Objections Due: February 28, 2023 at 4:00 p.m. (AST)

Hearing Date: March 15, 2023 at 9:30 a.m. (AST)

UNITED STATES DISTRICT COURT

DISTRICT OF PUERTO RICO

In re:

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO,

as representative of 

THE COMMONWEALTH OF PUERTO RICO, et al.,

Debtors. 1

PROMESA

Title III

No. 17 BK 3283-LTS

(Jointly Administered)

In re:

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO,

as representative of 

PUERTO RICO ELECTRIC POWER AUTHORITY, 

Debtor.

PROMESA

Title III

No. 17 BK 4780-LTS

This Motion relates to PREPA 

and shall be filed in Lead Case 

No. 17 BK 3283-LTS and Case 

No. 17 BK 4780-LTS.

PREPA’S MOTION FOR ENTRY OF ORDER ALLOWING ADMINISTRATIVE 

EXPENSE CLAIM FOR COMPENSATION FOR MOBILIZATION SERVICES 

UNDER THE PUERTO RICO THERMAL GENERATION FACILITIES 

OPERATION AND MANAGEMENT AGREEMENT

1 The Debtors in these Title III Cases, along with each Debtor’s respective Title III case number and the last four (4) 

digits of each Debtor’s federal tax identification number, as applicable, are the (i) Commonwealth of Puerto Rico 

(“Commonwealth”) (Bankruptcy Case No. 17-BK-3283- LTS) (Last Four Digits of Federal Tax ID: 3481); (ii) Puerto 

Rico Sales Tax Financing Corporation (“COFINA”) (Bankruptcy Case No. 17-BK-3284-LTS) (Last Four Digits of 

Federal Tax ID: 8474); (iii) Puerto Rico Highways and Transportation Authority (“HTA”) (Bankruptcy Case No. 17-

BK-3567-LTS) (Last Four Digits of Federal Tax ID: 3808); (iv) Employees Retirement System of the Government 

of the Commonwealth of Puerto Rico (“ERS”) (Bankruptcy Case No. 17-BK-3566-LTS) (Last Four Digits of Federal 

Tax ID: 9686); (v) Puerto Rico Electric Power Authority (“PREPA”) (Bankruptcy Case No. 17- BK-4780-LTS) (Last 

Four Digits of Federal Tax ID: 3747); and (vi) Puerto Rico Public Buildings Authority (“PBA”) (Bankruptcy Case 

No. 19-BK-5523-LTS) (Last Four Digits of Federal Tax ID: 3801) (Title III case numbers are listed as Bankruptcy 

Case numbers due to software limitations).

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TABLE OF CONTENTS

PRELIMINARY STATEMENT .................................................................................................... 2

JURISDICTION AND VENUE ..................................................................................................... 4

BACKGROUND ............................................................................................................................ 5

A. PREPA Operations and Management................................................................................. 5

B. Overview of the PREPA Transformation Process.............................................................. 7

C. The Generation Contract Selection Process........................................................................ 8

D. The Contract Approval Process.......................................................................................... 9

E. Genera’s Services under the Generation Contract.............................................................. 9

F. Mobilization Period .......................................................................................................... 11

RELIEF REQUESTED................................................................................................................. 13

BASIS FOR RELIEF.................................................................................................................... 14

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TABLE OF AUTHORITIES

Page(s)

CASES

In re 1701 Commerce, LLC,

No. 12-41748-DML-11, 2014 WL 4657314 (Bankr. N.D. Tex. Sept. 17, 2014)............................16

In re Craig Cnty. Hosp. Auth.,

572 B.R. 340 (Bankr. N.D. Okla. 2017)..........................................................................................15

Woburn Assocs. v. Kahn (In re Hemingway Transp., Inc.),

954 F.2d 1 (1st Cir. 1992)................................................................................................................15

STATUTES

11 U.S.C. § 503(b)(1)(A).....................................................................................................................14

48 U.S.C. § 2161(c)(5).........................................................................................................................14

48 U.S.C. §§ 2101–2241........................................................................................................................1

OTHER AUTHORITIES

2022 Certified Fiscal Plan for the Puerto Rico Electric Power Authority

(June 28, 2022), 

https://drive.google.com/file/d/1f6VCpY8sWmshvshWLNlJn52LFAvLABgk/view. ...............2, 17

Cent. Off. for Recovery, Reconstruction & Resiliency,

https://recovery.pr.gov/es ..................................................................................................................6

Contract Review, Fin. Oversight & Mgmt. Bd. for P.R.,

https://oversightboard.pr.gov/contract-review/ (last visited Mar. 5, 2021).......................................9

Financial Oversight and Management Board for Puerto Rico, Statement (Jan. 25, 2023),

https://drive.google.com/file/d/1KRT24fMrkPW5z-c7mtEjKtPE5Ic9xoT_/view............................9

Puerto Rico One Year after Hurricanes Irma and María,

Federal Emergency Management Agency (Sept. 6, 2018), https://www.fema.gov/zh-hans/newsrelease/20200220/puerto-rico-un-ano-de-los-huracanes-irma-y-maria .............................................6

Suzanne Gamboa, Puerto Rico to Privatize its Hobbled Electric Power Company, 

NBC News (Jan. 22, 2018), https://www.nbcnews.com/news/latino/puerto-rico-privatize-itspublic-electric-power-company-n840051..........................................................................................6

Transformation and Innovation in the Wake of Devastation, an Economic and Disaster Recovery 

Plan for Puerto Rico

(Aug. 8, 2018), https://reliefweb.int/sites/reliefweb.int/files/resources/pr-transformationinnovation-plan-congressional-submission-080818_0.pdf................................................................6

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To the Honorable United States District Court Judge Laura Taylor Swain:

