Puerto Rico utility debt deal could end up costing island consumers $23 billion

first_imgPuerto Rico utility debt deal could end up costing island consumers $23 billion FacebookTwitterLinkedInEmailPrint分享The Intercept:Environmentalists have long been accused of being closet austerians: hair-shirted hippies shaming everyone else for their wasteful ways. The Green New Deal even wants to take away your burgers, and you’ll only be able to watch television when it’s windy out.Yet it’s always been the capitalists, the people most opposed to curbing carbon emissions, who are the ones crimping on regular people’s lifestyles. In Puerto Rico, it’s the bona fide austerians — those looking to impose painful cuts to the public sphere — who are getting in the way of environmental progress, pitting payouts to bondholders against sustainability in almost every sense of the word.The fight against austerity and the fight for the planet are one and the same. At 22 cents per kilowatt hour, Puerto Ricans pay higher electricity bills than their counterparts in any state in the continental U.S. A deal to restructure debt incurred by the island’s sole electric utility, the Puerto Rico Electric Power Authority, or PREPA, could raise electricity prices by 13 percent starting in 2020, funneling funds to the same bondholders who helped land the island in billions of dollars’ worth of potentially illegal debt.As it raises rates, the restructuring agreement could further thwart the island’s transition away from fossil fuels — a goal agreed upon by Puerto Rico’s legislature last month. For the next nearly half-century, residents with solar panels could end up paying bondholders twice: once for the electricity they get from the grid, and again for the power they generate for themselves.An analysis from the Institute for Energy Economics and Financial Analysis, or IEEFA, found that the agreement — meant to settle just over $8 billion of debt — could, after principal and interest payments, end up costing Puerto Ricans $23 billion through 2067. The deal allows the roughly half of PREPA bondholders included in the settlement to swap out their bonds for a new class of bonds whose repayment is pegged to ratepayer bills, and recover up to 75 percent of their initial investment — far higher than what financial analysts predicted just months ago.Gov. Ricardo Rosselló has argued that any higher rates will be balanced out by other cost-saving changes to the grid in the next several months, but those plans also remain vague. “We have a very certain and definite increase weighed against some very speculative changes,” said Cathy Kunkel, an energy analyst with IEEFA. “It’s totally counter,” she said, to both the energy bill and PREPA’s most recently available fiscal plan, which they’re required to submit to the FOMB for approval. “Both said that the target was to get rates below $0.20 per kilowatt hour (kWh).”More: To help pay off bondholders, solar panel owners will be hit hard in Puerto Ricolast_img

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