IN THE UNITED STATES BANKRUPTCY COURT 

FOR THE 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

Case 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

Case No. 17 BK 4780-LTS

EXPERT DECLARATION OF DR. JOSÉ ISRAEL ALAMEDA LOZADA IN 

SUPPORT OF THE EMPLOYEES’ RETIREMENT SYSTEM OF PUERTO RICO 

ELECTRIC POWER AUTHORITY’S OBJECTION TO THE CONFIRMATION OF 

THE PUERTO RICO ELECTRIC POWER AUTHORITY’S PLAN OF 

ADJUSTMENT 

[Space intentionally left blank]

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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1 I. Introductory Questions 

2 Q. State your name. 

3 Dr. José Israel Alameda Lozada.

4 Q. State on whose behalf you are testifying before the Title III Court.

5 I am testifying on behalf of the Puerto Rico Electric Power Authority Employee’s Retirement 

6 System (“PREPA ERS” or “SREAEE”).

7 Q. Describe your professional and academic experience and qualifications.

8 See CV attached as Annex 2. 

9 Q. Describe the purpose of your direct testimony.

I will provide expert testimony and an economic study to show that the Plan of Adjustment210 is 

11 not feasible, due to the macroeconomic impact of the implementation of the Legacy Charge 

12 and its effect on Puerto Rico’s economy. I will demonstrate that the Legacy Charge will cause 

13 a downward economic spiral, as it will negatively impact consumers, production, employment, 

14 migration, commercial competitiveness, etc. This entails the eventual failure of PREPA ́s Plan 

15 and, consequently, the Commonwealth’s failure to meet its debt service obligations pursuant to 

16 its own Plan of Adjustment.

17 II. The Plan of Adjustment is not feasible.

18 Q. Is the Puerto Rican economy competitive and sustainable in the long term?

19 Puerto Rico’s economy is going through structural problems, not cyclical. Puerto Rico is facing 

20 secular stagnation which implies a non-growth capacity in the long run. The analysis and 

21 information contained in the Certified Fiscal Plans demonstrate this secular stagnation. First, 

22 real GNP growth projections rarely achieve over 1% growth. See CFP, Exhibit 7, page 17.

23 Second, the Commonwealth will face a deficit from 2026 without any sign of a surplus growth 

2 All references to “Plan of Adjustment” in this testimony refer to the Modified Second Amended Title III Plan of 

Adjustment of The Puerto Rico Electric Power Authority filed at Case No. 17-04780-LTS, ECF 3296, the exhibits 

and other materials attached to the Plan of Adjustment, and any and all amendments which were available at the 

date of this testimony.

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24 path. See CFP, Exhibit 10, page 20. Finally, federal funds have maintained a temporary and 

25 non-sustained short-term growth from 2016 to the present. See CFP, Exhibit 3, page 15. Thus, 

26 Puerto Rico’s economy is not sustainable, and it has no competitiveness in the long term. To 

27 make matters worse, the Legacy Charge imposed in PREPA’s Plan of Adjustment, as I 

28 conclude in my report, has a negative impact, not just for PREPA, but for the economy in 

29 general, since a decrease in the economic activity translates into less collections for the 

30 Commonwealth’s General Fund. 

31 Q. How does this impact affect the feasibility of PREPA’s Plan of Adjustment?

32 Because “feasibility” means and refers to compliance with Section 314(b)(6) of PROMESA as 

33 interpreted by the Title III Court, it includes that the debtor entity can both pay its post-petition 

34 debt and provide future public services at a level necessary to its viability. See In re Fin. 

35 Oversight & Mgmt. Bd., 637 B.R. 223, 302-03 (D.P.R. 2022). Electricity is not just an essential 

36 service; it is a human right. If PREPA cannot sustain its operations, it cannot provide future

37 public services as necessary. 

38 The proposed Legacy Charge has a bigger impact on the industrial and commercial sectors, but 

39 also affects the welfare of Puerto Rico’s residents. The rate increases of the Legacy Charge 

40 deviate from the threshold cost, estimated at $0.16, and project an increase without converging 

41 with that threshold cost. Furthermore, the Legacy Charge deviates from the theories of other 

42 economists, including the Board’s own expert Andrew Wolfe, who estimated a threshold cost

43 of $0.21. This has a perverse effect on industrial sectors that make up Puerto Rico’s economy.

44 Using six (6) equations, this study demonstrates that the Legacy Charge has a negative effect 

45 on the real growth of the Puerto Rican economy in the long term. It will also affect demand for 

46 kWh in industrial sectors, inducing decreased consumption. This decrease translates into fewer 

47 revenues for the Commonwealth’s general fund, which risks compliance with the debt service 

48 obligations of the Commonwealth Plan of Adjustment. Furthermore, the reduction in energy 

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49 demand will make PREPA’s operations unsustainable, particularly when we consider 

50 PREPA’s new revenue engagements through the PPPs, such as LUMA and GeneraPR.

51 Q. How does this impact affect the Commonwealth’s ability to meet its debt service 

52 obligations?

53 The imposition of the Legacy Charge, with or without the additional $0.024 per kWh for the 

54 PayGo payments, creates a burden to Puerto Rico residents, as well as the industrial and 

55 commercial sector, which decreases revenue for the Commonwealth. Moreover, the payment 

56 of the Commonwealth restructured debt, PayGo pension payments and the transfers to the 

57 Commonwealth Trust Fund, in addition to the effects of the Legacy Charge, make the CPF 

58 unsustainable, as seen in my report. Annex 1. By 2031, the projected revenues destined for the 

59 payment of restructured debt, PayGo and the Trust fund alone would be between 41.6% and 

60 43.4%, meaning that there would be between 60% and 57% available revenue to cover essential 

61 services, among the other expenses that need to be covered with the General Fund. Therefore,

62 the imposition of the Legacy Charge makes all the assumptions established in the CFP 

63 unsustainable and with them the ability of the Commonwealth to pay debt service pursuant to 

64 its own Plan of Adjustment. 

65 I declare under penalty of perjury that the foregoing is true and correct to the best of my 

66 knowledge, information, and belief.

67

68 ______________________

69 José I. Alameda Lozada, Ph.D.

70 April 28, 2023

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ANNEX 1

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0

An Assessment of the Legacy Charge 

Proposed by the Federal Oversight and 

Management Board: Effects on the Puerto 

Rican Economy

 

2023

JOSE ISRAEL ALAMEDA-LOZADA, PH.D., ECONOMIST

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Executive Summary 

1) The Plans approved by the Financial Oversight and Management Board (FOMB) and the Government 

of Puerto Rico, particularly the Plan of Adjustment,1fall upon a(n): 

a. Economy that is going through a form of stagnation which, in macroeconomics, is referred to 

as Secular Stagnation. Such a state implies a lack of institutional mechanisms and competitive 

advantage to propel a process of sustained long-term economic growth. The result is an 

economy that: a) is fragile and weak; b) is vulnerable to the particular macroeconomic 

imbalances of Puerto Rico; and c) lacks an endogenous ability to deal with these imbalances.

b. Declining population, as a result of: 

i. Strong migration outflow, whereby a large amount of endogenous human capital, 

such as technicians, specialists, physicians, etc., emigrate elsewhere. 

ii. Reduction in fertility and births.

c. Absence of the structural capacity to achieve (tackle with) a path toward sustained recovery 

for Puerto Rico.

d. Dependence on federal funds to maintain short-term, temporary, and un-sustained growth 

from 2016 until the present. The approval of such funds by the federal government is always 

a process plagued with great uncertainty and aggressive lobbying, which tends to be 

burdensome in terms of time and resources.

e. Acts of God, such as Hurricanes Irma and María, the earthquakes and the Covid-19 pandemic, 

which have had collateral effects that further hinder the sustained recovery of the GDP, 

income, and employment in Puerto Rico. 

1 All references to “Plan of Adjustment” in this testimony refer to the Modified Second Amended Title III Plan of 

Adjustment of The Puerto Rico Electric Power Authority filed at Case No. 17-04780-LTS, ECF 3296, the exhibits and 

other materials attached to the Plan of Adjustment, and any and all amendments which were available at the date 

of this testimony.

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2) Under these conditions, the Plans, with their neoliberal approach in the style of independent 

countries that are under the International Monetary Fund (IMF) and the World Bank (WB), distance 

Puerto Rico from the analytical structural framework that is appropriate for Puerto Rico’s economy, 

which only worsens the economic crisis in the mid- and long-term. 