The Puerto Rico Electric Power Authority (“PREPA”), by and through the Financial 

Oversight and Management Board for Puerto Rico, as PREPA’s Title III representative (the 

“Oversight Board”) pursuant to section 315(b) of the Puerto Rico Oversight, Management, and 

Economic Stability Act (“PROMESA”),1and the Puerto Rico Fiscal Agency and Financial 

Advisory Authority (“AAFAF,” and, collectively, with PREPA and the Oversight Board, the 

“Government Parties”), respectfully submit this joint motion (the “Motion”), pursuant to sections 

105(a), 503, and 507(a)(2) of title 11 of the United States Code (the “Bankruptcy Code”), made 

applicable in this case pursuant to PROMESA section 301(a), for an order (the “Proposed Order”), 

substantially in the form attached hereto as Exhibit A: (a) allowing an administrative expense 

claim in favor of Genera PR LLC (“Genera”) for any accrued and unpaid amounts required to be 

paid by PREPA during the Mobilization Period (defined below) under the Puerto Rico Thermal 

Generation Facilities Operation and Maintenance Agreement, dated January 24, 2023, entered 

into by and among PREPA, the Puerto Rico Public-Private Partnerships Authority (the “P3 

Authority”), and Genera (the “Generation Contract”), a copy of which is attached as Exhibit B to 

the Declaration of Omar J. Marrero in Support of PREPA’s Motion for Entry of Order Allowing 

Administrative Expense Claim for Compensation for Services under Puerto Rico Thermal 

Generation Facilities Operation and Management Agreement (the “Marrero Declaration” or 

“Marrero Decl.”) filed contemporaneously herewith; and (b) providing additional relief required 

to effectuate the foregoing. In support of this Motion, the Government Parties respectfully state as 

follows:

1 PROMESA is codified at 48 U.S.C. §§ 2101–2241.

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PRELIMINARY STATEMENT

1. The complete transformation of Puerto Rico’s energy system is necessary to deliver 

the safe, reliable, and affordable energy service the people and businesses of Puerto Rico deserve.2 

Transitioning operation of PREPA’s aging and outdated base-load generation plants and gas 

turbine peaking plants (collectively, the “Legacy Generation Assets”) to a private operator is a key 

pillar of that transformation. To that end, through a competitive bidding process, the Government 

of Puerto Rico has awarded a contract for the management, operation, maintenance, management 

of fuel supply, and decommissioning, where applicable, of the Legacy Generation Assets to 

Genera—an entity formed by its experienced and highly qualified ultimate parent company, New 

Fortress Energy Inc. (“NFE”). Genera is equipped to stabilize and optimize the operations of 

Puerto Rico’s Legacy Generation Assets until replacement renewable and distributed energy 

generation is installed and the Legacy Generation Assets are decommissioned—ushering in both 

a clean and resilient energy future for the people of Puerto Rico.

2. Under the Generation Contract, Genera will ultimately assume responsibility for 

the Legacy Generation Assets, including operating the Legacy Generation Assets efficiently, 

reliably, and safely until decommissioning such assets—paving the path for the integration of 

renewable generation sources. 

3. While PREPA intends to satisfy its obligations under the Generation Contract on a 

timely basis and in the ordinary course, the Government Parties seek an order granting to Genera 

an allowed administrative expense claim for any accrued, due, and unpaid obligations PREPA 

2 See Puerto Rico Electric Power System Transformation Act, Act No. 120-2018, Statement of Motives; 2022 Certified 

Fiscal Plan for the Puerto Rico Electric Power Authority (June 28, 2022), https://drive.google.com/file/

d/1f6VCpY8sWmshvshWLNlJn52LFAvLABgk/view (hereinafter “2022 Fiscal Plan”); see also Puerto Rico Energy 

Public Policy Act, Act 17-2019 (requiring the unbundling of the electric system through the transfer of operation and 

maintenance responsibilities of PREPA’s transmission, distribution, and generation assets to private operators).

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incurs to Genera under the Generation Contract during the initial 22-week period commencing 

upon execution of the Generation Contract (the “Mobilization Period”). The Generation Contract 

requires payment of such obligations, including the Mobilization Service Fee3(defined below),

during the Mobilization Period (collectively, the “Mobilization Obligations”) in exchange for 

Genera’s performance of various services required to allow Genera to assume control over the 

operation and maintenance of the Legacy Generation Assets. Additionally, the Generation 

Contract requires that PREPA seek Title III Court approval for administrative expense treatment 

for the Mobilization Obligations. Without these services, PREPA and its stakeholders cannot 

realize the benefits of the Generation Contract, which is a key component in PREPA’s ongoing 

transformation. 

4. Pursuant to the Generation Contract, Genera will transform the Legacy Generation 

Assets through a two-phase process: first, Genera will complete certain services during an initial 

22-week period, which will allow for the smooth and efficient transition of operation and 

maintenance from PREPA to Genera (the “Mobilization Services”); second, Genera will perform 

various services over the life of the contract, subject to mutually agreed-upon extensions of the 

term of the contract, to operate, maintain, manage, and, if necessary, decommission the Legacy 

Generation Assets (the “O&M Services,” and together with the Mobilization Services, the 

“Generation Services”). Through this process, Genera will help to usher in a new era of reliable, 

safe, and clean energy for Puerto Rico.

5. The Generation Contract is another critical step in transforming Puerto Rico’s 

energy sector and modernizing its Legacy Generation Assets. A more efficient and cost-effective 

3 Capitalized terms not otherwise defined herein shall have the meanings given to them in the Generation Contract or 

the Partnership Committee Report.

