Energy

In this policy brief we analyze the PREPA Title III bankruptcy case as it enters its ninth year — still unresolved, with enormous consequences for Puerto Rico’s electricity rates, grid investment, and economic future.

The performance of Puerto Rico’s electric power system has been deficient for many years now. During the last seven years the government of Puerto Rico has undertaken massive efforts to transform the system. Yet during the summer of 2024, most of these efforts appear to have been derailed.

We reviewed a summary of the main findings of the PR100 Study in a prior policy brief. This time around we want to focus on a handful of issues that we believe merit further public discussion and analysis in Puerto Rico.

On February 7, representatives of the U.S. Department of Energy presented a summary of the findings of the PR100 Study. While the PR100 Final Report will not be released until late March, in this policy brief we highlight some of the findings of the PR100 Summary due to their importance and their potential policy implications for Puerto Rico’s electricity sector.

In this Policy Brief, we will present an analysis of the principal components of the Generation Operation and Maintenance Agreement, including the basic structure of the transaction; the compensation of the Operator; the estimated savings to be generated as a result of hiring a private operator to operate and maintain the Legacy Generation Assets; the planned decommission of most of the existing facilities that currently use fossil fuels to generate electricity in Puerto Rico; and the resulting structure of Puerto Rico’s electricity market.