IN THE 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

INFORMATIVE MOTION OF THE

FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO 

LISTING PRIMARY AMENDMENTS TO TITLE III PLAN OF ADJUSTMENT IN

CONNECTION WITH CERTIFICATION OF 2023 PREPA FISCAL PLAN

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); (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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To the Honorable United States District Judge Laura Taylor Swain:

The Financial Oversight and Management Board for Puerto Rico (the “Oversight Board”), 

as the sole Title III representative of the Puerto Rico Electric Power Authority (“PREPA” or the 

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

Stability Act (“PROMESA”),

2

hereby files this informative motion listing the primary amendments 

the Oversight Board is making to PREPA’s Title III Plan of Adjustment pursuant to PROMESA 

section 313:

I. Background

1. On March 1, 2023, the Oversight Board filed the Modified Second Amended Title 

III Plan of Adjustment of the Puerto Rico Electric Power Authority [ECF No. 3296]3(as it may be 

amended, supplemented, or modified, the “Title III Plan”).4

2. On March 21, 2023, the Oversight Board informed the Governor, the President of 

the Senate, and the Speaker of the House of Representatives of Puerto Rico of the schedule for 

developing, submitting, approving, and certifying a fiscal plan for PREPA for 2023 (the “2023 

PREPA Fiscal Plan”).

5

 The schedule called for submitting a proposed fiscal plan by April 12, 

2023 and certification by June 2, 2023. This schedule is consistent with the Oversight Board’s 

2 PROMESA is codified at 48 U.S.C. §§ 2101-2241.

3 Unless otherwise stated, all ECF Nos. shall refer to the docket in Case No. 17-4780.

4 Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Plan.

5 March 21, 2023 Letter D. Skeel to P. Pierluisi Urrutia, J. Dalmau Santiago, and R. Hernandez Montanez 

regarding 2023 Fiscal Plan and FY24 Budget Timeline, available at 

https://drive.google.com/file/d/1Fwzsm8p6S-10oYpyUkEEUO20ssH58Jic/view. 

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initial schedules for certifying fiscal plans for PREPA in prior years. On April 19, 2023, the 

Oversight Board extended the date to submit a fiscal plan to April 21.6 

3. Subsequently, on May 5, 2023, “due to delays in completion of the fuel and 

purchase power expense projections,” the Oversight Board again extended the submission date to 

May 9, 2023.

7

 The date for certification by the Oversight Board was then moved to June 9, 2023.

4. During the Claim Estimation Hearing8on June 8, 2023, the Oversight Board’s 

counsel informed the Court the Oversight Board intended to certify the 2023 PREPA Fiscal Plan 

on June 16, 2023, one week later than its intended certification date of June 9, 2023. The Court 

ordered the Oversight Board to meet and confer with objectors to the Title III Plan and to file a 

joint status report by June 21, 2023 (the “Status Report”) “regarding the anticipated impact, if any, 

of the [2023 PREPA Fiscal Plan] on the confirmation proceedings and schedules, and a proposal 

for any changes that may be anticipated or requested.” June 8, 2023 Hrg. Tr. at 9:21-25.

5. On June 17, 2023, the Oversight Board filed the Informative Motion of the 

Financial Oversight and Management Board for Puerto Rico Regarding Extension to June 23, 

2023 for Certification of 2023 PREPA Fiscal Plan [ECF No. 3767] (the “Informative Motion”). 

Therein, the Oversight Board informed the Court it was unable to responsibly certify the 2023 

6 April 29, 2023 D. Skeel Ltr. To P. Pierluisi Urrutia, J. Dalmau Santiago, and R. Hernandez Montanez 

regarding 2023 Fiscal Plan and FY24 Budget Timeline, available at 

https://drive.google.com/file/d/1zhiMwVR7VKEVa5xyZQEbind2K9fKUEpr/view. 

7 May 5, 2023 D. Skeel Ltr. To P. Pierluisi Urrutia, J. Dalmau Santiago, and R. Hernandez Montanez 

regarding 2023 Fiscal Plan and FY24 Budget Timeline, available at 

https://drive.google.com/file/d/1gPgUpbc_KIzZRKJ8rOOyyU4r6TPY9UIz/view?pli=1. 