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PREPA will not only be important for Puerto Rico’s macro-economic stability, but will also 

support PREPA’s restructuring and exit from Title III. By incurring the Mobilization Obligations, 

PREPA is able to obtain the substantial benefits of the Generation Contract. In addition, as stated, 

the Mobilization Services confer additional benefits to PREPA beyond the mere transition of 

operations, including identifying and implementing cost-savings measures, improving the fuel 

supply chain, and health, safety, and environmental compliance.4 Further, Genera has identified 

several opportunities that will benefit PREPA early in the contract term, including reviewing and 

executing emergency response drills and plans, optimizing existing fuel contracts, achieving better 

risk and credit terms on existing oil contracts, and making operational changes to increase fuel 

efficiency.5

6. For these reasons, and as explained more fully below, the Government Parties 

respectfully request that this Court enter an order, substantially in the form of Exhibit A, allowing 

an administrative expense claim in favor of Genera for any present and future accrued Mobilization 

Obligations.

JURISDICTION AND VENUE

7. The United States District Court for the District of Puerto Rico (the “Court”) has 

subject matter jurisdiction over this Motion pursuant to PROMESA section 306(a).

8. Venue is proper in this district pursuant to PROMESA section 307(a).

9. The statutory predicates for the relief sought herein are sections 105(a), 503, and 

507(a)(2) of the Bankruptcy Code, made applicable to this contested matter by PROMESA section 

301(a).

4 See Marrero Decl. ¶¶ 6, 9–10; id., Ex. B, Generation Contract, Annex VII.

5

Id. ¶¶ 8, 12.

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BACKGROUND6

10. On July 2, 2017 (the “Petition Date”), the Oversight Board filed a voluntary petition 

for relief for PREPA pursuant to section 304(a) of PROMESA, commencing a case under Title III 

thereof (the “Title III Case”).

11. PROMESA section 301(a) incorporates sections 105(a), 503, and 507(a)(2) of the 

Bankruptcy Code, which provide for the allowance of administrative expenses granted priority 

over other unsecured claims in a Title III case. PROMESA section 314(b)(4) further provides that 

unpaid allowed administrative expenses are required to be paid upon the effective date of a plan 

of adjustment unless the claimholder agrees to different treatment. 

A. PREPA Operations and Management

12. Throughout its history, PREPA has operated as a government instrumentality and 

vertically integrated monopoly. Since 1981, PREPA has been the sole energy-distribution service 

provider in Puerto Rico. PREPA currently serves approximately 1,500,000 customers (91% 

residential, 8% commercial, and <1% industrial).7 PREPA serves its clients through an extensive 

transmission and distribution system with approximately 2,600 miles of transmission and subtransmission lines (230 kV/115 kV/38 kV), over 17,000 miles of primary voltage distribution lines 

(13kV, 8kV, 4kV), and over 300 utility-owned substations.8 Electricity is supplied by PREPA6 The Government Parties are only seeking allowance of an administrative expense claim for the Mobilization 

Obligations, not approval of the Generation Contract from the Title III Court as no such approval is required under 

PROMESA. The process through which Genera was selected as the winning bidder and information regarding 

approval of the Generation Contract by the Oversight Board, the P3 Authority, PREPA, PREB, and the Government 

of Puerto Rico pursuant to Puerto Rico law are set forth herein to provide the Court with background information 

only. A more detailed recitation of the process is available in the “Partnership Committee Report” attached as 

Exhibit A to the Marrero Declaration. 

7 2022 Fiscal Plan § 2.6.

8

Id. § 2.4.

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owned generation plants and also procured from independent power producers under power 

purchase agreements.9

13. For decades, PREPA has faced operational, strategic, and financial challenges.10 In 

addition, Puerto Rico suffered catastrophic damage from Hurricane Irma and Hurricane Maria, 

which hit the Island within weeks of each other in 2017. The effects of the hurricanes left Puerto 

Rico’s infrastructure, including energy systems, in critical need of recovery.11 These challenges 

have resulted in inefficient and unreliable power service prone to frequent blackouts, negatively 

impacting PREPA, its customers, the environment, and Puerto Rico. 

14. Recognizing these issues, the Government of Puerto Rico and the Oversight Board 

have long been aligned in their determination that a complete transformation of both the grid assets 

and the Legacy Generation Assets is required to bring safe, reliable, and modern generation 

services to Puerto Rico and to move Puerto Rico’s electric system and broader economy forward.12

On January 22, 2018, consistent with the then certified fiscal plan for PREPA, then Governor 

Rosselló announced plans for the transformation of Puerto Rico’s electric power system into one 

that is modern, sustainable, reliable, efficient, cost-effective, and more resilient to the ravages of 

nature.13

9

Id. § 2.5.

10 Marrero Decl. ¶ 5.

11 See 2022 Fiscal Plan at 17; Cent. Off. for Recovery, Reconstruction & Resiliency, https://recovery.pr.gov/en (last 

visited Feb. 6, 2023); Cent. Off. for Recovery, Reconstruction & Resiliency, Transformation and Innovation in the 

Wake of Devastation, an Economic and Disaster Recovery Plan for Puerto Rico (Aug. 8, 2018),

https://reliefweb.int/sites/reliefweb.int/files/resources/pr-transformation-innovation-plan-congressional-submission080818_0.pdf; Puerto Rico One Year after Hurricanes Irma and María, Federal Emergency Management Agency

(Sept. 6, 2018), https://www.fema.gov/press-release/20210318/puerto-rico-one-year-after-hurricanes-irma-andmaria.

12 See Marrero Decl. ¶ 6; 2022 Fiscal Plan § 3.1.

13 Suzanne Gamboa, Puerto Rico to Privatize its Hobbled Electric Power Company, NBC News (Jan. 22, 2018), 

https://www.nbcnews.com/news/latino/puerto-rico-privatize-its-public-electric-power-company-n840051.