3) Clearly, as a result of the foregoing, the Plan of Adjustment is unsustainable. That is, it is incapable of 

addressing the bankruptcy process in the long run. Unless the Plan of Adjustment is modified, so it 

does not directly and/or indirectly the people of Puerto Rico, it will be unsustainable those of the 

Puerto Rico Electric Power Authority’s (PREPA) residential customers who are most socially and 

financially vulnerable and have high relative poverty rates. The burden of the payment pursuant to 

the Plan of Adjustment would fall mostly upon the middle and lower classes. 

4) This economist’s study seeks to provide a scientific analysis of the potential impact of Plan of 

Adjustment and its effects on the overall economy of Puerto Rico and, therefore, on the 

Commonwealth of Puerto Rico’s (Commonwealth) restructuring plans. Therefore, I will:

a. Assess the un-sustained growth of the economy in the short term. 

b. Measure the potential short-, mid- and long-term effects of the Legacy Charge in the 

residential, industrial, and commercial sectors under the Plan of Adjustment.

c. Analyze the potential adjustments made in the residential, industrial, and commercial sectors 

in response to the Legacy Charge: a) lower consumption levels (law of demand); b) the 

replacement effect (use of solar or photovoltaic (PV) power, heat-power, energy-saving 

equipment, etc.) and c) population level changes.

d. Analyze the effects of the foregoing on the feasibility of the Plan of Adjustment and of 

Commonwealth debt restructuring, respectively. 

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Purpose of this Report 

I will provide expert testimony and an economic study to show that the Plan of Adjustment is not 

feasible, due to the macroeconomic impact of the implementation of the Legacy Charge and its effect on 

Puerto Rico’s economy. I will demonstrate that the Legacy Charge will cause a downward economic spiral, 

as it will negatively impact consumers, production, employment, migration, commercial competitiveness, 

etc. This entails the eventual failure of PREPA ́s Plan and, consequently, the Commonwealth’s failure to 

meet its debt service obligations pursuant to its own Plan of Adjustment.

Summary of Conclusions 

The conclusions of this report are summarized as follows: 

• Puerto Rico is facing secular stagnation. Thus, Puerto Rico’s economy is not sustainable, and 

it has no competitiveness in the long term. To make matters worse, the Legacy Charge 

imposed in PREPA’s Plan of Adjustment has a negative impact, not just for PREPA, but for the 

economy in general, since a decrease in the economic activity translates into less collections 

for the Commonwealth’s General Fund.

• The proposed Legacy Charge has a negative impact on all sectors of electricity consumers, to 

the extent that it deviates from the threshold cost.

• The imposition of the Legacy Charge makes all the assumptions established in the 2023 

Commonwealth Certified Fiscal Plan (CFP) unsustainable and with them the ability of the 

Commonwealth to pay debt service pursuant to its own Plan of Adjustment.

Outline 

1) Chart 1 explains the probable-causation logic. First, an increase in energy rates has a direct 

effect on industrial, commercial, and residential consumption. Production, employment, and 

income levels are also affected in the short term. Family wellbeing declines as energy becomes 

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more expensive. Furthermore, increases in the cost of the kWh have an indirect effect on the 

price of goods and services.

2) Macroeconomic adjustments can occur in the distribution chain, which affect prices in various 

stages. It is likely that adjustments will be made, resulting in lower demand (the law of 

demand). One adjustment is the replacement effect, which is when economic sectors move 

toward options for energy independence, such as PV; heat-power; energy-saving systems, etc. 

3) Another effect is the interindustry effect. An economy is an intricate relationship of purchases 

and sales between the various industrial components that constitute a country’s economic 

structure. The Input-Output Matrix (IOM)2represents this intricate network of economic 

relations. Therefore, if agricultural production is affected by high energy costs, then food 

manufacturing is also affected, which, in turn, affects the wholesale and retail prices of other 

related sectors in this interindustry network. 

4) Macroeconomic adjustments are perceived in GDP, Income, and Employment levels; as well 

as the revenues collections of the Puerto Rico Department of the Treasury (Hacienda) and 

changes in population levels due to outflow migration. 

5) Lastly, all of these effects have repercussions on the expected outcomes of Plan of 

Adjustment, and the Commonwealth debt restructuring. We cannot ignore the lack of a 

transparent and clear macroeconomic analysis adapted to Puerto Rico’s reality, as opposed 

2 The Input-Output Matrix (IOM) is an arrangement of rows and columns, represented in the form of a table, which 

shows the magnitude of intermediate inputs and raw material that economic sectors get from the other sectors 

within a country’s economic structure. Final demand is also included. The IOM allows us to determine the entire 

structure of an economy, or of any of its productive sectors, and to measure the influence that any variation in the 

supply and/or demand of a certain type of good has on the production of others. The matrix is used to obtain the 

multipliers of each sector and their influence on the other sectors, because it summarizes the balance between 

supply and the utilization of goods and services in an economy. The IOM was devised by Russian economist Wassily 

Leontieff, winner of the Nobel Prize in Economics in 1973.

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to the analyses performed in the certified fiscal plans, which are in line with the neoliberal 

policies of the IMF and WB and applied to sovereign countries with unsustainable debts. 

 

Chart 1 Logical Channels of Legacy Charge Effects

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2023 Commonwealth Certified Fiscal Plan 

Disclaimer 

In March 2023, the FOMB presented the 2023 Commonwealth Certified Fiscal Plan (CFP) 

which establishes the social and economic path to get Puerto Rico out of bankruptcy and put it on the 

path to sustainable recovery. However, the CFP contains the following disclaimer:

Any statements and assumptions contained in this document, whether 

forward-looking or historical, are not guarantees of future performance and involve 

certain risks, uncertainties, estimates, and other assumptions made in this document. 

The economic and financial condition of the Government and its instrumentalities is 

affected by various legal, financial, social, economic, environmental, governmental, 

and political factors. These factors can be very complex, may vary from one fiscal year 

to the next, and are frequently the result of actions taken or not taken, not only by 

the Government and the Oversight Board, but also by other third-party entities such 

as the government of the United States. Examples of these factors include, but are 

not limited to:

• Any future actions taken or not taken by the United States government 

related to Medicaid or the Affordable Care Act;

• The amount and timing of receipt of any distributions from the Federal 

Emergency Management Agency and private insurance companies to repair 

damage caused by the Earthquakes and/or Hurricanes María, Irma, and Fiona;

• The amount and timing of receipt of any amounts allocated to Puerto Rico 

and provided under the Community Disaster Loans Program;

• The amount and timing of receipt of any additional amounts appropriated by 

the United States government to address the funding gap described herein; 

and 

• The timeline for completion of the work being done by the Puerto Rico Electric 

Power Authority (“PREPA”) to repair PREPA’s electric system and 

infrastructure and the impact of any future developments or issues related to 

PREPA’s electric system and infrastructure on Puerto Rico’s economic growth. 

Because of the uncertainty and unpredictability of these factors, their impact cannot 

be included in the assumptions contained in this document. Future events and actual 

results may differ materially from any estimates, projections, or statements contained 

herein. Nothing in this document should be considered as an express or implied 

warranty of facts or future events; provided, however, that the Government is 

required to implement the measures in this 2023 Fiscal Plan and the Oversight Board 

reserves all its rights to compel compliance . . . . (emphasis added).

This clearly shows the speculative and uncertain nature of this CFP, and, in turn, the conclusions 

regarding public policy that may be derived from it. 

Shortfalls of the CFP 

In my judgment, the CFP falls short with regard to the following issues:

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1) The CFP refers to certain structural adjustments, called structural reforms, that are not 

relevant to Puerto Rico and are not in keeping with the international legal framework 

supporting the local economy; 

2) The CFP invokes the experience of independent, sovereign countries that manage—despite 

certain limitations—their monetary and fiscal policies and are able to make public policy 

decisions; but, with regard to the structural reforms proposed for Puerto Rico, they want to 

compare the local economy with macroeconomic imbalances and adjustment policies, which 

clearly shows a failure to understand Puerto Rico’s structure. 

3) The growth indexes or values, in addition to the real GNP, that the structural reforms would 

bring about are not determined by an econometric model, and everything seems to suggest 

that they are merely the result of a guessing exercise. The CFP does not present a source for 

these additional growth rates provided by the reforms applied to Puerto Rico. 

4) To understand these shortcomings of the CFP, we must keep in mind the structural differences 

and the international legal framework that Puerto Rico operates under:

a. Puerto Rico is an unincorporated territory of the United States under the powers of 

Congress. This is different from independent countries that the CFP uses for 

comparison. Laws in Puerto Rico are, to a great extent, subject to the power of the 

federal court and Congress. Many federal laws apply to Puerto Rico, particularly the 

antitrust laws, but not to independent countries like Peru, Mexico, Spain, etc.

b. Local residents are United States citizens and are exempt from having to use a 

passport or applying for a work or travel visa in the United States, because to go from 

Puerto Rico to the State of N.Y. you do not need the paperwork that is required of 

Mexicans, Peruvians, etc. Puerto Rico does not have the legal capacity to make 

migration policy, like Mexico, Peru, and other countries where the arrival of foreigners 

is limited or incentivized with special permits or visas. 