8 The “Claim Estimation Hearing” is the June 6-8, 2023 hearing to determine the amount of the Bondholders’ 

Unsecured Net Revenue Claim, as defined in the Opinion and Order Granting in Part and Denying in Part 

the Financial Oversight and Management Board for Puerto Rico’s Motion for Summary Judgment and the 

Defendant’s and Intervenor-Defendants’ Cross-Motion for Summary Judgment, Adv. Proc. No. 19 00391-

LTS, ECF No. 147. 

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PREPA Fiscal Plan by its anticipated deadline of June 16, 2023 and committed to certifying the 

2023 PREPA Fiscal Plan and identifying amendments to the Title III Plan on or before June 23, 

2023. The Informative Motion also recognized “it is likely the Oversight Board (and other parties) 

may seek to change the confirmation schedule based on these developments.” Id. at 3. 

Accordingly, the Informative Motion requested the Court extend the deadline to file the Status 

Report by one week, from June 21, 2023 through June 28, 2023.

6. On June 18, 2023, the Court entered the Order Concerning Informative Motion of 

the Financial Oversight and Management Board for Puerto Rico Regarding Extension to June 23, 

2023 for Certification of 2023 PREPA Fiscal Plan [ECF No. 3768], which, among other things, 

extended the Status Report deadline through June 28, 2023. The Court further directed the 

Oversight Board to meet and confer with counsel for objectors to the Title III Plan and to file a 

joint status report by 2:00pm on June 21, 2023 “concerning whether and to what extent the parties 

believe that confirmation-related dates and deadlines should be altered or suspended in advance of 

the Oversight Board’s Status Report.” Id. at 2.

7. On June 18, 2023, the Ad Hoc Group of PREPA Bondholders (the “Ad Hoc 

Group”), U.S. Bank National Association (the “Trustee”), Assured Guaranty Corp. and Assured 

Guaranty Municipal Corp. (together, “Assured”), and Syncora Guarantee Inc. (“Syncora,” and 

collectively with the Ad Hoc Group, Trustee, and Assured, “Bondholders”) filed the Urgent 

Motion of the Ad Hoc Group of PREPA Bondholders, Assured Guaranty Corp., Assured Guaranty 

Municipal Corp., Syncora Guarantee, Inc., and U.S. Bank National Association as PREPA Bond 

Trustee to Suspend Upcoming Confirmation Deadlines due to the Oversight Board’s Delay in 

Certifying PREPA’s 2023 Fiscal Plan [ECF No. 3769] (“Bondholders’ Urgent Motion”). 

Bondholders’ Urgent Motion sought an order suspending (i) the June 21, 2023 deadline for filing 

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witness lists, exhibit lists, and deposition designations, and (ii) the June 26, 2023 deadline for filing 

witness declarations.9

8. On June 19, 2023, in response to Bondholders’ Urgent Motion which stated the 

Oversight Board did not object to the relief it requested, the Court entered the Order Suspending 

Certain Confirmation Deadlines [ECF No. 3770], suspending the deadlines for filing finalized 

witness lists, exhibit lists, deposition designations, and witness declarations.

9. On June 21, 2023, the Oversight Board and other parties in interest filed the Joint 

Status Report of the Financial Oversight and Management Board for Puerto Rico and Other 

Parties in Interest Regarding Confirmation Schedule [ECF No. 3781]. Therein, the parties 

informed the Court that, following their meet-and-confer, there was a consensus that there was no 

choice, but to request all remaining confirmation-related deadlines be suspended.

10. Also on June 21, 2023, the Oversight Board filed the Urgent Motion of the 

Financial Oversight and Management Board for Puerto Rico for Suspension of Certain 

Confirmation Deadlines [ECF No. 3782] requesting the Court suspend all confirmation-related 

dates and deadlines, including the dates for the Confirmation Hearing. The Oversight Board 

further stated that, following certification of the 2023 PREPA Fiscal Plan, it would identify 

amendments to the Title III Plan. Id. at 6.