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B. Overview of the PREPA Transformation Process

15. In furtherance of these transformation plans, on June 21, 2018, the Government of 

Puerto Rico enacted Act No. 120-2018 (“Act 120”), also known as the Puerto Rico Electric Power 

System Transformation Act. Act 120 establishes the legal framework for the sale, disposition, or 

transfer of the assets, operations, functions, and services of PREPA. 

16. Act 120 further designates the P3 Authority as the government entity responsible 

for the functions, services, and facilities of public-private partnerships in the electric sector.14 In 

accordance with Act 120, the P3 Authority established a committee (the “Partnership Committee”)

to evaluate and select qualified bidders and to negotiate the terms and conditions of any publicprivate partnerships in the electric sector.15

17. On June 5, 2018, the P3 Authority launched a procurement process under applicable 

law to award a long-term contract to a qualified operation and maintenance service provider for 

the transmission and distribution system (“T&D System”). After bidders performed due diligence 

and evaluated the opportunity to serve as Puerto Rico’s T&D System operator, the Partnership 

Committee selected LUMA Energy as the preferred proponent to engage in exclusive discussions.

18. Ultimately, on June 22, 2020, the T&D Contract16 was executed following requisite 

approvals. LUMA Energy assumed control of the T&D System operations on June 1, 2021 under 

the supplemental terms of the T&D Contract. Under the T&D Contract, PREPA continues to own 

the assets of its T&D System, and LUMA Energy acts as PREPA’s agent in operating and 

14 See Act 120-2018 § 5(a).

15 See id. § 5(c); see also Marrero Decl. ¶ 7; Marrero Decl., Ex. A at 33–34.

16 The “T&D Contract” shall refer to the Puerto Rico Transmission and Distribution System Operation and Maintenance 

Agreement, dated as of June 22, 2020, by and among the Puerto Rico Electric Power Authority, as Owner, the Puerto 

Rico Public-Private Partnerships Authority, as Administrator, LUMA, LCC as Management Co, and LUMA Servco, 

LLC as ServCo, as supplemented and amended. A copy of the T&D Contract can be found on PREPA’s docket at 

ECF No. 2053-4.

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maintaining the T&D System. The T&D Contract has a term of 15 years from “Service 

Commencement,”17 during which time LUMA Energy will continue to provide the services 

contemplated under the T&D Contract. 

19. Similarly, pursuant to Act 120, in August 2020, the P3 Authority, working in 

collaboration with the Oversight Board, launched a competitive process to award a long-term 

contract to a qualified operation and maintenance (“O&M”) service provider for the Legacy 

Generation Assets.18

C. The Generation Contract Selection Process

20. On August 10, 2020, the P3 Authority issued the Request for Qualifications (the 

“RFQ”) pursuant to Sections 3 of Act 29 and 5 of Act 120. The RFQ sought statements of 

qualification from companies and consortia interested in managing and operating Puerto Rico’s 

Legacy Generation Assets. After the RFQ process concluded, on October 22, 2020, the Partnership 

Committee selected eight (8) experienced and reputable respondents to participate in the next stage 

of the process.19

21. The P3 Authority then initiated the Request for Proposals (“RFP”) process—a 

robust, competitive, and transparent procurement process carried out in accordance with Act 120 

and its corresponding regulations—that concluded on June 10, 2022.20 Through that process, the 

Partnership Committee selected Genera as the preferred proponent with which to negotiate a final 

agreement. 

17 As defined in the T&D Contract. PREPA expects the Service Commencement Date to occur upon the effective date 

of a plan of adjustment for PREPA.

18 Marrero Decl. ¶ 7; Marrero Decl., Ex. A at 36–54.

19 Marrero Decl., Ex. A, at 36–40. 

20 See id., Ex. A at 41–72.

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D. The Contract Approval Process

22. Pursuant to PROMESA and applicable Puerto Rico law, the Generation Contract—

negotiated and approved by the Partnership Committee—was subject to further approval by (i) the 

P3 Authority’s Board of Directors, (ii) PREPA’s Governing Board, (iii) the Oversight Board, (iv) 

Puerto Rico Energy Bureau (“PREB”)—PREPA’s independent regulator—and (v) the 

Government of Puerto Rico pursuant to the procedures set forth in Act 29. 

23. Pursuant to, among others, PROMESA section 204(b)(2) (the “Contract Review 

Policy”),21 and in accordance with PREPA’s Fiscal Plan, the Oversight Board reviewed the form 

Generation Contract with the P3 Authority and, together with the Government of Puerto Rico, 

approved the updated Generation Contract.22 On November 17, 2022, the P3 Authority filed the 

final Generation Contract with the PREB for regulatory approval. After receipt of all required 

approvals, the parties signed the Generation Contract on January 24, 2023 and the process 

immediately shifted to the Mobilization Period (as described below) to begin transitioning the 

generation facilities’ functions to Genera.

E. Genera’s Services under the Generation Contract

24. Pursuant to the Generation Contract, Genera will perform the O&M Services, 

which include assuming responsibility for the management, operation, maintenance, repair, 

restoration, and replacement and other related services for the Legacy Generation Assets. These 

services include fuel and efficiency optimization approved by PREB, asset management, 

21 Contract Review, Fin. Oversight & Mgmt. Bd. for P.R., https://oversightboard.pr.gov/contract-review/ (last visited 

Feb. 6, 2023).

22 Financial Oversight and Management Board for Puerto Rico, Statement (Jan. 25, 2023), 

https://drive.google.com/file/d/1KRT24fMrkPW5z-c7mtEjKtPE5Ic9xoT_/view.

