Exhibit F

PREPA 2022 CERTIFIED BUDGET 

Case:17-03283-LTS Doc#:23584-6 Filed:02/21/23 Entered:02/21/23 14:57:21 Desc:

Exhibit F Page 1 of 10
BY ELECTRONIC MAIL 

June 30, 2022 

The Honorable Pedro Pierluisi Urrutia 

Governor of Puerto Rico 

Dear Governor Pierluisi Urrutia: 

Pursuant to a Resolution, a copy of which is attached hereto as Exhibit A (the “Resolution”), 

adopted by the Financial Oversight and Management Board for Puerto Rico (the “Oversight 

Board”), and to Section 202(e)(4) of the Puerto Rico Oversight, Management, and Economic 

Stability Act (“PROMESA”), the Oversight Board hereby issues to the Governor this 

compliance certification that the fiscal year 2023 budget for the Puerto Rico Electric Power 

Authority (“PREPA”), attached as Exhibit 1 to the Resolution (the “Fiscal Year 2023 Budget for 

PREPA”), is a compliant budget as set forth in the Resolution. 

The Oversight Board looks forward to working with you and PREPA to fully implement the Fiscal 

Year 2023 Budget for PREPA for the benefit of the people of Puerto Rico. 

Sincerely,

David A. Skeel, Jr. 

Andrew G. Biggs 

Arthur J. González 

Antonio L. Medina 

John E. Nixon 

Justin M. Peterson 

Betty A. Rosa 

CC: Mr. Jaime A. El Koury 

Hon. Omar Marrero Díaz

PREPA Governing Board 

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Exhibit F Page 2 of 10
EXHIBIT A

FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO

June 30, 2022

RESOLUTION CERTIFYING THE FISCAL YEAR 2023 BUDGET FOR PREPA

WHEREAS, on June 30, 2016, the federal Puerto Rico Oversight, Management, and Economic 

Stability Act (“PROMESA”) was enacted; and

WHEREAS, Section 101 of PROMESA created the Financial Oversight and Management Board 

for Puerto Rico (“the Oversight Board”); and

WHEREAS, Section 202(c) of PROMESA establishes a multi-step procedure for the development, 

review, and approval of a budget for covered instrumentalities of the Commonwealth of Puerto 

Rico, such as the Puerto Rico Electric Power Authority (“PREPA”), providing that (i) the 

Governor must submit a proposed budget to the Oversight Board; (ii) the Oversight Board must 

review the proposed budget and determine, in the Oversight Board’s sole discretion, either that the 

proposed budget complies with the applicable fiscal plan or that it does not, in which case the 

Oversight Board must issue a notice of violation and recommended revisions, giving the Governor 

an opportunity to correct the violations; (iii) the Governor may then submit a revised proposed 

budget; and (iv) if the Governor fails timely to submit a proposed budget that the Oversight Board 

determines in its sole discretion is a compliant budget, the Oversight Board shall develop and 

submit to the Governor its own compliant budget; and

WHEREAS, by letter dated February 22, 2022, the Oversight Board, pursuant to Section 202(a) 

of PROMESA, submitted to the Governor a schedule for developing, submitting, approving, and 

certifying the Fiscal Year 2023 Budget for PREPA; and

WHEREAS, from June 15, 2022 through June 17, 2022, PREPA’s representatives, the Oversight 

Board’s staff and consultants, the Puerto Rico Public-Private Partnerships Authority’s (P3A) staff 

and consultants, and attorneys engaged in discussions about the Fiscal Year 2023 Budget for 

PREPA and the Oversight Board’s concerns regarding the budget; and

WHEREAS, on June 22, 2022, the Governor submitted the proposed Fiscal Year 2023 Budget for 

PREPA; and

WHEREAS, the Oversight Board and its advisors held discussions with the Governor’s

representatives regarding the proposed Fiscal Year 2023 Budget for PREPA; and

WHEREAS, after substantial deliberations, on June 28, 2022, the Oversight Board sent to the 

Governor a notice of violation pursuant to Section 202(c)(1)(B) of PROMESA regarding the 

Governor’s proposed Fiscal Year 2023 Budget for PREPA; and

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WHEREAS, the Governor did not submit a revised proposed Fiscal Year 2023 Budget for PREPA

by the established deadline; and

WHEREAS, after substantial deliberations, the Oversight Board determined that the proposed 

Fiscal Year 2023 Budget for PREPA does not reflect a compliant budget as required by Section 

