UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

 

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO, 

as representative of 

THE COMMONWEALTH OF PUERTO RICO, et al., 

Debtors

 

PROMESA

Title III

Case No. 17 BK 3283-LTS

In re: 

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO, 

as representative of 

PUERTO RICO ELECTRIC POWER AUTHORITY, 

Debtor

PROMESA 

Title III 

Case No. 17 BK 4780-LTS

PV PROPERTIES, INC.’S OBJECTION TO DISCLOSURE STATEMENT

TO THE HONORABLE COURT: 

COMES NOW PV Properties, Inc. (“PV Properties”), through its undersigned counsel, 

and respectfully states and requests: 

1. On December 16, 2022, the Financial Oversight and Management Board (the 

“Oversight Board”) as representative of Puerto Rico Power Authority (“PREPA”) filed its plan of 

adjustment (the “Plan”) and its Disclosure Statement in the captioned case [ECF No. 23097]. 

2. The Court granted creditors and parties in interest until February 3, 2023 at 5:00 

p.m. (AST) to file objections to the approval of the adequacy of the Disclosure Statement [ECF 

No. 23159]. 

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3. It is PV Properties’ position that the Disclosure Statement is defective as it doesn’t 

properly address Puerto Rico’s public policy regarding energy and the environmental attributes 

associated with the generation of electricity utilizing renewable energy as established by the 

following legislation: 

Act No. 114-2007 “Puerto Rico Net Metering Program Act”

Act No. 82-2010 “Public Policy on Energy Diversification by Means of Sustainable and 

Alternative Renewable Energy in Puerto Rico Act”

Act No. 83-2010 “Green Energy Incentive Act of Puerto Rico”

Act No. 57-2014 “The Puerto Rico Energy Transformation and Relief Act”

Act No. 17-2019 “Puerto Rico Energy Public Policy Act”

4. Since 2015, PREPA has refused to purchase from distributed generation Prosumers 

the Renewable Energy Credits (“RECs”) generated and self-consumed and the RECs generated 

and exported to the Grid. 

5. What follows are two tables reflecting the RECs generated by Distributed 

Generator Prosumers and those generated by PV Properties: 

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6. PV Properties’ claim against PREPA as of December 31, 2022 is for 

$5,314,763.00 for PREPA’s refusal to purchase the RECs generated by PV Properties. 

7. PV Properties sustains that the Disclosure Statement should be amended to include 

the following definitions in order for it to comply with the adequate information requirements of 

11 U.S.C. § 1125(a), made applicable to PREPA’s Title III proceedings by PROMESA Section 

301, 48 U.S.C. § 2104: 

Net Meter – Means a tool used to measure and register the two-way flow of power (bidirectional), 

that is, supplied and received energy in kilowatt-hour by a customer who has a distributed 

generation system interconnected to the power grid of PREPA. 

Net Metering Contracts – Any customer that, on the date in which the Bureau issues its final 

determination, has a net metering contract or has notified the Bureau about the certification of the 

distributed generator. In such cases, the Net Meter customer shall have the right to the rate or 

compensation mechanism in effect at the time for a term of not less than twenty (20) years as of 

the execution of the net metering contract. 

Grandfather Customers – Means Prosumers with Net Metering Contracts in effect as of the date 

of approval of the Energy Public Policy Act. To whom – Pursuant to the Authority or transmission 

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and distribution network Contractor shall honor Net Metering Contracts in effect as of the date of 

approval of this Act in accordance with the agreed-upon terms. 

Renewable Portfolio Standard, “RPS”- Means the mandatory percentage of sustainable 

renewable energy or alternative renewable energy required from each retail electricity supplier as 

established. 

Renewable Energy Credits, “REC” – Means a personal property that constitutes a tradeable and 

negotiable asset or commodity that may be purchased, sold, assigned, and transferred between 

persons for any lawful purpose which is integrally and inseparable equal to one (1) megawatt-hour 

(MWh) of electricity generated from a sustainable renewable energy source in Puerto Rico issued 

and registered pursuant to Act 82-2010 and, in turn, represents all environmental and social 

attributes, as defined in this Act.

RECs Self-Consumed – Means a REC that is generated from a renewable energy source and 

consumed behind the meter. 