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community and media relations, finance and accounting, testing and reporting, emergency 

response, and public and employee health and safety.23

25. In addition to the day-to-day operations and maintenance functions, as part of the 

O&M Services, Genera will play an integral role in executing PREPA’s modernization goals, as 

well as actively participating and assisting in the deployment of federal funding for energy 

generation reconstruction.24 Delivering major generation modernization capital projects on time 

and on budget is important to protect Puerto Rico from future devastation from hurricanes and 

other natural disasters. No less critical, the O&M Services will also help improve everyday 

efficiency, safety, and reliability, and benefit PREPA and its customers by putting PREPA’s 

generation on a path to becoming a more modern, sustainable, reliable, efficient, cost-effective, 

and resilient power generation system.25

26. Consistent with the foregoing, the Government Parties intend and expect the 

Generation Contract to help:

a. Transform PREPA’s generation into modern, sustainable, reliable, efficient, costeffective, and resilient power generation facilities with technologically and 

operationally prudent practices in order to improve and increase power generation;

b. Deliver cost-effective power generation to the transmission and distribution 

system;

c. Increase resiliency, achieving performance in line with codes, specifications, and 

standards consistent with U.S. mainland power generation facilities;

d. Increase generation reliability; and

e. Implement industry best practices and operational excellence through managerial 

continuity and long-term planning.26

23 Marrero Decl., Ex. B., Generation Contract § 5.1, Annex IX.

24 See id. § 5.8.

25 See Marrero Decl., Ex. A. at 64.

26 Marrero Decl. ¶ 6; Marrero Decl., Ex. A at 23–30.

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27. Pursuant to the Generation Contract, PREPA will be responsible for certain accrued 

and unpaid fixed and variable fees for the O&M Services.

27 Such fees will be paid in the ordinary 

course and are not the subject of this Motion. As detailed below, the Motion seeks only limited 

relief and it does not request the Court to approve the Generation Contract or to provide authority 

to enter into the Generation Contract.

F. Mobilization Period

28. Prior to assuming full operational control over PREPA and commencing the O&M

Services, the Generation Contract contemplates a Mobilization Period to ensure an orderly 

transition of the responsibility for the management, operation, maintenance, repairs, restoration, 

and replacement of the Legacy Generation Assets. During the Mobilization Period, Genera is 

responsible for extensive Mobilization Services, including (i) planning and implementing

information technology systems and tools; (ii) reviewing applicable permits and compliance 

obligations; (iii) developing plans/procedures for various aspects of operation (including a 

Procurement Manual, Legacy Generation Emergency Response Plan, O&M Procedures, and 

Operator Training Programs); (iv) developing a communication plan; (v) evaluating and 

maintaining inventory; (vi) planning for and achieving key milestones; and (vii) developing a fuel 

savings strategy, among other things. A plan describing these services in greater detail is set forth 

in Annex VII of the Generation Contract. These services are an essential prerequisite to Genera’s 

ability to assume full control over the operation and maintenance of the Legacy Generation Assets 

and PREPA gaining the full benefits the Government Parties expect to achieve under the 

Generation Contract. These services, in addition to others provided by Genera during the 

27 Marrero Decl., Ex. B, Generation Contract, §§ 16.2, 17.3, 19.2; Marrero Decl., Ex. B, Generation Contract, Annex II, 

XIV.

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Mobilization Period, lay the foundation for Genera to be able to perform the O&M Services in 

compliance with the Generation Contract and public policy.28

29. As part of the Mobilization Services, Genera plans to ensure an optimal and timely 

transition of operation and management services from PREPA to Genera. Genera will update the 

P3 Authority and PREB with the status of the Mobilization Services on a bi-weekly basis.29 

30. The Generation Contract provides for payment by PREPA of the Mobilization 

Obligations, which include the Mobilization Service Fee, to Genera.30 The Mobilization Service 

Fee consists of (i) the hourly fully allocated cost rate for each category of employee providing 

Mobilization Services, multiplied by the number of hours worked by each employee in such 

category providing Mobilization Services, plus (ii) all other reasonably necessary and documented 

costs and expenses incurred by Genera in the course of providing the Mobilization Services and 

satisfying the “Service Commencement Date Conditions” under the Generation Contract, 

including the cost of any subcontractors or consultants providing Mobilization Services.31

31. The parties executed the Generation Contract on January 24, 2023, which 

commenced the Mobilization Period. The Mobilization Period will last approximately 22 weeks 

and the aggregate amount of the Mobilization Service Fee will not exceed $15 million.32 Pursuant 

to Section 4.6(c) of the Generation Contract, PREPA is obligated to fund 4.5 months of the 

Mobilization Service Fee in advance into a designated account upon the execution of the 

28 See Marrero Decl., Ex. B., Generation Contract, Annex IX.

29 Marrero Decl., Ex. B, Generation Contract § 4.2(i).

30 Id. § 4.6(a).

31 Marrero Decl., Ex. B, Generation Contract § 4.6(b).

32 Id. § 4.6(b), Annex VII.

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agreement. PREPA is required to replenish this account on a monthly basis to maintain the 4.5 

month estimated balance throughout the Mobilization Period. 

32. Section 4.1(c)(i) of the Generation Contract provides that “[n]o later than ten (10) 

Business Days after the [contract is executed, PREPA] shall file a motion with the Title III Court 

seeking administrative expense treatment for any accrued and unpaid amounts required to be paid 

by [PREPA] under [the Generation Contract] during the Mobilization Period, including the 

Mobilization Service Fee.”33 Pursuant to Section 4.1(c)(ii), Genera may terminate the generation 

Contract upon 30 days’ prior written notice if such motion is not granted within 90 days after 

filing, subject to a 45-day extension by the P3 Authority, or such later date as Genera and the P3 

Authority agree.