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c. Puerto Rico does not have the legal capacity to negotiate with other countries 

bilateral and multilateral international trade relations, either for commerce or special 

tax treaties. 

d. In the economic sense, it acts as a region of the United States (“It is a state-like 

economy”). In this sense, Puerto Rico has the same incapacity to promote a monetary 

policy, establish an official currency other than the dollar, or make fiscal policies as a 

state of the union. Such decisions are not negotiated between Puerto Rico and the 

United States. They are imposed by Congress and as a consequence of the legal 

framework of the United States. The dollar is Puerto Rico’s official currency, not by 

local election, as in countries who have opted for dollarization, but by colonial 

mandate of the United States.

e. Puerto Rico does not have the legal capacity to have a central bank and perform the 

work of a monetary policy, even a limited one. Our central bank is the same as the 

states’—the Federal Reserve Bank. Mexico, Peru, Spain, Estonia, etc., even within the 

jurisdictional framework of the European Union, can make monetary policies because 

they have a central bank. Puerto Rico does not have a central bank and cannot have 

a currency other than the dollar. Independent countries can.

f. Puerto Rico’s local fiscal policy is limited to Congress’s spending policy and automatic 

stabilizer determinations (i.e. SNAP referred to as “PAN” in Puerto Rico, which is 

received in blocks; the WIC program; Housing Section 8, etc.). This spending policy 

applies to Puerto Rico and U.S. citizens who reside in Puerto Rico, with no other 

internal considerations of economic policy. 

5) Additionally, with regard to Energy Reform, the CFP is lacking.

a. It does not specify the type of reform it refers to when comparing Puerto Rico to other 

countries such as Mexico, Perú, etc. It does not establish the legal and technical details 

of the reform implemented and their outcome; whether or not those reforms were a 

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privatization where public assets are sold to a private company, or a type of 

partnership between the private sector and the government. 

b. With respect to the public-private partnerships (PPP), the CFP fails to specify the 

conditions present in the contracts between the private sector and PREPA, and the 

effects of these contracts.

c. It fails to specify in what social, economic, and technical conditions these utility 

companies went to other countries that were or were not similar to Puerto Rico at a 

given historical moment. A particular characteristic of Puerto Rico is that there has 

been a reduction in the demand for (consumption of) electricity, which makes the 

depressive economic conditions existing at the time of the negotiation notable.

d. It fails to present any study whatsoever to demonstrate the additional growth in the 

real GNP resulting from the energy reform of 0.10% for fiscal years 2024, 2025 and 

2026. In other words, the CFP was certified with claims of an increase in the real GNP, 

without any econometric evidence or exercise whatsoever.

Mexico, a country cited in the CFP, just announced the nationalization of power companies.3 President 

Ángel Manuel López Obrador refers to a “new nationalization of the electric power industry,” as it is 

very important in order for Mexico to maintain public companies, instead of, he stated, and I quote, 

“betting on the privatization of social activities and strategic activities for the people and for the 

nation.”4 This nationalization policy arises out of the need to purchase the 13 power plants, because 

this would guarantee that electric power prices will not increase in the country, as has occurred in 

Spain. In this country, electrical energy is regulated by the laws of supply and demand within the 

market and results in the Iberdrola company charging very high rates to Spanish citizens.5

3

See AMLO Nationalizes Electricity; Purchases 13 Plants From Iberdrola, https://polemon.mx/amlo-nacionalizala-electricidad-le-compra-13-plantas-a-iberdrola/.

4

Ibid.

5

Ibid.

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Fundamental Conclusions for Economic Growth and the Fiscal Deficit 

The CFP presents a long-term negative trend. (2023 CFP, Vol.1, page 10). In 2024, a -0.2% 

growth is expected, and in 2025, 0% growth. It is observed that the real GNP growth is close to 0% or 

has a negative value, except for FY 2027. 

A relevant result presented in the CFP is the Commonwealth Projected Budget Gap. (2023 

CFP, Vol.1, page 20). The Commonwealth would fall into fiscal deficits very close to 2027 and 2028. 

The worst part is that it would not recover in the long run and would continue to have budget gaps 

between 2028 and 2052. This is another indicator of the economy’s secular inability to recover a rate 

of sustained growth that allows the Commonwealth to take on new debt and pay its existing debt, 

even if it is restructured. 

Graph 1 Puerto Rico Real GNP Growth Rate. Source: 2023 Commonwealth Certified Fiscal Plan, Vol. 2, page 

20.

Graph 2 Commonwealth Projected Budget Gaps/Surplus

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Federal Funds as the Most Important Engine of Non-Sustainable growth. 

The catastrophic events that have taken place in the past years led to a significant allocation 

of resources by Congress, mostly through its agencies. Three events are sources of historical 

allocation: Hurricanes Irma and María (2017), the earthquakes, which especially damaged the 

southern region of Puerto Rico (2019), and the Covid-19 Pandemic (2020 onward). 

The Central Office for Recovery Reconstruction and Resiliency (COR3) is the local agency 

designed to manage these resources, which amount to $81.8 billion: FEMA funds amount to $45.3 

billion; CARES Act funds amount to $2.26 billion; American Rescue Plan Act funds amount to $4.02 

billion, and others $30.26 billion. However, of the grand total allocated, only 34.2% has been used. 

The big question is whether Puerto Rico would lose a large part of these allocated funds, especially 

from FEMA and others, due to ineffective utilization thereof. 

Table 1 Federal Funds under the Agency COR3 Allocated, Obligated and Disbursed: 2023. Source: Data Obtained from COR3, 

FEMA, AAFAF & Department of Treasury, https://recovery.pr.gov/en/financial-analysis/financial-summary#

Table 1 presents the contribution of federal funds to the growth of the nominal GNP. Between 2020 

and 2025, their contribution is 2.5%, that is 21% of the nominal GNP. The expected nominal growth of 

the GNP is -0.73%, without deducting the effects of inflation. 

It is clear that Puerto Rico’s economy has subsisted with the federal funds it receives, as it 

does not appear to have the capacity for sustainable growth. In absence of a model for socioeconomic 

growth that will support long-term growth, the local economy’s habitual source of support is, has 

been, and apparently will continue to be, federal funds. Despite the fact that about $10 billion in 

federal funds are received there on a yearly basis, Puerto Rico will not be able to grow again until fiscal 

year 2027, and it will grow merely 1.7%, according to the CFP. Following this CFP, the economy will go 

back to a period of stagnation and contraction. It is clear that the CFP certifies that the economy is in 

Allocated Obligated Disbursed % Disbursed to Allocated

FEMA Funds $45.30 $44.56 $17.70 39.07%

CARES Act $2.26 $2.21 $2.19 96.90%

American Rescue Plan Act $4.02 $2.89 $2.89 71.94%

Other Funds $30.26 $25.37 $5.28 17.45%

Total COR 3 Federal Funds $81.80 $75.00 $28.00 34.23%

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9

secular stagnation, which implies that the economy does not have the long-term capacity to get on 

the path to sustainable growth, without the extreme need for federal funds. The CFP does not forecast 

a quick recovery of sustained growth of say a positive growth of 2.0%. In this CFP, the FOMB had to 

revise and lower that previous result. The 2022 Commonwealth Certified Fiscal Plan estimated a 

growth of 2.6%, but without the arrival of the federal funds, the result would have been worse. Puerto 

Rico’s economy would have fallen 0.4%. Puerto Rico’s economy is growing less than expected, and the 

forecast is that this will not improve in the next decade, even with the arrival of large sums of federal 

funds. In the current fiscal year, a 0.7% decline is expected—the first decline in three years. Economic 

growth will be close to zero in the following three years, with a 1.7% upturn in 2027, followed by a 

slowdown and period of contraction in fiscal year 2030.

Table 2 Contribution to nominal GNP growth. Federal Funds and nominal GNP of Puerto Rico

Note 1 Last column on the right-hand side measures the contribution to growth of Federal Funds. It is the share of Federal 

Funds to nominal GNP times the rate of growth on federal funds data.

The influx of federal funds has given a false impression of recovery because the funds cover up the 

secular and structural weaknesses that persist and hinder long-term sustainable economic growth. 