202(c)(2) of PROMESA; and

WHEREAS, the Oversight Board has developed a revised, compliant Fiscal Year 2023 Budget for 

PREPA for submission to the Governor pursuant to Sections 202(c)(2) and 202(e)(4) of 

PROMESA, which budget is attached hereto as Exhibit 1 (the “Compliant 2023 PREPA Budget”);

NOW, THEREFORE, IT IS HEREBY RESOLVED THAT, pursuant to Sections 202(c)(2) and

202(e)(4) of PROMESA, the Oversight Board shall submit to the Governor the Compliant 2023 

PREPA Budget, and such budget shall be (i) deemed to be approved by the Governor, (ii) the 

subject of a compliance certification to be issued by the Oversight Board to the Governor, and (iii) 

in full force and effect beginning on July 1, 2022.

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Exhibit F Page 4 of 10
EXHIBIT 1: PUERTO RICO ELECTRIC POWER AUTHORITY FISCAL 

YEAR 2023 COMPLIANT BUDGET AND BUDGETARY 

RESOLUTIONS PROVISIONS

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Exhibit F Page 5 of 10
I. EXHIBIT 1 - BUDGET - REVENUES PUERTO

RICO ELECTRIC POWER AUTHORITY

$ Thousand FY23 Budget

Basic Revenue

 Residential 418,469

 Commercial 585,076 

 Industrial 101,425 

 Public Lighting 60,749 

 Agricultural 1,962

 Others 2,217 

 Total $ 1,169,899 

Fuel & Purchased Power

 Residential 1,458,820

 Commercial 1,543,555 

 Industrial 377,871

 Public Lighting 48,729

 Agricultural 4,603 

 Others 7,838

 Total $ 3,441,415

CILT

 Residential 47,879

 Commercial 50,660

 Industrial 12,402

 Public Lighting 1,599

 Agricultural 124

 Others 257

 Total $ 112,950 

Subsidies

 Residential 101,790

 Commercial 107,702 

 Industrial 26,366

 Public Lighting 3,400 

 Agricultural 327 

 Others 547 

 Total $ 240,132 

Total Gross Revenue $ 4,964,396 

Other Income 37,358 

Total Unconsolidated Revenue $ 5,001,754 

Bad Debt Expense (74,466)

CILT & Subsidies (353,082)

Total Consolidated Revenue $ 4,574,206 

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Exhibit F Page 6 of 10
II. EXHIBIT 1 BUDGET - EXPENSES (cont’d)

PUERTO RICO ELECTRIC POWER AUTHORITY

$ Thousand FY23 Budget 

A. Fuel & Purchased Power

Fuel 2,889,990

Purchased Power - Conventional 472,207

Purchased Power - Renewable 79,217

Total Fuel & Purchase Power Expenses $ 3,441,415 

B. GenCo - Operations & Maintenance Expenses

Labor

Salaries & Wages 45,511 

Pension & Benefits 28,904

Overtime Pay 11,733 

Overtime Benefits 1,395 

Total GenCo Labor Operating Expenses 87,543 

Non-Labor / Other Operating

Materials & Supplies 19,795 

Transportation, Per Diem, and Mileage 1,527 

Security 9,043 

Utilities & Rents 3,623 

Legal Services 7,405

Professional & Technical Outsourced Services 2,392

Regulation & Environmental Inspection 7,945

Other Miscellaneous Expenses 7,565 

Total GenCo Non-Labor / Other Operating Expenses 59,294 

Shared Services Agreement Impact 59,748 

Total GenCo Operating Expenses 206,585 

Maintenance 

Generation 99,039 

Total GenCo Maintenance Projects Expense 99,039 

Federal Funding Cost Share - 

Total GenCo Operating & Maintenance Expenses $ 305,624 

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EXHIBIT 1 BUDGET - EXPENSES (cont’d) PUERTO 