33. The Mobilization Obligations required to be paid by PREPA to Genera during the 

Mobilization Period under the Generation Contract are the only obligations that are the subject of 

this Motion. 34

RELIEF REQUESTED

34. By this Motion, the Government Parties seek entry of an order allowing an 

administrative expense claim in favor of Genera in the amount of any accrued and unpaid 

Mobilization Obligations in favor of Genera from time to time under the Generation Contract

33 Marrero Decl., Ex. B, Generation Contract § 4.1(c)(i).

34 For the avoidance of doubt PREPA is not requesting that the Court approve an administrative expense for the interest 

component of the Mobilization Obligations at this time. See Mem. Op. Granting in Part and Denying in Part PREPA’s 

Mot. for Entry of an Order Allowing Administrative Expense Claim for Compensation for Front-End Transition 

Services Under the Puerto Rico Transmission and Distribution System Operation and Maintenance Agreement with 

LUMA Energy 21, Case No. 17-04780, (D.P.R. Oct. 19, 2020), ECF No. 2258 (denying, without prejudice, 

administrative expense claims for “amounts that might become due under . . . the T&D Contract as a result of PREPA's 

untimely payment of any Front-End Transition Obligations.”) (hereinafter, the “Front-End Administrative Expense 

Opinion”). PREPA and/or Genera reserves the right to seek allowance of administrative expenses for these, and other,

obligations required to be paid under the Generation Contract. These obligations are contingent as the Government 

Parties intend for PREPA to honor all its obligations under the Generation Contract on a timely basis.

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through the end of the Mobilization Period, pursuant to sections 105(a), 503, and 507(a)(2) of the 

Bankruptcy Code, made applicable to this proceeding by section 301 of PROMESA, and granting 

such other relief as is just and proper. To be clear, the approval sought by this Motion is not 

approval of the Generation Contract itself or authority to enter into the agreement, but rather 

allowance of Genera’s accrued and unpaid Mobilization Obligations as administrative expenses,

as contemplated by § 503(b)(1)(A) and required by the Generation Contract, to the extent PREPA 

does not timely satisfy such Mobilization Obligations in the ordinary course.

BASIS FOR RELIEF

35. Section 503(b)(1)(A) of the Bankruptcy Code, made applicable by PROMESA 

section 301, provides that “[a]fter notice and a hearing, there shall be allowed administrative 

expenses . . . including . . . the actual, necessary costs and expenses of preserving the estate.”35 

Section 301(a) of PROMESA also expressly incorporates section 507(a)(2) of the Bankruptcy 

Code, which gives priority to administrative expenses allowed under section 503(b) of the 

Bankruptcy Code.36

36. Importantly, this Court made clear in its Front-End Administrative Expense 

Opinion that Bankruptcy Code § 503(b)(1)(A) permits allowance of administrative expense 

priority claims to parties who provide post-petition services that benefit a Title III debtor.37 It held, 

among other things, that (i) Congress’ decision to carve out specific subsections of other 

incorporated Bankruptcy Code provisions, while incorporating § 503 in its entirety, “provides a 

strong indication that Congress did not intend to preclude the applicability of section 503(b)(1)(A) 

35 11 U.S.C. § 503(b)(1)(A).

36 48 U.S.C. § 2161(c)(5).

37 Front-End Administrative Expense Opinion at 15 (holding that “the text and structure of PROMESA compel the 

conclusion that operating expenses of PREPA are eligible for administrative expense priority under section 

503(b)(1)(A) of the Bankruptcy Code.”).

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in the Title III context,” and (ii) PROMESA § 301(c)(5) is “properly read as applying not only to 

incorporated provisions of the Bankruptcy Code that use the specific term ‘property of the estate,’ 

but also to provisions such as section 503(b)(1)(A) that perform relevant functions and contain the 

term ‘estate.’”38 As a result, the Court concluded that § 503(b)(1)(A), as incorporated into 

PROMESA, “makes administrative expense priority available for the necessary costs and expenses 

of preserving PREPA during the course of its Title III case.”39 

37. Under First Circuit precedent, allowance of administrative expense claims is 

determined by a two-prong test, whereby “a request for priority payment of an administrative 

expense pursuant to Bankruptcy Code § 503(a) may qualify if (1) the right to payment arose from 

a post-petition transaction with the debtor estate, rather than from a prepetition transaction with 

the debtor, and (2) the consideration supporting the right to payment was beneficial to the estate 

of the debtor.”40 Further, “[i]n light of the restrictions on judicial authority and the scope of 

PROMESA that are imposed by sections 303 and 305 of the statute, Oversight Board and debtor 

consent are also relevant considerations.”41 Indeed, PREPA is requesting Genera’s services.

38 Id. at 14–16.

39 Id. at 16.

40 Woburn Assocs. v. Kahn (In re Hemingway Transp., Inc.), 954 F.2d 1, 5 (1st Cir. 1992) (citations omitted).

41 Front-End Administrative Expense Opinion at 19; see also In re Craig Cnty. Hosp. Auth., 572 B.R. 340, 350 (Bankr. 

N.D. Okla. 2017) (finding in the chapter 9 context, it would be the “equitable result” to grant administrative expense 

status for the “actual and necessary costs and expenses of preserving the operations of [the debtor]” where the debtor 

had “expressed an intention to give administrative, priority status to post-petition claimants that conferred actual 

benefit on [the debtor] during the course of this case.”).

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38. The Mobilization Obligations, which are substantially similar to those considered 

and approved by the Court in the Front-End Administrative Expense Opinion, meet all 

requirements for allowance as administrative expenses under § 503(b)(1)(A). 

39. First, the Mobilization Obligations will be incurred post-petition and the 

Mobilization Services provided by Genera will all be performed post-petition.