Net Revenues to General Fund 

An erroneous claim of evidence of recovery made by the FOMB and the Commonwealth was 

based on the fact that extraordinary revenues were received this year. Indeed, between 2018 and 

2022, these increased from $9.3 billion to $11.3 billion. However, this analysis failed to make a 

necessary comparison with the economic base, which is the nominal GNP. The ratio between Net 

Revenues to the General Fund and the Nominal GNP was 16.1% in 2019 and 14.7% in 2022—very 

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similar to the period from 2000 to 2004, where it was 15% to 16%. Therefore, we can conclude that 

there is no evidence on which to base a claim for record revenues. 

Table 3 Net Revenue to General Funds, Nominal GNP and Ratio Net Revenue to GNP FY 2000-2022. Source: Planning Board, 

Income and Product Accounts.

Moreover, the claim of historical revenues is marred by increases in consumer prices. To the extent 

that we have higher price levels, our revenues will also be higher, ceteris paribus. The Table 3 shows 

how, between the first half of fiscal year 2022 to 2023, the increase in Net Revenues was 4.5%; taxable 

sources, 5.2%, and non-taxable sources, 6.8%. In the very same period, the Consumer Price Index 

increased by 6.4%. These revenues are clearly also influenced by higher price levels.

Table 4 Net Revenues to General Fund and Inflation in Puerto Rico: 2021-22 to 2022-23

Note 2 Treasury Department collects $1.1268 billion during the month of January of FY 2023, Press Release/ Monday, 

March 6, 2023

Fiscal Year Net Revenues to General Fund Nominal GNP Ratio Net Revenue/GNP

2000 $6,943.6 $41,418.6 16.8%

2001 $6,962.1 $44,046.6 15.8%

2002 $7,454.4 $45,071.3 16.5%

2003 $7,841.7 $47,479.4 16.5%

2004 $7,985.4 $51,826.5 15.4%

2005 $8,305.7 $54,861.9 15.1%

2006 $8,541.2 $57,854.3 14.8%

2007 $8,862.5 $60,642.7 14.6%

2008 $8,359.0 $62,703.1 13.3%

2009 $7,710.2 $63,617.9 12.1%

2010 $7,716.1 $64,294.6 12.0%

2011 $8,158.3 $65,720.7 12.4%

2012 $8,667.4 $68,085.7 12.7%

2013 $8,502.2 $68,944.9 12.3%

2014 $9,036.9 $68,797.5 13.1%

2015 $8,960.9 $69,602.0 12.9%

2016 $9,175.3 $69,985.2 13.1%

2017 $9,334.9 $69,049.5 13.5%

2018 $9,313.2 $67,601.1 13.8%

2019 $11,375.9 $70,765.1 16.1%

2020 $9,288.5 $70,508.7 13.2%

2021 $11,688.0 $73,580.8 15.9%

2022 $11,327.0 $76,892.0 14.7%

July to January July to January Rate of Growth

(thousand of dollars $) 2021-2022 2022-2023

Net Revenues to General Fund $6,268,276 $6,549,529 4.5%

 From Taxable Sources $5,896,072 $6,201,289 5.2%

 From Non Taxable Sources $209,655 $224,006 6.8%

 Other sources (Rum shipment excise taxes) $162,549 $124,234 -23.6%

Consumer Price Index, Average 123.3 131.2 6.4%

Base (dic =2006)

Source

Departamento de Hacienda recauda $1,126.8 millones durante el mes de Enero del Año Fiscal 2023

Comunicado de Prensa | Lunes, Marzo 6, 2023

https://hacienda.pr.gov/sites/default/files/ingresos_netos_al_fondo_general_enero_02.28.2023.pdf.

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Employment and Labor Force Participation Rates 

The CFP seems to claim that the decline in the unemployment rate in Puerto Rico, along with 

the increase in the employment rate, are evidence of a trend toward recovery. Of course, it fails to 

show that this is a permanent trend or that it points to a sustainable trend in the long run. 

As Puerto Rico continues to emerge from the COVID-19 pandemic, the unemployment 

rate continues to decline in a trend started in 2010 reaching a historic low of 5.8% in 

August 2022. While unemployment is still relatively high compared to the mainland, 

Puerto Rico has narrowed the gap to just over 2 percentage points. In addition, labor 

force participation, despite being below other U.S. states, continues to rise. This 

increase is likely related in part to the recent expansion of the EITC program in 2021. 

(CPF, Vol. 1, Page 15)(emphasis added). 

Table 5 presents information from the Department of Labor and Human Resources regarding 

the labor market. Graphs 3, 4 and 5 present the civilian non-institutional population,6labor force and 

employment rates. As you can see, the reduction in the local population has caused both the civilian 

population and the labor force to decrease, which affects the typical interpretation of employment, 

unemployment, and participation rates. The employment rate increased from 2018 to 2022 from 

972,000 to 1,124,000. Therefore, the unemployment rate decreased from 19.2% to 9.6%. However, 

this reduction is not a reflection of solid and sustainable recovery. 

Let us note that none of the three labor-market variables—civilian population, labor force and 

employment rate—show that their increase has reached its peak level, which marked the arrival of 

the 2016 recession. With regard to the employment rate, there is a gap of 149,000 employees below 

the 2007 employment rate, which was of 1,263,000 employed individuals. We must note that the 

employment rate in 2022—1,124,000 employed individuals—was very similar to the employment rate 

in 2010—1,075,000 employed individuals. However, the unemployment rate in 2010 was 16.5%, and 

the participation rate, 36.9% (in 2022, it was 40.0%). 

Therefore, the reduction of the unemployment rate is not a sign of solid recovery in terms of 

employment and labor force participation, but a sign of a shrinking population, which causes a 

6 Civilian noninstitutional population is defined as those persons aged 16 or older residing in Puerto Rico, who 

are not inmates or institutionalized, that is, in penal institutions, mental facilities, homes for the elderly, etc., 

and who are not on active duty in the U.S. Armed Forces.

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reduction in civilian population and labor force rates. This population decline is due, in part, to the 

emigration of individuals to the United States, as a result of which there are less people of working 

age engaging in efforts to seek and maintain employment in Puerto Rico. This causes the 

unemployment rate to drop, not because these individuals have found work in Puerto Rico, but 

because they have ceased to seek employment in Puerto Rico. 

Table 5 Labor Market Profile in Puerto Rico. Source: 

http//www.mercadolaboral.pr.gov/Tablas_Estadísticas/Fuerza_Trabajadora/T_Serie_Historica.aspx 

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Graph 3

Graph 4

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Graph 5

The Impact of Extraordinary Events such as Hurricanes Irma and María 

In Puerto Rico, many hypothesize that atmospheric events do not have long-term effects on 

the economy, and that federal funds tend to permanently relieve the hardship caused by such events. 

Nevertheless, this position lacks scientific validity, to the extent that these events can have longerlasting effects than what is assumed by popular opinion. 

Economists Solomon Hsiang and Amir Jina use data from 6,700 cyclones between 1950 and 

2008 and address the following question: Do atmospheric events have more permanent, that is, nontransitory, effects on the economy? Their conclusion is that they do: “The data reject hypotheses that 

disasters stimulate growth or that short-run losses disappear following migrations or transfers of 

wealth.”7Geography influences economic development, at least in the initial conditions and the design 

of institutions to mitigate or reduce the vulnerability of growth. The conclusions of the 

aforementioned economists are:

• Cyclones (hurricanes) arise more frequently than financial, banking, and other crises, over the 

same population.

• After a strong hurricane, there is no immediate recovery, and its effects can last up to 20 years.

• Both wealthy and poor countries are affected. There is no distinction.

7

Solomon M. Hsiang and Amir S. Jina, The Causal Effect Of Environmental Catastrophe On Long-Run Economic 

Growth: Evidence From 6,700 Cyclones, NBER Working Paper 20352 (July 2014).

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• Greater losses are suffered in countries that have less experience with cyclones.

• Two decades later, the pattern of income reduction is 7.4% of the real GDP per capita. 

• The growth of the GDP remains depressed for 15 years, taking the affected economy out of a 

positive-growth trend. 

• In 1 out of 10 cyclones, the growth of per capita income in the affected country drops by 7% 

during the two subsequent ones.

• The total impact of 4,174 cyclones from 1950 to 2008 had the effect of reducing the global 

GDP by 1.27%.

