Exhibit Q

ANALYSIS OF SAVINGS OF CBA MODIFICATIONS

Case:17-03283-LTS Doc#:23584-17 Filed:02/21/23 Entered:02/21/23 14:57:21 Desc:

Exhibit Q Page 1 of 7
1

Does not constitute an audit opinion or legal advice. 

All assumptions, forecasts, projections, recommendations, conclusions, or opinions in this document are solely those of the Board. 

Draft – Subject to Material Change

Reliance Restricted Table of Contents

Summary of estimated cost savings from proposed CBA amendments 3

Assumptions used to estimate amended CBA savings 4

Summary of proposed CBA amendments related to local labor laws 5

Summary of proposed CBA amendments related to workforce and personnel policies 6

A

B

C

D

Case:17-03283-LTS Doc#:23584-17 Filed:02/21/23 Entered:02/21/23 14:57:21 Desc:

Exhibit Q Page 2 of 7
2

Does not constitute an audit opinion or legal advice. 

All assumptions, forecasts, projections, recommendations, conclusions, or opinions in this document are solely those of the Board. 

Draft – Subject to Material Change

Reliance Restricted Disclaimer

The Financial Management and Oversight Board for Puerto Rico and its advisors (the "Board") have prepared this report based upon

information and material supplied by the Board, Board advisors, the Government of Puerto Rico (the "Government"), the Puerto Rico 

Electric Power Authority (“PREPA”) and other publicly available sources. 

The information in this report was performed only for the use and benefit of the Board and should not be used or relied on by anyone 

else. Other persons who read this report do so at their own risk and are not entitled to rely on it for any purpose. This report does not 

constitute any legal opinion or advice and is not being issued in connection with any issuance of debtor other financing transaction. 

The Board does not assume any duty, obligation or responsibility whatsoever to any other parties that may obtain access to the 

Report. 

The Board relied on information and underlying data provided by the Board, Board advisors, the Government, PREPA or publiclyavailable resources, and such information was presumed to be current, accurate and complete. The Board did not conduct an 

independent assessment or verification of the completeness, accuracy or validity of the information obtained. Consequently, the 

Board provides no assurance of any kind with respect to, or on, the information presented.

The Board has the knowledge, experience and ability to form its own conclusions. Any assumptions, forecasts, projections, 

recommendations, conclusions or opinions contained in this report are solely those of the Board. Assumptions deemed reasonable 

for these estimates do not indicate whether another party would have selected the same assumption or methods. The use of other 

assumptions may also be reasonable and could produce different results. 

There will usually be differences between projected and actual results because events and circumstances frequently do not occur as 

expected and those differences may be material. As a result, no assurance regarding the achievement of forecasted results is 

provided, and reliance should not be placed on any forecasted results or projects contained herein as such information is subject to 

material change and may not reflect actual results. The Board takes no responsibility for the achievement of projected results.

Case:17-03283-LTS Doc#:23584-17 Filed:02/21/23 Entered:02/21/23 14:57:21 Desc:

Exhibit Q Page 3 of 7
3

Does not constitute an audit opinion or legal advice. 

All assumptions, forecasts, projections, recommendations, conclusions, or opinions in this document are solely those of the Board. 

Draft – Subject to Material Change Summary of estimated savings to amend CBAs to Puerto Reliance Restricted 

Rico labor laws and workplace optimization

$000s

The projected savings are based on financial, labor and employee assumptions in the PREPA 2022 Fiscal Plan and 

PREPA FY2023 Budget certified June 30, 2022

A

Breakdown of potential saving components Annual ¢/kWh 5-yr

(1) Reduce OT rate to 1.50x $ 2,633 0.016¢ $ 13,163 

(2) Reduce vacation accrual rate 2,278 0.014¢ 11,391 

(3) Reduce Christmas bonus to $600 996 0.006¢ 4,980 

(4) Eliminate future accumulated sick time liquidation 644 0.004¢ 3,220 

(5) Reduce Holidays from 24 to 20 608 0.004¢ 3,038 

(6) Eliminate discretionary bonus 431 0.003¢ 2,153 

(7) Reduce sick time accrual rate 309 0.002¢ 1,545 

(8) Eliminate productivity bonus 272 0.002¢ 1,362 

Potential savings from labor laws (annual) $ 8,170 0.050¢ $ 40,850 

(9) Modify Workday/Workweek (8 hr./40 hr.) 1,266 0.008¢ 6,328 

(10) Workplace efficiencies from workforce optimization 1,768 0.011¢ 8,841 

(11) Increased UHC from $125 to $170 (269) (0.002¢) (1,345)