RECs Exported to the Grid – Means a REC that is generated from a renewable energy source 

and is exported to the grid under a Net Metering Contract.

Renewable Energy Registry – Means the North American Renewable Registry (NAR), which 

administers a Web-based platform to issue serialized Renewable Energy Certificates (RECs), for 

sustainable renewable energy and alternative renewable energy sources where registered may 

create and manage their individual accounts, and qualifying and transferring RECs, or any other 

registry established or authorized by the Commission for accounting and transferring RECs in 

Puerto Rico. 

Prosumer – Means any users or customers of the Electrical System who have the capacity to 

generate electric power for self-consumption that, in turn, have the capacity to supply any energy 

surplus through the electric power grid. 

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8. Furthermore, PV Properties sustains that what follows should also be included in 

the Disclosure Statement as part of the adequate information required by Section 1125(a): 

Act 17 of 2019 mandates that after 2014, the rate applicable to Net Meter 

customers, including the rate or mechanisms through which customers shall be 

compensated for the energy they supply to the electric power grid, shall be determines 

exclusively by the Puerto Rico Energy Bureau (“PREB”) as part of the electric power 

service rate review process provided in Act No. 57-2014, or through a separate 

administrative process when deemed necessary or convenient. 

To attest compliance with Section 2.3(e) of Act 17-2019, the Puerto Rico Public 

Policy Act, the renewable energy generated by Prosumers shall be measured and access 

provided to public to the Registry of Renewable Energy Certificates. 

PREPA has to comply with the Renewable Portfolio Standard (“RPS”) by filing 

with the PREB the RECs acquired thereby. 

The Renewable Energy Policy Act mandates, among other things, that retail 

electricity suppliers in Puerto Rico, like PREPA, comply with a RPS that requires that 

specified percentages of their energy production must come from renewable energy 

sources, escalating to twenty percent (20%) by 2022, subject to important qualifications. 

Act 82-2010, 22 L.P.R.A. § 8124.

PREPA has not purchased RECs from any Distributed Generator. 

In October 2021, PREB issued a draft regulation for comments, which has not 

progressed since that time (NEPR-MI-2021-0011). 

9. In view of the above, the following should follow: 

a. That the minimum value of the RECs will be the result of the multiplication of the 

market cost of a metric ton of CO2e by the CO2e emission factor of the electricity 

generators that use fossil fuels; 

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b. That non-compliance with their purchase is subject to a penalty equal to double the 

minimum value; and 

c. That ownership of the RECs belongs to the REC generator until it is legally 

transferred. 

10. Prosumers with Net Metering Contracts generate RECs Self-Consumed and RECs 

Exported to the Grid. PREPA’s revenue grade meters register the RECs Exported to the Grid. The 

Prosumer inverter and meter register both the RECs Self-Consumed and the RECs Exported to the 

Grid. Act 82-2010 as amended gives tittle to both types of RECs to the generator, therefore the 

RECs Exported to the Grid included in PREPA’s RPS compliance reports must be purchased from 

the Prosumer. 

11. In summary, the Disclosure Statement is not based, nor does it recognize the legal 

framework within which PREPA must operate. 

WHEREFORE, it is respectfully requested that PREPA be directed to amend its 

disclosure statement as indicated above.

CERTIFICATE OF SERVICE: We hereby certify that on this same date we 

electronically filed the foregoing with the Clerk of the Court using the CM/ECF system, which 

will send notification of such filing to all CM/ECF participants. 

San Juan, Puerto Rico this 26th day of January 2023

s/Fernando E. Agrait 

USDC-PR 127212

701 Avenida Ponce de León

Edificio Centro de Seguros 

Oficina 414

San Juan, Puerto Rico 00907

Tel. 787-725-3390/3391

Fax: 787-724-0353

E-mail: agraitfe@agraitlawpr.com

s/Charles A. Cuprill-Hernandez

USDC-PR 114312

Charles A. Cuprill, P.S.C., Law Offices

356 Fortaleza Street - Second Floor

San Juan, PR 00901

Tel.: 787-977-0515

Fax: 787-977-0518

E-mail: cacuprill@cuprill.com

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