Effect on income per capita Years for recovery

Temperature Increase (+1 degree Celsius) a/ -1.0% 10

Civil War -3.0% 10

Tax increase -3.1% 4

Standard Deviation Cyclones -3.6% 20

Banking Crisis -7.5% 10

Financial Crisis -9.0% 2

a/ poor countries

The 2017 Hsiang and Houser article, using the Hsiang-Jina model,8 arrives at the same conclusion: 

“[The effects of Hurricane María] could lower Puerto Rican incomes by 21 percent over the next 15 

years — a cumulative $180 billion in lost economic output.”9 We can conclude that a hurricane, such 

as Hurricane María, which is uncommon and powerful, had effects on the long-term growth of an 

economy already experiencing problems of secular growth. 

8

Solomon Hsiang and Trevor Houser, Don’t Let Puerto Rico fall into Economy Abyss, New York Times (29 sept 

2017).

9

Ibid.

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Impropriety of Structural Reforms under the IMF and WB Framework 

The structural reforms presented in all of the CFP lack a relevant and transparent outline that 

would allow us to understand, without any room for doubt, the premises, postulates, and econometric 

measurements used to arrive at these growth rates for each one of the reforms. As a question of fact, 

in each of the Certified Fiscal Plans previously presented, these growth values are changed without 

providing any explanation whatsoever. They seem to be merely speculative numbers with no scientific 

substance. It has been acknowledged that the labor reform, which was deemed to be structural in 

nature and necessary to foster growth, has done the exact opposite. 

The structural reforms that the IMF faces from a neoliberal philosophy are based on three 

interrelated pillars: 

1. External opening or liberalization in the functioning of markets;

2. Impulse to privatization, PPP and other private-sector initiatives instead of government; 

3. Deregulation of main markets.

Regarding external openness, there is a constant mention of the need for the allocation and 

mobilization of resources to conform to the guidelines of the international market. Privatization 

corresponds to institutional changes that tend to reduce the space occupied by the State in economic 

and financial matters. This is achieved by transferring from public companies to the private sector 

through transfer or sale of public companies or co-participation in strategic services or physical output. 

Finally, the IMF is in favor of deregulation in the functioning of markets, which is equivalent to 

restricting the regulatory capacity and functions of the State.

Examples of such structural reforms include measures that (i) maintain low inflation and given 

manageable fiscal and current account balances, (ii) promote competition and trade openness; (iii) 

improve a country’s business environment by enforcing contracts and rule of law, enhancing the 

quality of public bureaucracy, and minimizing corruption; (iv) ensure the safety and soundness of 

financial institutions; (v) enhance labor productivity by providing infrastructure capital; and (vi) 

promote equality of opportunity to access public services.

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The estimated impact of structural reforms is based on work by the International 

Monetary Fund on labor reforms implemented in Europe (e.g., Spain and Estonia) and 

South America (e.g., Peru and Colombia), among other jurisdictions; utilities reform 

in Latin America; broadly accepted metrics for measuring improvement in the World 

Bank’s Doing Business Rankings (as well as examples of growth experienced by 

countries that have implemented such reforms) and education reforms in Europe and 

elsewhere. Structural reform benchmarks, to the extent possible, come from 

nations or jurisdictions with constraints similar to Puerto Rico’s (e.g., limited 

monetary policy options and high informal labor markets).

 

Reforms related to power sector / energy and ease of doing business are projected to 

increase GNP by 0.60% by FY2026. Human capital and welfare reform is expected to 

add another 0.15% in FY2025. K-12 education reforms should add another 0.01% 

annual impact beginning in FY2037, resulting in total GNP increase from structural 

reforms of 0.75% by FY2026 and 0.91% by FY2052. (CFP, Vol. 2, Page 10, Section 

2.3)(emphasis added).

Meanwhile, the experience in Latin America has not been addressed entirely by the FOMB, especially 

the issue of the expected growth and prices of the GNP, due to that energy reform.

Summary of the Proposed Effects of the Structural Reforms 

Economists Martín Guzmán and Daniel Santamaría presented a comprehensive picture of the 

proposed effects of IMF and WB type of structural reforms on the growth of the GNP in Puerto Rico.10

Table 6 and Graph 6 set forth the results contained in their presentation. I summarize them as follows:

1. The cumulative effect of the impact of these reforms is increasingly less over time. 

2. The three 2018 Certified Fiscal Plans showed greater optimism toward the effects on growth 

than subsequent ones, starting in 2019. In the 2018 Commonwealth Certified Fiscal Plan, the 

ultimate cumulative effect reached 1.8 additional growth percentage points. In the 2021, 2022 

and 2023 Commonwealth Certified Fiscal Plan, it barely reached a percentage point. 

Specifically, it was 0.75.

3. The effects seem to be split up into two groups. First, the three from 2018, and second, from 

2019. They suspect that the effects of Hurricanes Irma and María add pessimism to the 

ultimate effect of these reforms.

10 Martín Guzmán y Daniel Santamaría, Overview of Puerto Rico’s fiscal, debt and growth policies, Espacios 

Abiertos (2023).

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4. These results validate that Puerto Rico isn’t going through a cyclical problem, but through 

secular stagnation. 

5. Nevertheless, it continues to be true that the Board’s fiscal plans lack a technical and 

transparent explanation of how these results were reached. 

Table 6 Cumulative Effects of Structural Reforms

Graph 6

One-Size- Fits-All Prescriptions Addressed by Structural Reform 

Jonathan D. Ostry, Prakash Loungani and Davide Furceri, in Neoliberalism: Oversold?, stated 

with regard to such neoliberalism: “Instead of delivering growth, some neoliberal policies have 

increased inequality, in turn, jeopardizing durable expansion.”11 For instance, the capital flow 

liberalization has provoked additional crisis. 

Since 1980, there have been about 150 episodes of surges in capital inflows in more 

than 50 emerging market economies; [...] about 20 percent of the time, these 

episodes end in a financial crisis, and many of these crises are associated with large 

output declines. Furthermore, according to a paper cited by Furceri and Loungani 

11 Jonathan D. Ostry, Prakash Loungani and Davide Furceri, Neoliberalism: Oversold? Finance & Development, 

International Monetary Fund (June 2016). 

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(2015), the effects of such financial openness on inequality are much higher when a 

crash ensues.12 (citations and quotation marks omitted).

The other issue addressed is fiscal austerity. The authors stated:

Austerity policies not only generate substantial welfare costs due to supply-side 

channels, they also hurt demand—and thus worsen employment and unemployment. 

The notion that fiscal consolidations can be expansionary (that is, raise output and 

employment), in part by raising private sector confidence and investment, has been 

championed by, among others, Harvard economist Alberto Alesina, in the academic 

world, and by former European Central Bank President Jean-Claude Trichet, in the 

policy arena. However, in practice, episodes of fiscal consolidation have been 

followed, on average, by drops rather than by expansions in output.

13 (emphasis 

added).

The authors raised overwhelming results: (a) “the benefits of some policies that are an 

important part of the neoliberal agenda appear to have been somewhat overplayed;”14 (b) “the case 

of fiscal consolidation, the short-run costs in terms of lower output and welfare and higher 

unemployment have been underplayed, and the desirability for countries with ample fiscal space of 

simply living with high debt and allowing debt ratios to decline organically through growth is 

underappreciated.”15

Final Words About the Structural Reforms (SR) 

1. SRs have historically centered on independent countries capable of pursuing fully institutional 

financial and economic power and, ultimately, a decision-making process, with little influence 

from external institutions. SR have been endorsed and pursued by the WB, along with IMF 

adjustment policies. The recipe leads to fiscal, financial, and economic trouble.

2. There is a clear-cut distinction between cyclical and structural problems. The latter are those 

economic problems concerning total-factor productivity and the path of long-term potential 

growth and development. 

12 Ibid.

13 Ibid.

14 Ibid.

15 Ibid.

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3. Established in the late 1940’s, the IMF is the institution in charge of maintaining international 

macroeconomic stability during short-term payment imbalances. The WB’s role has been planned 

adjustment lending, limiting itself to giving advice on macroeconomic policies. 

4. Since the late 1970’s, the United States has been a principal force in imposing structural 

adjustment programs (SAPs) on the governments of the global South (Welsh 2005).16 Such reforms 

seem to be more ideologically centered than economically based, concerning distribution. 

5. According to a group of well-known economists, the European Union and Central Asia have been 

experiencing secular stagnation.17 In an era of secular stagnation, this has become a major 

concern in Europe and Central Asia, as growth has been stagnating, mainly because growth in 

advanced economies has been subdued. 

6. As a result of weaker than expected activity in the European Union, the pace of growth in the 

region’s developing countries has also decelerated and has not yet fully recovered from the 

slowdown that followed the global financial crisis, which reveals the weakness of the underlying 

structural bases. 