9 The Bondholders requested the Oversight Board to consent to the relief they requested in their Urgent 

Motion and the Oversight Board responded that it did not object to the relief. The Bondholders never 

showed their motion to the Oversight Board in advance of filing it, and therefore the Oversight Board did 

not know the motion contained a litany of attacks on the Oversight Board. At the appropriate time, the 

Oversight Board will respond. For present purposes, the Oversight Board simply submits the 

Bondholders’ charges and criticisms were based on incorrect facts, assumptions, and legal theories.

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11. That same day, the Court entered the Order Suspending Confirmation Deadlines

[ECF No. 3783] suspending all deadlines established by the Solicitation Procedures Order,10 the 

Confirmation Procedures Order,11 and the Confirmation Hearing Procedures Order,

12 pending 

further order of the Court. 

12. On June 23, 2023, the Oversight Board certified the 2023 PREPA Fiscal Plan.

13

 

The load projections in the 2023 PREPA Fiscal Plan are substantially lower (and cost projections 

are substantially higher) than those in the 2022 PREPA Fiscal Plan. Both the projected base rate 

and surcharge for fuel and purchases power costs are substantially higher. The headroom available 

for charges to customers for debt service is significantly reduced. 

13. Pursuant to PROMESA section 201(b)(1)(J), a Fiscal Plan must contain a debt 

sustainability analysis, and pursuant to section 201(b)(1)(E) must provide for a debt burden that is 

sustainable “for Fiscal Years covered by a Fiscal Plan in which a stay under titles III or IV is not 

effective.” Based on the most current data the Oversight Board has, the 2023 PREPA Fiscal Plan’s 

debt sustainability analysis provides the maximum amount for creditors PREPA can reasonably 

10 The “Solicitation Procedures Order” is the Order (I) Approving Disclosure Statement, (II) Fixing Voting 

Record Date, (III) Approving Confirmation Hearing Notice and Confirmation Schedule, (IV) Approving 

Solicitation Packages and Distribution Procedures, (V) Approving Forms of Ballots and Voting and 

Election Procedures, (VI) Approving Notice of Non-Voting Status, (VII) Fixing Voting, Election, and 

Confirmation Deadlines, and (VIII) Approving Vote Tabulation Procedures [ECF No. 3304]. 

11 The “Confirmation Procedures Order” is the Third Amended and Restated Order Establishing, Among Other 

Things, Procedures and Deadlines Concerning Objections to Confirmation and Discovery in Connection 

Therewith [ECF No. 3565].

12 The “Confirmation Hearing Procedures Order” is the Amended Order Regarding Procedures for Hearing 

on Confirmation of PREPA Plan of Adjustment [ECF No. 3759].

13 The 2023 PREPA Fiscal Plan is available here: https://drive.google.com/file/d/1aqXCP728HU7s7uE1YsnHvchnJ85dvIJ/view. 

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sustain is approximately $2.5 billion.14 This amount includes approximately $2.38 billion 

determined by the Oversight Board as being the amount of bonds serviceable by rates at or about 

the 6% share of wallet threshold for the first expected year of implementation (FY 2025). It also 

includes approximately an additional $150 million of value the Oversight Board believes can be 

provided at a tolerable risk level through a combination of additional potential revenue sources 

and savings. 

14. As a result of the certification of the 2023 PREPA Fiscal Plan, changes to the Title 

III Plan are necessary to meet confirmation and other requirements of PROMESA in sections 

201(b) and 314(b)(7). The Oversight Board also intends to submit an updated Best Interest Test 

report consistent with the 2023 PREPA Fiscal Plan.

II. Amendments to the Title III Plan15

15. While the structure of the Title III Plan will remain the same in significant respects, 

certain amendments are required to the Plan to make it consistent with the 2023 PREPA Fiscal 

Plan.