40. Second, Genera’s satisfaction of its contractual obligations to PREPA during the 

Mobilization Period will manifestly benefit the debtor and preserve PREPA’s assets, as well as the 

debtor’s post-petition operations.

42 The services Genera will provide in exchange for the 

Mobilization Obligations incurred under the Generation Contract are extensive. Specifically, the 

Mobilization Services provided by Genera will materially benefit PREPA, its operations, and 

customers by building on the positively progressing energy sector improvements and by making 

operational improvements to Puerto Rico’s Legacy Generation Assets to provide modern, 

sustainable, reliable, efficient, cost-effective, and resilient power generation facilities.43 Further, 

Genera’s assumption of full responsibility for the day-to-day management, operation, 

maintenance, repair, restoration, and replacement of the Legacy Generation Assets at the end of 

the Mobilization Period will include fuel and efficiency optimization approved by PREB, asset 

management, community and media relations, finance and accounting, testing and reporting, 

emergency response, and public and employee health and safety.44 Genera will also play an integral 

42 See Woburn Assocs., 954 F.2d at 5 (“Preservation of the estate includes protection of the assets of the estate, as well 

as postpetition operation of the business of the debtor.”). Section 503(b)(1)(A) of the Bankruptcy Code provides an 

open list of expenses that could be given administrative expense priority (“the actual, necessary costs and expenses of 

preserving the estate including— . . .” (emphasis added).

43 See In re 1701 Commerce, LLC, No. 12-41748-DML-11, 2014 WL 4657314, at *8 (Bankr. N.D. Tex. Sept. 17, 2014)

(finding operation and management of the “Debtor’s largest asset” were actual and necessary expenses of preserving 

the estate under section 503(b)(1)).

44 See Marrero Decl., Ex. B, Generation Contract § 5.1; Marrero Decl., Ex. B, Annex IX.

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role in executing PREPA’s energy sector modernization strategy, as well as actively participate 

and assist in the deployment of federal funding for reconstruction work. The Government Parties 

expect that these services will provide the substantial and material benefits to PREPA described 

in paragraphs 24–26 and 28, above. To achieve these benefits, Genera must perform the 

Mobilization Services and transition to full service under the Generation Contract.

41. Implementation of the Mobilization Services is a crucial component of PREPA’s 

operational restructuring, and a structural reform required under the Board-certified PREPA Fiscal 

Plan.45 The Generation Contract not only accomplishes the transfer of operation and maintenance 

of the Legacy Generation Assets to a private operator, but also facilitates compliance with specific 

PREPA Fiscal Plan objectives, such as: (i) improving Legacy Generation Asset operational 

performance through systematic improvements and introducing and leveraging experienced 

personnel; (ii) upgrading Legacy Generation Asset technology to increase reliability and improve 

system resilience and efficiency; (iii) improving Legacy Generation Asset related processes and 

procedures; (iv) creating an energy sector environment that allows for decisions to be made free 

of the kind of political interference; (v) implementing effective and efficient capital project 

delivery; and (vi) enabling renewable energy generation.46 

42. Lastly, the Oversight Board consents to providing an administrative expense claim 

for any accrued and unpaid Mobilization Obligations. The Government Parties all agree that 

meeting such obligations is a necessary step to Genera’s assumption of full control of PREPA’s 

45 Marrero Decl. ¶ 15; see 2022 Fiscal Plan, Ch. 3.

46 See 2022 Fiscal Plan § 3.3.1.

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Legacy Generation Assets and realization of the full benefits of the Legacy Generation Asset 

transformation transaction.47

43. For all the reasons outlined herein, the Government Parties respectfully request that 

the Mobilization Obligations be granted administrative expense treatment under sections 503(b) 

and 507(a)(2) of the Bankruptcy Code, as applicable under PROMESA. 

[Remainder of Page Intentionally Left Blank]

47 See Marrero Decl. ¶ 16.

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WHEREFORE the Government Parties respectfully request the Court enter the Proposed 

Order (a) granting the Motion, and (b) granting PREPA such other relief as is just and proper.

Dated: February 21, 2023

San Juan, Puerto Rico

Respectfully submitted,

/s/ Martin J. Bienenstock

Martin J. Bienenstock*

Paul V. Possinger*

Ehud Barak*

PROSKAUER ROSE LLP

Eleven Times Square

New York, NY 10036

Tel: (212) 969-3000

Fax: (212) 969-2900

*Admitted pro hac vice

Attorneys for the Financial Oversight and 

Management Board, as representative for the 

Puerto Rico Electric Power Authority

O’NEILL & BORGES LLC

/s/ Hermann D. Bauer

Hermann D. Bauer

USDC No. 215205

250 Muñoz Rivera Ave., Suite 800

San Juan, PR 00918-1813

Tel: (787) 764-8181

Fax: (787) 753-8944

Attorneys for the Financial Oversight and 

Management Board, as representative for the 

Puerto Rico Electric Power Authority

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MARINI PIETRANTONI MUÑIZ LLC