7. Furthermore, the forecast points to further deceleration—more pronounced in Central Europe 

and the Baltics, due, not only to the tight connections with European Union economies, but also 

to the region’s own worsening demographic trends and minimal growth in productivity and 

investments.18

8. Puerto Rico is a territory of the U.S. with no power to pursue an endogenous economic policy, as 

opposed to many independent countries within a framework of integration. Even the FOMB was 

a direct imposition of Congress, with little influence from the local government and legislature.

Puerto Rico lacks economic sovereignty. The dollar is its currency. federal regulators oversee 

16 Carol Welch, Structural Adjustment Programs & Poverty Reduction Strategy, Institute for Policy Studies 

https://ips-dc.org/structural_adjustment_programs_poverty_reduction_strategy/ (October 12, 2005).

17 Lawrence H. Summers, Accepting the Reality of Secular Stagnation, 

https://www.imf.org/en/Publications/fandd/issues/2020/03/larry-summers-on-secular-stagnation (March

2020)

18 Welch, op. cit.

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its businesses. federal laws dictate its trade policy. Residents of Puerto Rico pay most federal 

taxes. This amounted to $3.6 billion dollars in 2016. However, Puerto Ricans generally do not 

pay federal income tax, and they continue to enjoy the tax exemptions that have historically 

incentivized outside investment.

9. SRs are more ideological than economical. They are biased toward free-market and laissez faire

recipes, undermining government influence on fiscal, monetary, and public-enterprise

management decisions.

10. SR policies required strongly shaped government institutions that had previously enhanced and 

built an efficient market with strong support for growth and equity. 

11. SRs have been focused on a GDP/GNP-measuring framework. Therefore, they have mainly relied 

on growth/non-growth assessments. Considerations of welfare measures, such as the Index of 

Sustainable and Economic Welfare, Genuine Economic Progress, etc., are not accounted for. These 

measures indicate increases in welfare and equity, rather than blind-senseless GDP growth. 

12. The FOMB has welcomed SR in the fiscal and financial crisis of the Commonwealth, with no other 

scientific methodology to understand the crisis systematically. SR are not, and have never been, a 

cure-for-all remedy. 

The Appropriate Paradigm: Secular Stagnation for the Economy of Puerto Rico. 

“But, whereas business-cycle theory treats depression as a temporary, though recurring phenomenon, 

the theory of secular stagnation brings out the possibility that depression may become the normal 

condition of the economy.”

19

The Macroeconomic Framework of Secular Stagnation. 

Traditional macroeconomics books ordinarily portray that aggregate economic activity 

experiences recurring hikes and downswings. Business cycles have recurrent, but non-periodic, 

19 Harris, Seymour E. (1943). (1897-1974) (Harvard, A.B., 1920; Ph. D., 1926), former Littauer Professor of Political 

Economy at Harvard. Cited in Postwar Economic Problems. New York, London, McGraw Hill Book Co., p. 67–82, 

Chapter IV - Secular Stagnation by Alan Sweezy.

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22

patterns. These macroeconomic fluctuations are built-in features of the capitalist system but are also 

explained by the dynamic nature of changes in population, ageing, consumption, investment, 

innovation technology, among other factors. A recession or depression is a temporary phenomenon. 

It only momentarily interrupts the road to economic prosperity. With such an ordinary economic 

approach, the recovery (expansion) of economic activity is always a given. The only concern is how to 

identify the expansive factor, or combination of factors, that triggers progressive variables. This, in 

turn, is helped by an array of tools pursuant to the country’s monetary and fiscal policies.

Nowadays, there are three prominent concepts under the more recent macroeconomic 

approach: the business cycle, balance-sheet recession, and secular stagnation. Some economists 

argue that the recovery of the European economy is not only slow and fragile due to the presence of 

a financial cycle and balance-sheet-recession effects, but also due to stagnation in economic growth, 

accompanied by strong deflationary trends.

Secular stagnation is a thesis contrary to the traditional view of economic cycles, to some 

extent, because it is part of the theory of complex systems. Secular stagnation conforms to 

contemporary currents of the theory of complex systems or Economics of Complexity. Within this 

paradigm, the explosion of unpredictable economic shocks proved to be impossible to resolve, or 

reduce, through the classical and neo-classical theory. Under the secular-stagnation thesis, economic 

factors are combined into an intricate network of mechanisms that make crisis complex, and at the 

same time, extend it throughout perverse dynamics that render the monetary and fiscal policies of 

traditional macroeconomics unsuccessful. It is the inability to move toward a steady state of growth 

or achieving macroeconomics potentially. Thus, secular stagnation refers to "a condition of negligible, 

or no economic, growth in a market-based economy."20 

Below is the checklist to determine the existence of secular stagnation:

1. Rising saving rate in the economy from domestic or external sources;

20 Summer, op. cit.

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2. Massive decline in investment rate due to the lack of attractive gainful opportunities;

3. Autonomous slowing of population growth due to lower fertility rate and high outflow 

migration;

4. Increasing longevity that induces lower savings rate due to life cycle pattern;

5. Under-consumption trend attributable to functional inequality of income distribution; 

[Deceleration of real consumption]

6. Declining trend in the value of capital goods [property values];

7. The insensitivity of economic growth to technological innovation due to its proper range of 

adaptation or range of applicability; 

8. Shrinking of the economic scale and scope; and,

9. Lower long-run trend of real sustainable economic growth.

The hypothesis of secular stagnation arose contemporaneously through the intervention of economist 

and former Harvard University President Lawrence Summers, quoting the original concept established 

by economist Alvin Hansen in the 1930s. At the end of the 1930s, the economy of the United States 

and other developed nations underwent slow population growth, coupled with the absence of 

technological innovation. Thus, developed economies were experiencing prolonged stagnation and 

did not have a clear path to recovery on the horizon. However, the post-Second World-War boom 

invigorated the level of investment and technological innovation, which led to recurring, strong 

prosperity through to the onset of the great recession in 2007.

An important element of the secular-stagnation analysis is to assess the long-term trend. It is 

well-known that time series contain three components: a) a secular trend; b) cyclical movements; and 

c) a seasonal component. The secular-trend component is indicative of the economy’s potential 

capacity for long-term movement, and it can be adjusted to assess secular stagnation, if it exists. The 

secular trend underlying structural factors, such as changes in productivity, changes in demographic 

circumstances, consumption patterns, institutional framework, and flexibility, among others. This 

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24

component includes the underlying strength that the local economy has for long-term sustainable 

recovery. 

Graphs 7 and 8 show the secular trend of the real GNP growth in Puerto Rico and the United 

States, from 1948 to 2022. Graph 7 depicts the trend of long-term growth in Puerto Rico, using the 

Hordick-Prescott filter. You can see that both the real-GNP-growth trend and the real-GDP-growth 

trend between 1948 and 1975 was between 2% and 8% annually. Between 1975 and 2005, it was 

between 2% and 5%. However, from 2006 onward, it was negative. This indicates that the positive 

growth of 1% to 2% presented by the Commonwealth and its officers are not sustainable and are, to 

a great extent, the result of an influx of federal funds. There is no evidence of sustained recovery, to 

the extent that the long-term trend does not demonstrate it. Graph 7 illustrates that Puerto Rico’s 

long-term growth is -2%; while the United States economy is between 1% and 2%. 

Moreover, in Graph 8, we compare the long-term growth trend in Puerto Rico and the United 

States. You can see that the United States is experiencing a declining growth trend. It drops from 4% 

to below 2%, but it continues to be on a positive trajectory. Puerto Rico, on the other hand, has not 

been experiencing a positive trajectory, but a negative trajectory, since 2016. 

Graph 7

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Graph 8

The Economy of Sustainable Energy and its Effects on Long-Term Economic Growth. 

Energy as the Engine of Development and Growth 

Energy is a vital part of a country’s sustained growth. The system must have technical 

attributes of resilience, effectiveness, operational productivity, advanced technology, generalized 

accessibility and a relatively low cost, comparable to the people’s purchasing power. The energy 

system must be considered a provider of an essential service and a human right at the same time. 

Furthermore, energy has occupied an important place in the debate about business competitiveness. 

Thus, industrial policy considers energy costs to be very relevant, just as any factor that 

disproportionately increases the burden of production costs and has harmful effects on the 

competitiveness of industry and commerce. It is also relevant to the welfare of families in terms of 

their consumption burden. 

