB would have 120 days to establish the program if the measure is enacted. * The fund would be subject to semiannual reports to the Legislature and oversight by the Office of the Comptroller. The proposal revives an effort first advanced in 2022 when the Legislature approved a similar stabilization fund through Senate Bill 728. Former Governor Pedro Pierluisi Urrutia vetoed that measure because it relied on PREPA accounts receivable tied to the utility’s Title III bankruptcy process, not because of opposition to the fund itself. Lawmakers noted that Puerto Rico has reported more than $2.2 billion in budget surpluses since the 2022 bill was vetoed. If 10 % of those excess funds were set aside as the new bill proposes, more than $220 million would be available in reserve—enough to absorb more than half of the latest fuel‑related rate increase. “As long as Puerto Rico continues to depend on imported fuel, and it will continue to do so for years to come, this tool is a necessity, not a luxury,” Rodríguez Veve and Toledo López said. “We are putting this proposal on the table today. It is now up to the Legislature and the government to fill the fund.”
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