EXHIBIT E 

Case:17-03283-LTS Doc#:23481-5 Filed:02/03/23 Entered:02/03/23 17:03:03 Desc:

Exhibit Page 1 of 12
Analysis Group Presentation on

Share of Wallet Analysis

PRELIMINARY DRAFT 12/12/2022

Share of Wallet Analysis | AHG of PREPA Bondholders and Monolines | December 12, 2022 | ATTORNEY WORK PRODUCT – PRIVILEGED AND CONFIDENTIAL – SUBJECT TO MEDIATION PRIVILEGE

Case:17-03283-LTS Doc#:23481-5 Filed:02/03/23 Entered:02/03/23 17:03:03 Desc:

Exhibit Page 2 of 12
Share of Wallet Analysis | AHG of PREPA Bondholders and Monolines | December 12, 2022 | ATTORNEY WORK PRODUCT – PRIVILEGED AND CONFIDENTIAL – SUBJECT TO MEDIATION PRIVILEGE 2

Error 1: McKinsey’s “Median Monthly Household Income” Forecast Does 

Not Incorporate the Most Recent Data

Sources:

[1] McKinsey Backup File “4.17.9.16_20221206 SOW_Risk_Mediation.xlsx” received December 6, 2022.

[2] 2021 PRCS, available at https://data.census.gov/table?q=Insurance,+Utilities,+and+Other+Fees&g=0400000US72&tid=ACSST1Y2021.S2503

$20,226

$21,936

$24,117

$18,000

$19,000

$20,000

$21,000

$22,000

$23,000

$24,000

$25,000

2019 2020 2021 2022 2023 2024

Median Household Income

McKinsey Median Annual HH Income Forecast

Updated Median Annual HH Income Forecast

McKinsey’s income forecast is based on median HH income from the 2019 Census Data, 

which underestimates actual 2021 median HH income by 9.0%

Actual 2019 Median 

HH Income: $20,474

Actual 2021 Median 

HH Income: $22,237 9.0% Diff.

Median Monthly Household Income Forecast

There is no need to forecast an 

income number that is knowable

PRELIMINARY DRAFT 12/12/2022 Case:17-03283-LTS Doc#:23481-5 Filed:02/03/23 Entered:02/03/23 17:03:03 Desc:

Exhibit Page 3 of 12
Share of Wallet Analysis | AHG of PREPA Bondholders and Monolines | December 12, 2022 | ATTORNEY WORK PRODUCT – PRIVILEGED AND CONFIDENTIAL – SUBJECT TO MEDIATION PRIVILEGE 3

McKinsey’s SOW Calculation Incorrectly Compares Average Household 

Consumption and Median Household Income

$ $ $ $$ $$ $$ $$$ $$$ $$$

kWh kWh kWh kWh kWh kWh kWh kWh kWh

McKinsey uses Average Consumption of 

Unsubsidized Households...

...and divides by the Median Household Income of All Households

kWh: Household Electricity Consumption

$$: Household Income

Subsidized Households

Illustration of Value used by McKinsey

 Electricity SOW = Monthly Electricity Bill divided by Monthly Income 

 It is incorrect to mix averages and medians when calculating SOW

 Average consumption is inflated by the higher electricity consumption of households earning more than the median 

level of income

 A household earning a median income consumes less electricity than households in higher income cohorts

PRELIMINARY DRAFT 12/12/2022

Case:17-03283-LTS Doc#:23481-5 Filed:02/03/23 Entered:02/03/23 17:03:03 Desc:

Exhibit Page 4 of 12
Share of Wallet Analysis | AHG of PREPA Bondholders and Monolines | December 12, 2022 | ATTORNEY WORK PRODUCT – PRIVILEGED AND CONFIDENTIAL – SUBJECT TO MEDIATION PRIVILEGE 4

McKinsey’s Analysis of Consumption by Cohort Illustrates that Monthly Consumption 

Increases with Income

Note:

[1] McKinsey’s “PRCS Load” is defined by “Average consumption is per PRCS data.”

Source:

[1] “Residential Customer Analysis.xlsx.”