/s/ Luis C. Marini-Biaggi

Luis C. Marini-Biaggi

USDC-PR No. 222301

250 Ponce de León Ave., Suite 900

San Juan, Puerto Rico 00918

Tel: (787) 705-2171

Fax: (787) 936-7494

Attorneys for the Puerto Rico Fiscal Agency 

and Financial Advisory Authority

DÍAZ & VÁZQUEZ LAW FIRM, P.S.C 

/s/ Arturo Díaz-Angueira

Arturo Díaz-Angueira

USDC-PR No. 231812 

290 Jesús T. Piñero Ave.

Oriental Tower, Suite 1105

San Juan, PR 00918

Tel.: (787) 395-7133

Fax: (787) 497-9664

Attorneys for the Puerto Rico Electric Power 

Authority

O’MELVENY & MYERS LLP

/s/ Maria J. DiConza

John J. Rapisardi*

Maria J. DiConza*

Gabriel L. Olivera

USDC-PR No. 303314

7 Times Square

New York, New York 10036

Tel: (212) 326-2000

Fax: (212) 326-2061

-andPeter Friedman*

1625 Eye Street, NW

Washington, D.C. 20006

Tel: (202) 383-5300

Fax: (202) 383-5414

-andElizabeth L. McKeen*

Ashley M. Pavel*

610 Newport Center Drive, 17th Floor

Newport Beach, CA 92660

Tel: (949) 823-6900

Fax: (949) 823-6994

*Admitted pro hac vice

Attorneys for the Puerto Rico Fiscal Agency 

and Financial Advisory Authority and the 

Puerto Rico Electric Power Authority

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Exhibit A

Proposed Order

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1

UNITED STATES DISTRICT COURT

DISTRICT OF PUERTO RICO

In re:

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO,

as representative of 

THE COMMONWEALTH OF PUERTO RICO, et al.,

Debtors.1

PROMESA

Title III

No. 17 BK 3283-LTS

(Jointly Administered)

In re:

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO,

as representative of 

PUERTO RICO ELECTRIC POWER AUTHORITY 

(“PREPA”), 

Debtor.

PROMESA

Title III

No. 17 BK 4780-LTS

Re: ECF No. [____]

[PROPOSED] ORDER ALLOWING ADMINISTRATIVE EXPENSE CLAIM FOR 

COMPENSATION FOR MOBILIZATION SERVICES UNDER THE PUERTO RICO 

THERMAL GENERATION FACILITIES OPERATION AND MANAGEMENT 

AGREEMENT

1 The Debtors in these Title III Cases, along with each Debtor’s respective Title III case number and the last four (4) 

digits of each Debtor’s federal tax identification number, as applicable, are the (i) Commonwealth of Puerto Rico 

(Bankruptcy Case No. 17 BK 3283-LTS) (Last Four Digits of Federal Tax ID: 3481); (ii) Puerto Rico Sales Tax 

Financing Corporation (“COFINA”) (Bankruptcy Case No. 17 BK 3284-LTS) (Last Four Digits of Federal Tax ID: 

8474); (iii) Puerto Rico Highways and Transportation Authority (“HTA”) (Bankruptcy Case No. 17 BK 3567-LTS) 

(Last Four Digits of Federal Tax ID: 3808); (iv) Employees Retirement System of the Government of the 

Commonwealth of Puerto Rico (“ERS”) (Bankruptcy Case No. 17 BK 3566-LTS) (Last Four Digits of Federal Tax 

ID: 9686); and (v) Puerto Rico Electric Power Authority (“PREPA”) (Bankruptcy Case No. 17 BK 4780-LTS) (Last 

Four Digits of Federal Tax ID: 3747). (Title III case numbers are listed as Bankruptcy Case numbers due to software 

limitations).

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2

Upon the Government Parties’ Motion for Order Allowing Administrative Expense Claim 

for Compensation for Mobilization Services Under the Puerto Rico Thermal Generation Facilities 

Operation and Management Agreement (the “Motion”);2and the Court having found it has subject 

matter jurisdiction over this matter pursuant to section 306(a) of PROMESA; and it appearing that 

venue in this district is proper pursuant to section 307(a) of PROMESA; and the Court having 

found that the Mobilization Obligations, to the extent incurred and payable under the Generation 

Contract during the Mobilization Period meet all applicable requirements for an administrative 

expense claim under sections 503(b) and 507(a)(2) of the Bankruptcy Code, made applicable to 

this Title III Case pursuant to section 301(a) of PROMESA; and the Oversight Board having 

consented to the allowance of the Mobilization Obligations as administrative expense claims; and 

that the relief requested in the Motion is in the best interests of PREPA, its creditors, and other 

parties in interest; and the Court having found that PREPA provided adequate and appropriate 

notice of the Motion under the circumstances and that no other or further notice is required; and 

the Court having reviewed the Motion and its supporting materials, and having heard the 

arguments of counsel in respect of the Motion at the hearing held before the Court on _________ 

__, 2023 (the “Hearing”); and the Court having determined that the legal and factual bases set forth 

in the Motion and its supporting materials and at the Hearing establish just cause for the relief 

granted herein; and any objections to the relief requested herein having been withdrawn or 

overruled on the merits; and upon the record herein, after due deliberation and sufficient cause 

appearing therefor, 

2 Capitalized terms not otherwise defined herein shall have the meanings given to them in the Motion.

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IT IS HEREBY ORDERED THAT:

1. The Motion is GRANTED as set forth herein.

2. Pursuant to sections 105(a), 503, and 507(a)(2) of the Bankruptcy Code, made 

applicable in this Title III Case pursuant to section 301(a) of PROMESA, Genera 

shall have an allowed administrative expense claim for its accrued and unpaid 

Mobilization Obligations incurred under the Generation Contract.

3. Notwithstanding any applicability of any Bankruptcy Rule to the contrary, the 

terms and conditions of this Order shall be immediately effective and enforceable 

upon its entry.

4. To the extent required, PREPA and the Oversight Board, as PREPA’s 

representative in this Title III Case, are authorized to take all actions, and to execute 

all documents, necessary or appropriate, to effectuate the relief granted in this Order 

in accordance with the Motion and without further order of this Court.

5. The Court shall retain jurisdiction to hear and determine any and all disputes related 

to or arising from the implementation, interpretation, and enforcement of this 

Order.

Dated: [_________ ___], 2023

_________________________________

HON. LAURA TAYLOR SWAIN

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