16. Based on the debt sustainability analysis set forth in Chapter 8 of the 2023 PREPA 

Fiscal Plan, the Title III Plan will be amended to reduce the amount of New Bonds to be issued 

from $5.68 billion to $2.383 billion. Additionally, the Oversight Board believes PREPA will have 

14 Due to the higher rates projected in the 2023 PREPA Fiscal Plan, the Legacy Charge, as outlined in Schedule 

B of the Title III Plan, will be revised and reduced to remain within the Oversight Board’s affordability 

parameters for residents and to minimize the risk of pushing consumers past the 6% “share of wallet” 

threshold for the first expected year of implementation (FY 2025). Similarly, the projected cash flows from 

the Legacy Charge as set forth in Schedule E of the Title III Plan will be adjusted accordingly.

15 The amendments set forth herein are summary descriptions. The amount of debt service, calculation of 

recoveries, and other numerical calculations are preliminary and subject to change. Further details and 

descriptions of these amendments will bet set forth in the amended Title III Plan to be filed by the Oversight 

Board. In the event of any inconsistency between this Informative Motion and such amended Title III Plan, 

the amended Title III Plan shall govern.

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sufficient revenue sources and savings to repay a total of $2.5 billion of debt (inclusive of the 

$2.383 billion in New Bonds).

17. Fuel Line Lenders, National, Settling Bondholders, and Vitol. Approximately 

$1.35 billion of new bonds (and/or cash) will be used to maintain the settlements with the Fuel 

Line Lenders, National, the Settling Bondholders, and Vitol.

18. Pension Claim. The treatment of the pension claim will not be amended (i.e., it

will be treated the same as pension claims in the Commonwealth were treated).

19. Non-Settling Bondholder Claims and General Unsecured Claims. The treatments 

of the non-settling bondholders’ claims and the general unsecured claims will be amended. 

20. Non-Settling Bondholder Claims. The non-settling bondholders’ claims will be 

guaranteed a minimum distribution of 12.5% of their allowed claim in the form of New Bonds. In 

addition, they will receive the CVI currently in the second amended plan and a second CVI 

described below, adjusted to the amount of their final allowed claim. Once their allowed claim is 

final, the New Bonds and cash remaining, after distributing the guaranteed minimum distributions 

of bonds and cash to the non-settling bondholders and general unsecured claimholders (see below), 

will be distributed pro rata between the non-settling bondholders and the general unsecured 

claimholders based on the non-settling bondholders’ actual final allowed claim and the general 

unsecured claimholders’ assumed aggregate allowed claim of $800 million. 

21. Second CVI for Non-Settling Bondholders. A second contingent value instrument 

(CVI) will be distributed to the non-settling bondholders to provide compensation to non-settling 

bondholders if PREPA’s revenue requirements equivalent per kWh in any actual fiscal year during 

the term of this CVI are lower than the revenue requirements per kWh as projected for the subject 

year in the 2023 PREPA Fiscal Plan, after certain reconciliations and deductions to ensure an 

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“apples to apples” comparison. To the extent actual revenue requirements per kWh equivalent is 

lower than the revenue requirements per kWh projected in the 2023 PREPA Fiscal Plan on an 

annual basis, the second CVI will generate additional payments to the non-settling bondholders 

for such year equal to the product of fifty percent (50%) of the difference in actual revenue 

requirements equivalent per kWh versus projected revenue requirements per kWh (after 

reconciliation and deductions), multiplied by actual kilowatt hours consumed in such year. For 

example, if the first year’s revenue requirements equivalent per kWh is lower than the revenue 

requirements per kWh for such year projected in the 2023 PREPA Fiscal Plan, the second CVI 

will yield a payment to bondholders after the first year. If the second year’s actual revenue 

requirements equivalent per kWh is equal to or higher than projected, the second CVI will not 

yield another payment until the second year’s deficit is recouped by future results and there is a 

further amount in excess of projections to pay to bondholders. 

22. Expected Repayment Periods for Bonds. The expected term for repayment of the 

Series A Bonds will extend to longer than the 5 years provided in the Title III Plan, and the 

weighted average life of such bonds will also extend to longer than the period provided in the Title 

III Plan. The expected repayment on the Series B Bonds will remain at 35 years, and the weighted 

average life will increase. The bond interest rate of six percent (6%) per year will remain 

unchanged. 

23. PREPA will no longer issue $400 million in Series B-2 Bonds to the 

Commonwealth. The Commonwealth, however, will appropriate such funds to pay PREPA’s

allowed administrative expense claims upon emergence or upon such claims’ allowance.