Income Tax 

Range PRCS Load

Category Lo Hi Monthly

Subsidized 0 10,000 331 

Subsidized 10,001 20,000 401 

Not Subsidized 10,001 20,000 401 

Not Subsidized 20,001 30,000 453 

Not Subsidized 30,001 40,000 489 

Not Subsidized 40,001 50,000 544 

Not Subsidized 50,001 60,000 594 

Not Subsidized 60,001 70,000 629 

Not Subsidized 70,001 80,000 686 

Not Subsidized 80,001 90,000 702 

Not Subsidized 90,001 100,000 717 

Not Subsidized 100,001 250,000 810 

Not Subsidized 250,001 500,000 978 

0

200

400

600

800

1000

1200

Monthly Consumption (kWh)

Income Tax Range

Income vs Monthly Consumption

Subsidized Not Subsidized

PRELIMINARY DRAFT 12/12/2022

Case:17-03283-LTS Doc#:23481-5 Filed:02/03/23 Entered:02/03/23 17:03:03 Desc:

Exhibit Page 5 of 12
Share of Wallet Analysis | AHG of PREPA Bondholders and Monolines | December 12, 2022 | ATTORNEY WORK PRODUCT – PRIVILEGED AND CONFIDENTIAL – SUBJECT TO MEDIATION PRIVILEGE 5

Correction of McKinsey Error 2

$ $ $ $$ $$ $$ $$$ $$$ $$$

kWh kWh kWh kWh kWh kWh kWh kWh kWh

McKinsey uses the Average Consumption 

of Unsubsidized Households...

...and divides by the Median Household Income of All 

kWh: Household Electricity Households...

Consumption

$$: Household Income

Subsidized Households

Illustration of Value used by 

McKinsey

$ $ $ $$ $$ $$ $$$ $$$ $$$

kWh kWh kWh kWh kWh kWh kWh kWh kWh

Corrected SOW calculation uses Median Consumption of All 

Households...

...and divides by the Median Household Income of All 

Households...

kWh: Household Electricity 

Consumption

$$: Household Income

Subsidized Households

Illustration of Corrected Value

McKinsey SOW Methodology Correction for Error 2

PRELIMINARY DRAFT 12/12/2022 Case:17-03283-LTS Doc#:23481-5 Filed:02/03/23 Entered:02/03/23 17:03:03 Desc:

Exhibit Page 6 of 12
6

485

381

200

250

300

350

400

450

500

550

600

Average Monthly Consumption of All Unsubsidized Customers

(Used in the McKinsey SOW Analysis)

Median Household Monthly Consumption of Households Earning Median Income of

$24,117

Monthly Consumption (kWh)

Share of Wallet Analysis | AHG of PREPA Bondholders and Monolines | December 12, 2022 | ATTORNEY WORK PRODUCT – PRIVILEGED AND CONFIDENTIAL – SUBJECT TO MEDIATION PRIVILEGE

Error 2: McKinsey’s SOW Calculation Incorrectly Uses an “Average Monthly Bill,” Which 

Overstates Electricity Consumption of the Median Income Earning Household 

2024 forecasted Electricity Consumption of the Median Income Earning Household is 27% less than the 

McKinsey’s 2024 Average Monthly Electricity Consumption of All Unsubsidized Customers

Note:

[1] Median Household Monthly Consumption for Full Population from 2021 Census Data is escalated from 2021 to 2024 using the growth in residential load per customer from the PREPA 2022 Fiscal Plan.

Sources:

[1] “4.17.9.16_20221206 SOW_Risk_Mediation.xlsx” received December 6, 2022.

[2] U.S. Census Bureau, 2021 Puerto Rico Community Survey.

[3] PREPA 2022 Fiscal Plan.

PRELIMINARY DRAFT 12/12/2022 Case:17-03283-LTS Doc#:23481-5 Filed:02/03/23 Entered:02/03/23 17:03:03 Desc:

Exhibit Page 7 of 12
Share of Wallet Analysis | AHG of PREPA Bondholders and Monolines | December 12, 2022 | ATTORNEY WORK PRODUCT – PRIVILEGED AND CONFIDENTIAL – SUBJECT TO MEDIATION PRIVILEGE 7

The Corrected Forecasted SOW for the Median Household is Always Below 

Six Percent Under both FOMB’s and Bondholders’ Proposals

 Correcting for McKinsey’s Errors 1 and 2, SOW 

under both of the FOMB and Bondholders’ 

Proposals are below the FOMB’s 6% threshold 

from 2024 onwards.