RICO ELECTRIC POWER AUTHORITY

$ Thousand FY23 Budget 

C. HoldCo - Operations Expenses

Labor

Salaries & Wages 7,513 

Pension & Benefits 4,508 

Overtime Pay 439 

Overtime Benefits 53

Total HoldCo Labor Operating Expenses 12,513 

Non-Labor / Other Operating Expenses

Materials & Supplies 288 

Transportation, Per Diem, and Mileage 242 

Retiree Medical Benefits 9,000 

IT Service Agreements 850

Utilities & Rents 36

Communications Expenses 81

Professional & Technical Outsourced Services 4,144 

Other Miscellaneous Expenses 1,825 

PREPA Restructuring & Title III 25,100 

FOMB Advisor Costs allocated to PREPA 24,400 

 Total HoldCo Non-Labor / Other Operating Expenses 65,966 

Total HoldCo Operating Expenses $ 78,479 

D. GridCo - Operating & Maintenance Expenses

GridCo Labor Operating Expenses 246,471 

GridCo Non-Labor / Other Operating Expenses 289,926 

Operator Service Fees 121,785

2% Reserve 10,728 

Maintenance Projects Expenses 79,778

Total GridCo Operating & Maintenance Expenses $ 748,688 

Total Operating & Maintenance Expenses $ 4,574,206 

Surplus / (Deficit) Before Legacy Pension and Debt Obligations 0 

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Exhibit F Page 8 of 10
EXHIBIT 1 (cont’d)

III. ENFORCEMENT OF THE PUERTO RICO ELECTRIC

POWER AUTHORITY FY23 BUDGET

Section 2.- All expenditures authorized in any prior fiscal year are terminated and no disbursement 

of public funds may be covered by such expenditure authorization, except: (1) expenditures to carry out 

capital improvements that have been accounted for and kept on the books; (2) capital and maintenance 

expenditures with procurement cycles that extend beyond the end of the fiscal year that have been accounted 

for and kept on the books; (3) the portion of any other expenditures authorized in the Puerto Rico Electric 

Power Authority (“PREPA”) Certified Budget for fiscal year 2022; and (4) the portion of the appropriations 

authorized for fiscal year 2022 that have been allocated, transferred or designated on or before June 30 of 

such fiscal year. This restriction on expenditures authorized in any prior fiscal year shall not apply to: (i) 

programs financed in whole or part with federal funds; (ii) orders by the United States district court with 

jurisdiction over all matters under Title III of PROMESA; and (iii) matters pertaining to any consent decree 

or injunction, or an administrative order or settlement entered into with a Federal Agency, with respect to 

Federal programs. In addition, the foregoing exceptions to the restrictions on expenditures authorized in 

any prior fiscal year are conditioned on the prior written approval of the Oversight Board. 

Section 3.- On or before August 31, 2022, the Executive Director of PREPA will provide to the 

Oversight Board a certification indicating whether there are any unused amounts of the fiscal year 2022 

certified budget for items (1), (2), (3), and (4) of Section 2 and, if so, an itemization of such unused amounts. 

Section 4.- Notwithstanding any other statement, no unused budget allotments from any previous 

fiscal year shall be used by PREPA to fund current fiscal year expenditures, except as otherwise expressly 

authorized by the Oversight Board in writing after June 30, 2022. 

Section 5.- The Executive Director of PREPA shall be responsible for not spending or 

encumbering during fiscal year 2023 any amount that exceeds the expenditures authorized for GenCo and 

HoldCo herein for fiscal year 2022, other than amounts above those budgeted for fuel and purchased power, 

which may fluctuate based on market factors or increase due to unforeseen expenses necessary to maintain 

the electric system’s reliability and safety. 

Section 6.- Except for additional expenditures related to fuel and purchased power, the 

expenditures approved in this budget, including payroll and related expenses, may only be reprogrammed 

with the prior express written approval of the Oversight Board. For the avoidance of doubt, this prohibition 

includes any reprogramming of any amount, line item or expenditure provided in this budget. In the case 

of reprogramming to the fuel and purchased power budget, the Executive Director of PREPA must provide 

written notice to the Oversight Board of any change to such amounts within 5 days after any such change 

taking place. 

Section 7.- Pursuant to Section 203 of PROMESA, PREPA must submit to the Oversight Board, 

no later than 15 days after the last day of each quarter of fiscal year 2023, a budget to actual report, along 

with an explanation of relevant variances as provided in the certified Fiscal Plan. The Oversight Board may 

determine to provide PREPA a template to be used for such reporting, in which case any quarterly budget 

to actual reports submitted by PREPA must be submitted consistent with such reporting template. 

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Section 8.- The Oversight Board reserves the right to, in its sole discretion, issue a notice to the 

Governor, pursuant to PROMESA Section 202(a), setting forth a schedule for revising PREPA’s budget. 

Section 9.- The PREPA budget for FY2023 shall take effect on July 1, 2022. 

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