Potential Labor Savings (annual) $ 10,935 0.067¢ $ 54,675 

Source: PREPA 2022 Fiscal Plan, FY2023 Fiscal Budget, Act 66-2014, Act 3-2017, Act 8-2017, Act 26-2017

Projected savings are incremental to projections to the extent PREPA has not adhered with all provisions of the emergency labor laws, other than Christmas Bonus which was not budgeted but reported as paid by PREPA in 

FY2022 (November 2021). Workplace flexibility initiatives include modifications to employee transfers, reassignment and relocation, rate and shift differentials, notice periods, waiting periods, and classification requirements

Case:17-03283-LTS Doc#:23584-17 Filed:02/21/23 Entered:02/21/23 14:57:21 Desc:

Exhibit Q Page 4 of 7
4

Does not constitute an audit opinion or legal advice. 

All assumptions, forecasts, projections, recommendations, conclusions, or opinions in this document are solely those of the Board. 

Draft – Subject to Material Change Proposed amendments are projected to generate Reliance Restricted 

incremental economic savings 

The proposed amendments developed by FOMB and the Government would generate savings that could be redeployed to fund PREPA’s transformation

B

(1) Savings for reduced OT wages resulting from the reduction from 2.0x to 1.5x

(2) Savings from vacation accrual reduced to 1.25 days per month (2.5 to 1.25 days); avg. reduction 15 vacation days

(3) Impact of Christmas bonus at $600 per year from avg. of $1,600 per 13-wk Cash Flow

(4) Savings from the elimination of the ability to liquidate unused accrued sick time above the max carryover;

(5) Savings from the reduction of 4 Holidays down to the current 20 holidays provided by Act 26-2017

(6) Savings from the elimination of discretionary bonuses of UTIER: $600 per year and UEPI: $450 per year

(7) Savings from reduction in sick leave accrual rate for employees hired before/after Act 3-2017

(8) Savings elimination of bonuses under CBAs of UTIER: $400 per year

(9) Savings estimate from modifying the workday to 8 hrs. (from 7.5); work week increased to 40 hrs. (from 37.5)

(10) Savings estimate from workplace flexibility with a targeted 10% OT savings (target excludes pay rate and 8 hr. workday)

(11) Cost of UHC increase to $170 per year from $125 per Fiscal Plan to match with AFSCME PSA in Commonwealth POA

Breakdown of potential saving components

Other Assumptions

Source: PREPA 2022 Fiscal Plan, FY2023 Fiscal Budget, Act 66-2014, Act 3-2017, Act 8-2017, Act 26-2017

Projected savings are incremental to projections to the extent PREPA has not adhered with all provisions of the emergency labor laws, other than Christmas Bonus which was not budgeted but reported as paid by PREPA in 

FY2022 (November 2021). Workplace flexibility initiatives include modifications to employee transfers, reassignment and relocation, rate and shift differentials, notice periods, waiting periods, and classification requirements

Primary legislation Act 66-2014, Act 3-2017, Act 8-2017, Act 26-2017

Headcount FY2023 Budget included 996 active FTEs; UTIER: 681 and UEPI: 48

Average Salary FY2023 Budget avg. salary of $39,404; UTIER: $35,404 and UEPI: $46,036

Annual Overtime 2022 Fiscal Plan OT labor assumption of 20% of regular wages in FY2023

Case:17-03283-LTS Doc#:23584-17 Filed:02/21/23 Entered:02/21/23 14:57:21 Desc:

Exhibit Q Page 5 of 7
5

Does not constitute an audit opinion or legal advice. 

All assumptions, forecasts, projections, recommendations, conclusions, or opinions in this document are solely those of the Board. 