 The differences between the two proposals in 

terms of SOW ranges from 0% in 2024 to 

0.19% in 2040.

Note:

[1] Median Household Monthly Consumption for Full Population from 2021 Census Data is escalated from 2021 to 2024 using the growth in residential load per customer from the PREPA 2022 Fiscal Plan.

Sources:

[1] “4.17.9.16_20221206 SOW_Risk_Mediation.xlsx” received December 6, 2022.

[2] U.S. Census Bureau, 2021 Puerto Rico Community Survey.

[3] PREPA 2022 Fiscal Plan.

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040

SOW Projection After Correcting for Errors 1 and 2

Corrected SOW, Bondholder Proposal

Corrected SOW, FOMB Proposal

McKinsey SOW Threshold

PRELIMINARY DRAFT 12/12/2022 Case:17-03283-LTS Doc#:23481-5 Filed:02/03/23 Entered:02/03/23 17:03:03 Desc:

Exhibit Page 8 of 12
Analysis Group Presentation on

Share of Wallet Analysis

PRELIMINARY DRAFT 12/13/2022

Share of Wallet Analysis | AHG of PREPA Bondholders and Monolines | December 13, 2022 | ATTORNEY WORK PRODUCT – PRIVILEGED AND CONFIDENTIAL – SUBJECT TO MEDIATION PRIVILEGE

Case:17-03283-LTS Doc#:23481-5 Filed:02/03/23 Entered:02/03/23 17:03:03 Desc:

Exhibit Page 9 of 12
Share of Wallet Analysis | AHG of PREPA Bondholders and Monolines | December 13, 2022 | ATTORNEY WORK PRODUCT – PRIVILEGED AND CONFIDENTIAL – SUBJECT TO MEDIATION PRIVILEGE 2

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040

Bondholder Proposal FOMB Proposal No Debt Service McKinsey SOW Threshold

SOW Projection for the Unsubsidized Households in the 10-20k Income Cohort 

PRELIMINARY DRAFT 12/13/2022 Case:17-03283-LTS Doc#:23481-5 Filed:02/03/23 Entered:02/03/23 17:03:03 Desc:

Exhibit Page 10 of 12
Share of Wallet Analysis | AHG of PREPA Bondholders and Monolines | December 13, 2022 | ATTORNEY WORK PRODUCT – PRIVILEGED AND CONFIDENTIAL – SUBJECT TO MEDIATION PRIVILEGE 3

2024 2025 2026 2027 2028 ... 2040

Under FOMB Proposal $11.4 M $2.8 M $0.0 M $0.0 M $0.0 M ... $0.0 M

Under Bondholders Proposal $11.4 M $3.5 M $0.0 M $2.3 M $0.0 M ... $0.0 M

Under No Debt Service Charge $0.0 M $0.0 M $0.0 M $0.0 M $0.0 M ... $0.0 M

Incremental difference between 

FOMB and Bondholders Proposals $0.0 M $0.8 M $0.0 M $2.3 M $0.0 M ... $0.0 M

Note: 

The total subsidy under each proposal is calculated as the amount per year required to bring the median unsubsidized household with annual income between $10k-

$20k to a 6% SOW, multiplied by the total number of unsubsidized households within the same income cohort.

Sources:

[1] U.S. Census Bureau, 2021 Puerto Rico Community Survey.

[2] PREPA 2022 Fiscal Plan.

[3] Residential Customers_vSHARED.xlsx

Total Subsidy Needed to Bring the SOW to 6% for the Median Unsubsidized Household 

Earning $10k-$20k Annual Income

PRELIMINARY DRAFT 12/13/2022 Case:17-03283-LTS Doc#:23481-5 Filed:02/03/23 Entered:02/03/23 17:03:03 Desc:

Exhibit Page 11 of 12
Share of Wallet Analysis | AHG of PREPA Bondholders and Monolines | December 13, 2022 | ATTORNEY WORK PRODUCT – PRIVILEGED AND CONFIDENTIAL – SUBJECT TO MEDIATION PRIVILEGE 4

Electricity Consumption Distribution of the Unsubsidized Group within the 10-20k Income Cohort

Median = 292 kWh

PRELIMINARY DRAFT 12/13/2022 Case:17-03283-LTS Doc#:23481-5 Filed:02/03/23 Entered:02/03/23 17:03:03 Desc:

Exhibit Page 12 of 12