The Importance of PREPA 

In Puerto Rico, the supply model of electrical energy services relies entirely on PREPA. Up until 

2021, PREPA was a publicly owned monopoly, but with some components of cogeneration associated 

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26

with private companies. Today, two PPPs have been integrated to privatize the operation 

management of PREPA’s two main components: the Transmission and Distribution System and the 

Legacy Generation Assets. These private companies are LUMA Energy and GeneraPR. It is important 

to recognize that PREPA is a high value asset and attractive investment prospect for any foreign or 

local private company. According to The American Public Power Association (APPA),21 among, about 

2,000 public utilities in the United States, PREPA has the following rankings:

• Total Generation (2020) Net Megawatts: 11,324,336 Rank number 8: 

• Total Electric Revenues (2020) Net Megawatts: $3,233,430 Rank number 4: 

• Total Customers (2020): 1,477,167 Rank number 1: 

• Total Sales (2020) Megawatts-hours: 16,035,294 Rank number 9: 

An Unsustainable PREPA 

Graphs 9 and 10 show PREPA’s total revenues, the average kWh cost, and the consumption 

of electrical energy in Puerto Rico. This shows that PREPA has been faced with a demand for energy 

that has been shrinking since 2006 (“peak year of local long-lasting stagnation”), while PREPA’s 

revenues experience ups and downs associated with the cost of the kWh. These graphs suggest that 

for PREPA to have greater revenues, the determining factor is to increase kWh costs for the industrial, 

commercial, and residential sectors, because kWh consumption is not a determining factor to obtain 

greater revenues. Nevertheless, a greater kWh cost leads to lower consumption through three effects: 

a) the price effect (law of demand); b) the replacement effect (switching to renewable energy); and c) 

the energy conservation effect (more energy-saving equipment). Even in a hypothetical framework 

where PREPA is able to reduce the cost of the kWh, its revenues will be lower, because there is no 

forecast whatsoever that supports an increase in energy consumption, quite the contrary. 

21

 See 2022 PUBLIC POWER STATISTICAL REPORT, https://www.publicpower.org/resource/public-powerstatistical-report. 

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The problem that this distinction in PREPA leads to is that over the past 16 years, during which the 

demand for electrical energy has been shrinking constantly, PREPA has assumed, and will assume, 

responsibilities that commit PREPA revenues, which didn’t used to exist, such as:

1. LUMA Energy LLC: Operational Fees, Incentives, Pass-Through Expenditures, and Inflation 

Adjustment.

2. GeneraPR LLC: Operational Fees, Incentives, and Pass-Through Expenditures.

3. Restructured debt servicing. 

The two PPPs—LUMA and GeneraPR—did not release PREPA from any costs and expenses. PREPA has 

to pay fixed fees for the operations of these PPPs and all of their expenses in the passthrough 

expenditures. These PPPs do not contribute capital investment or pay for operational expenses. They 

are managers of the operations, and they charge for that.

Graph 9

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Graph 10

Moreover, well-known Citigroup investment banker David Brownstein clearly stated before the Title 

III Court that increases in the kWh cost rising quicker than the (real or nominal) economic growth rate 

are not acceptable for Puerto Rico’s economy.22 Puerto Rico’s economy must recover sustainably, so 

that economic activity in and of itself will allow higher kWh costs to be withstood. Graph 11 presents 

three indexes of growth: 1) the cost of the kWh, 2) nominal GNP, and 3) real GNP (2000 prices). It 

demonstrates that between 2000 and 2022, the cost of the kWh underwent greater increases than 

both the nominal GNP and the real GNP. 

Graph 11

22 Case No. 17-03283-LTS, Doc #:7816, Brownstein Declaration. DECLARATION OF DAVID BROWNSTEIN IN 

SUPPORT OF JOINT MOTION OF PUERTO RICO ELECTRIC POWER AUTHORITY AND AAFAF PURSUANT TO 

BANKRUPTCY CODE SECTIONS 362, 502, 922, AND 928, AND BANKRUPTCY RULES 3012(A)(1) AND 9019 FOR 

ORDER APPROVING SETTLEMENTS EMBODIED IN THE RESTRUCTURING SUPPORT AGREEMENT

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The Critical Threshold of the Cost of the kWh 

In this section, I will evaluate what is referred to as the critical or threshold cost of the kWh, 

which is the value of the cost that makes a country’s economic growth become negative. I will refer 

to this value as the threshold cost. To that effect, we must acknowledge that this value will be different 

for each country, and that it would be inappropriate to extrapolate the same to other countries. 

The threshold cost is determined through ideal and objective statistical methods, so that the 

researcher’s value judgment does not intervene in such determination. In turn, it is analyzed through 

the concept of separation from other factors that affect the growth rate in the short- and the mediumterm, such as, for example, federal funds, internal fixed-capital investment, exportation levels, among 

other factors that can affect economic growth. In other words, the Latin phrase commonly used in 

economics, ceteris paribus, is used here. This refers to other factors that are constant or excluded 

from the analysis. Such threshold-cost analysis reveals the weight that the particular factor exclusively 

has on growth, excluding from consideration any other factors that affect growth. 

The pioneers in this type of estimate-simulation were economists Julio C. Hernández and 

Wilfredo Toledo (2014), who concluded, and I quote: “you can see how Puerto Rico’s real GNP shrinks 

after the price of the kilowatt hour reaches the threshold of $0.12. This could imply that the country’s 

economic structure has experienced problems when it has been faced with prices higher than this 

one.”

23 (emphasis added)(our translation). The authors add that “the local electrical system, the 

changes associated with the bankruptcy, and the restructuring of PREPA’s debt, do not seem to 

consider kWh costs lower than this threshold of $0.12 per kWh hour. The price (cost) of the kWh is 

higher than $0.22 per kWh, and there is no indication that this cost will be reduced in the foreseeable 

future.”24 (emphasis added)(our translation).

23 Economía de Puerto Rico: El efecto del precio del kilovatio hora en la economía de Puerto Rico [Puerto Rico’s 

Economy: The Effect of the Price of the Kilowatt Hour on the Economy of Puerto Rico. Julio C. Hernández Correa, 

Ph.D. and Wilfredo Toledo, Ph.D. August 2014, Volume II, No. 5. Economic Summary of Puerto Rico. Planning 

Board,https://www.researchgate.net/publication/330507798_El_efecto_del_precio_del_kilovatio_hora_en_la_

economia_de_Puerto_Rico. 

24 Ibid.

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Moreover, the economist hired by the FOMB, Andrew Wolfe, in his sworn declaration before 

the Title III Court, argued the following, and I quote:

I analyzed what the impact on real economic growth would be if the automatic stay is 

lifted, a receiver is appointed, and PREPA’s electricity rates are increased. As set out 

in its Fiscal Plan, PREPA’s current rate is $0.198 per kilowatt-hour (“kWh”). I 

concluded that raising PREPA’s blended rate to anything over $0.214 per kWh (that 

is, any increase in excess of $0.016 per kWh to the current rate) would greatly 

increase the risk of reducing economic growth below the minimum amount of real 

economic growth necessary for Puerto Rico to achieve fiscal and debt sustainability.

25 (emphasis added).

 

Therefore, Wolfe argued that the critical cost is $0.21. 

Upon review of this value, this economist estimates the relationship between the real GNP at 

1954 prices and the cost of the kWh between 2010 and 2022. This relationship is established through 

a third-degree polynomial model, which reveals that the new threshold cost is $0.16 kWh. In this 

sense, we can establish that a threshold cost below $0.16 per kWh is one that capitalizes Puerto Rico’s 

economy and leads it to positive growth, as opposed to a cost above $0.16 cents. The Table below 

shows the effects of the cost of the kWh on the real growth of Puerto Rico’s economy. For example, a 

cost of $0.12 per kWh in itself has an effect on growth of 3.7% , ceteris paribus. On the other hand, a 

cost above the threshold cost of $0.22 cents has an effect of -1.4%, ceteris paribus. See Graphs 12 and 

13.

25 Case No. 17-04780-LTS, Doc#:149-2 Exhibit B Wolfe Declaration. DECLARATION OF ANDREW WOLFE IN 

SUPPORT OF OPPOSITION OF THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO TO 

THE MOTION OF THE AD HOC GROUP OF PREPA BONDHOLDERS, et al. 

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Graph 12

Graph 13

It is clear that there are several conclusions about the threshold cost. However, the four economists 

cited above recognize its existence. Furthermore, they admit that there is a critical value that 

jeopardizes the sustainability of Puerto Rico’s economy. This is an important issue for this discussion 

and for the sustainability of Puerto Rico’s economy, its businesses, and competitiveness at a local, 

regional, and international level. 

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The Interindustry Effect of Energy 

Economists Ruiz & Zalacaín were pioneers in producing estimates of total energy 

requirements for Puerto Rico’s economy. 26 The total energy requirements were estimated for 53 

sectors, using the input-output matrix analysis. This study demonstrated that a large percentage of 

industries in Puerto Rico can be greatly affected by an increase in the price of energy resources. 