Draft – Subject to Material Change

Reliance Restricted 

Provisions UEPI UTIER Alignment to Act 26

Evergreen Clause • CBA will remain in force until a new 

CBA is effective or signatory provides 6-

month termination notice

• CBA will remain in force until a new 

CBA is effective or signatory provides 8-

month termination notice

• Eliminate provision

Overtime Pay • Overtime in excess of 37.5 hours at 2.0x 

the regular salary

• Overtime in excess of 37.5 hours at 2.0x 

the regular salary

• Reduce OT rate to 1.5x the regular 

salary/hourly rate

Vacation Leave • Accrued at 21⁄2 days

• Accrue up to 30 days a year

• Unused days are carried over or 

liquidated

• Accrued at 21⁄2 days

• Accrue up to 30 days a year

• Unused days are carried over or 

liquidated

• Accrued at 11⁄4 day/month; up to 60 days

• Accrue up to 15 days a year 

• Liquidated at retirement/termination

Sick Leave • Accrue up to 19 days/yr. without 

limitation

• Over 90 days are liquidated

• Accrue up to 19 days/yr. without 

limitation 

• Over 90 days can be liquidated

• Accrue at 1 day or 11⁄2 day/month 

(based on start date); up to 90 days

• No liquidation

Holidays • 24 holidays (+1 in election year)

• Paid at 2x the regular rate if employee 

works

• 24 holidays (+1 in election year)

• Paid at 2x the regular rate if employee 

works

• Currently 20 CW holidays

• Paid at 1.5x regular salary/hourly rate

Other Bonuses • Specific employees will receive bonus of 

up to $450

• Specific employees will receive bonus of 

up to $600

• Productivity bonus of up to $400

• Eliminate all bonuses per Act 26-2017 

and FP other than Christmas bonus

Christmas Bonus • Bonus equivalent to 8% for the first 

$60K and 4% for any incremental salary

• Bonus equivalent to 8% for the first 

$60K and 4% for any incremental salary

• Bonus of $600 per year

Summary of CBA economic rules to align employee 

benefits with Puerto Rico labor laws and other provisions

C

Source: Collective Bargaining Agreement - Workers Union of the Electric Power and Irrigation Industry (UTIER, acronym in Spanish) and Puerto Rico Electric Power Authority (AEE, acronym in Spanish) dated August 24, 2008; and Collective 

Bargaining Agreement - Union of Independent Professional Employees (UEPI) and Puerto Rico Electric Power Authority (AEE, acronym in Spanish) dated September 15, 2014

Case:17-03283-LTS Doc#:23584-17 Filed:02/21/23 Entered:02/21/23 14:57:21 Desc:

Exhibit Q Page 6 of 7
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Does not constitute an audit opinion or legal advice. 

All assumptions, forecasts, projections, recommendations, conclusions, or opinions in this document are solely those of the Board. 

Draft – Subject to Material Change

Reliance Restricted 

Provisions UEPI UTIER Notes

Subcontracting • Subcontracting needs to be approved by 

the union

• Subcontracting only allowed in 

emergency situations

• Provide staffing flexibility 

Transfers • Transfer to another muni $575

• Transfer within the muni $350

• Transfer to another muni $575

• Transfer within the muni $350

• Provide staffing flexibility 

Complaint Resolution • All complaints, disputes, or claims are 

subject to arbitration

• All complaints, disputes, or claims are 

subject to arbitration

• Provide for pre-petition claim process

Workday • 37.5 hours a week (plus 1 hour lunch) • 37.5 hours a week (plus 1 hour lunch) • Provide staffing flexibility 

Vacant / New Positions • Most qualified employee to be prioritized • 8-step process to determine qualified 

employee

• Provide staffing flexibility 

Employment 

Stabilization

• If a department is reduced, preference 

shall be given to remain to employees 

with more seniority

• If a workstream is suspended, affected 

employees will be prioritized to fill 

vacancies

• Provide staffing flexibility 

Summary of CBA workforce and personnel policies to 

increase staffing flexibility

D

Source: Collective Bargaining Agreement - Workers Union of the Electric Power and Irrigation Industry (UTIER, acronym in Spanish) and Puerto Rico Electric Power Authority (AEE, acronym in Spanish) dated August 24, 2008; and Collective 

Bargaining Agreement - Union of Independent Professional Employees (UEPI) and Puerto Rico Electric Power Authority (AEE, acronym in Spanish) dated September 15, 2014

Case:17-03283-LTS Doc#:23584-17 Filed:02/21/23 Entered:02/21/23 14:57:21 Desc:

Exhibit Q Page 7 of 7