24. Additional Rights of New Bonds. The Title III Plan will also be amended to reflect 

certain enhancements to the rights of holders of the New Bonds that are currently contemplated in 

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the filed Plan Supplements, including the New Master Indenture. These amendments include, 

among other things, (i) the New Bonds and the Title III Plan’s current CVI will receive payment 

from, and be secured solely by, a gross pledge of the Legacy Charge Revenue rather than a net 

pledge, (ii) PREPA will no longer be able to use Legacy Charge Revenues to pay Operating 

Expenses unless a force majeure event occurs, (iii) an “Operation and Maintenance Covenant” 

will be added whereby Reorganized PREPA covenants to adjust its rates/charges so that its 

revenues in each fiscal year are no less than its operating costs, (iv) the “Amendment Test for 

Replacement of the Legacy Charge” has been expanded to provide a mechanism for the New Bond 

Trustee to challenge any proposed replacement charge.

25. General Unsecured Claims. The treatment of the general unsecured claims will be 

amended to provide a guaranteed minimum return of 13.5% on their assumed aggregate allowed 

claim of $800 million in the form of cash and New Bonds (at PREPA’s discretion). When the 

non-settling bondholders’ allowed claim is final, the remaining cash (if any) and remaining New 

Bonds not used to make the guaranteed minimum distributions to the non-settling bondholders and 

general unsecured claimholders, will be allocated to the non-settling bondholders and general 

unsecured claimholders as set forth in paragraph 20 above. The general unsecured claimholders 

(a) shall be entitled to receive the CVI offered general unsecured claimholders in the currentlyfiled version of the Plan, (b) shall not receive the second CVI that is being given to the non-settling 

bondholders (see supra ¶ 21) and (c) shall absorb the upside risk their aggregate final allowed 

claims will total less than $800 million and the downside risk their aggregate final allowed claims 

will total more than $800 million. 

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III. Schedule to Amend and Certify Title III Plan

26. The Oversight Board regrets the confirmation schedule initially established by the 

Court has been upended due to the 2023 PREPA Fiscal Plan. The Oversight Board will be 

conferring with parties in interest starting tomorrow to try to establish a new schedule. 

27. The Oversight Board commits to certifying and submitting a Third Amended 

PREPA plan of adjustment on or before July 14, 2023. It also intends to use this time to discuss 

amendments to the Plan with certain settling parties, as certain provisions in the plan may be 

subject to their reasonable approval. 

28. The Oversight Board submits re-solicitation of the plan is unnecessary. The 

affected classes of claims have already rejected the Title III Plan, and can thus be presumed to 

reject an amended plan that provides for lower issuance of hard debt. The Title III Plan, as 

amended, should maintain several impaired accepting classes whose recoveries are not materially 

impacted by the amendments, and therefore do not need to be resolicited. 

Dated: June 23, 2023

New York, New York

Respectfully submitted,

/s/ Martin J. Bienenstock

Martin J. Bienenstock

Paul V. Possinger

Ehud Barak

Margaret A. Dale

Michael T. Mervis

Daniel S. Desatnik

(Admitted Pro Hac Vice)

PROSKAUER ROSE LLP

Eleven Times Square

New York, NY 10036

Tel: (212) 969-3000

Fax: (212) 969-2900

Attorneys for the Financial Oversight and 

Management Board, as representative for 

PREPA

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/s/ Hermann D. Bauer 

Hermann D. Bauer

USDC No. 215205

O’NEILL & BORGES LLC

250 Muñoz Rivera Ave., Suite 800

San Juan, PR 00918-1813

Tel: (787) 764-8181

Fax: (787) 753-8944

Co-Attorneys for the Financial 

Oversight and Management Board, as 

representative for PREPA

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CERTIFICATE OF SERVICE

I hereby certify that, on this same date, I electronically filed the foregoing with the Clerk 

of the Court using the CM/ECF system, which will send notifications of such filing to all 

CM/ECF participants in this case. 

/s/ Hermann D. Bauer

Hermann D. Bauer

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