Moreover, William Ríos Rodríguezshowsindustries with high local and total energy multipliers, having 

identified the 25 sectors that are most sensitive to energy consumption.

27

• 2120: Mining (except oil and gas) 

• 2130: Other Mining Products 

• 2211: Electricity and Irrigation Services 

• 2213: Water and Sewer Services 

• 3113: Sugar and Related Products, 

Fruit and Vegetable Preserves and 

Special Foods 

• 3130: Textile Products 

• 3140: Other Textile Products 

• 3241: Oil and Other Related Products 

• 3252: Plastic Materials, Resins and 

Synthetic Fibers 

• 3256: Soaps, Detergents and Cleaning 

Products 

• 3261: Plastic Products 

• 3310: Metal Products 

• 3340: Computer and Electronic 

Products 

• 4840: Land Transport 

• 4860: Pipeline Transport 

• 4880: Transportation Services

• 4920: Messenger Services 

• 4930: Warehouse Services 

• 5150: Broadcasting 

• 5241: Brokerage Services 

• 5413: Engineer and Architect Services 

• 5415: Computerized Design and 

Related Services

• 5417: Scientific Research Services

• 7110: Arts, Sports Spectators 

• 7120: Museums, Historical Sites

Ríos Rodriguez finds that 17 of the 25 sectors that are significantly related to electrical energy contain 

a relatively high production multiplier. This means that if there is a positive stimulus from the energy 

sector, which is transferred to other industries through a significant increase in their production. 

Examples of sectors that could have an important effect on production are the Oil Sector (3241) with 

a multiplier of 2.85; the Plastic Materials, Resins and Fibers Sector (3252) with a multiplier of 2.77; and 

the Metal Products Sector (3310) with a multiplier of 2.88.

26 Ruiz, A. L., & Zalacaín, F. (1977). Energy and Economic Development in Puerto Rico: An Input-Output Approach. 

Caribbean Studies, 17(3/4), 115–136, http://www.jstor.org/stable/25612815.

27 Ríos-Rodríguez, W. (2019) Relación entre el consumo energético y el crecimiento económico en Puerto Rico 

(1976-2017): Análisis econométrico y de insumo-producto [Relationship Between Energy Consumption and 

Economic Growth in Puerto Rico (1976-2017): Econometric and Input-Output Analysis. Master’s Degree Thesis, 

Department of Economics of the UPR, Rio Piedras Campus. 

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Econometric Procedures 

Below, I will present the econometric procedures that allow us to evaluate the sustainability 

of the economy in the long run, as a result of the implementation of the Legacy Charge. Elasticities are 

calculated in accordance with kWh cost forecasts for Puerto Rico. These are presented in the 

Appendix. 

The Equation System 

This model uses six equations to model the behavior of Puerto Rico’s economy, Hacienda revenues 

and PREPA revenues. The objective is to estimate the elasticities of critical or independent variables 

and dependent variables, such as the real GNP, energy consumption, net revenues to the General 

Fund and PREPA’s total Revenues. Let us look at Chart 2.

Chart 2

There are six equations, and each equation is filled with variables that simultaneously intervene in 

others. In all of these, the trend value is incorporated quadratically and, furthermore, the variables 

are converted into natural logarithms.

1. Equation 1 is the Cobb-Douglas macroeconomic production function.

Human capital Capital Stock,adj Residential Industrial Commercial Residential Industrial Commercial Residential IndustrialCommercial Population real GNP 

Production Function

Dependent Variable

 GNP real X X X X X

Demand of Energy

Dependent Variable

Consumption kWh Residential X X X

Consumption kWh Industrial X X X X

Consumption kWh Commercial X X X

Net Revenue Collection

 Net Revenue General Funds X X

PREPA Revenues

Dependent Variable

 Revenues from PREPA X X X X X X X X X X

Energy Consumption (Mill kWh) Cost per kWh (Cents) Customers PREPA

Independent Variables (Exogenous)

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2. Equations 2, 3 and 4 measure the behavior of the demand for energy consumption in kWh, 

which will affect PREPA’s gross revenues.

3. Equation 5 is the explanation for net revenues to the general fund, which is used to look at 

the feasibility of certified fiscal plans and the payment of debt serve and Pay Go Pensions; and

4. Equation 6 models PREPA’s gross revenues, with respect to the consumption estimated and 

forecasted through Equations 2, 3 and 4.

Modeling is necessary to see how the Legacy Charge could affect the real GNP and affect the demand 

for electrical energy in the residential, industrial, and commercial sectors. 

The Legacy Charge affects the cost per kWh because it adds an additional layer to this cost. 

We know that the cost per kWh is a result of PREPA’s operations, but the Legacy Charge is not. 

Although the Legacy Charge is not the result of PREPA’s operations, it affects residential, commercial, 

and industrial customers. 

Table 7 Legacy Charge in the Plan of Adjustment 

The Logic of Causal-Effect relationships 

The econometric estimate of these six equations allows us to estimate the particular 

elasticities of the related variables, which will allow us to have estimates of the ultimate effects of this 

Legacy Charge over a 30-year period. Chart 3 presents the causal logic between mechanisms, 

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technological and economic relations, and variables to be potentially affected. An increase in 

electricity rates increases the retail price of electricity for the various sectors, leading to a lower 

demand in kWh. This can be due to the price effect, replacement effect or energy conservation effect. 

Such lower demand affects the level of the real GNP and PREPA’s revenues. The reduction of the real 

GNP is, in turn, affected by the shrinking population and the effect of a lower demand for energy. The 

ultimate effect falls upon net revenues to the General Fund. 

Chart 3

In all of these, I used the concept of elasticities. The elasticity between variable X and variable 

Y is the change in percentage in variable Y, due to a change of 1% in variable X. For example, if elasticity 

is 2.00, this implies that a 1% change in variable X generates a 2% change in variable Y. The direction 

that the changes move in is recognized by the sign of the elasticity coefficient, whether it is negative 

or positive. If it is positive, both variables, X and Y, move together. If it is negative, they move in 

opposite directions. The coefficient of elasticity ε x, y is defined as follows:

ε x, y =

Δ%y

Δ% x

Legacy Charges

Hybrid tariffs increases

Price-demand elasticities

Lower demand energy Lower PREPA 

by sectors Revenues

Output-energy elasticities

Effects over real GNP Population decreased

Output-net revenue elasticity

Effects over Net Revenues

Hacienda

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Equation 1 is the Production Function.

Q = f(H

α

,K

μ

,Erπ,Eiφ, Ec∆

)

Where:

Q= real GNP prices 2000, millions of dollars.

H = Human capital of Puerto Rico; yearly employment times labor augmented by year of schooling 

and life expectancy. 

K = Capital Stock, adjusted using the U.S. rate of utilization. Estimated by the perpetual inventory 

equation. 

Er = Consumption of kWh, millions of kWh, residential sector.

Ei = Consumption of kWh, millions of kWh, industrial sector.

Ec = Consumption of kWh, millions of kWh, commercial sector.

α, μ, π, φ y ∆ are the coefficients of elasticities, once the equation is converted to logarithms.

Equations 2, 3 and 4 are the equation for kWh demand in the residential, industrial and commercial 

sectors, respectively. 

DkWh = f(CostkWh

α

, Customersσ, real GNPψ )

Where:

DkWh = Consumption of kWh, millions of kWh; residential, industrial, and commercial.

CostkWh = Cents per kWh.

Customers = Number of PREPA customers.

Real GNP = Gross National Product, 2000 prices, millions of dollars.

α, σ and ψ are elasticity values, when equations were converted into logarithm values. 

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Equation 5 is the Net Revenue Collection of General Funds.

NRGF = f(Real GNPα, Populationσ )

Where:

NRGF = Net Revenue to General Funds, million current dollars.

Real Personal Consumption = Real GNP, millions of 2000 prices.

Population = Population in Puerto Rico.

μ, σ are elasticities of NRGF with respect to each independent variable.

Equation 6 is:

RPREPA = f(CostkWh

α

, Customersσ, real GNPψ )

Where:

RPREPA= Revenues of PREPA, millions of dollars.

CostkWh = cents per kWh.

Customers = Customers of PREPA.

Real GNP = Real Gross National Product, 2000 prices.

α, σ, ψ are elasticities of PREPA Revenues with respect to each independent variable.

It is of paramount importance to realize that all six equations were tested and run under diverse 

combinations to provide the best fitted models and parameters. We used E-Views software under OLS 

modifications under co-integration procedures. 

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Results of Models 

Production Function: Equation 1

The elasticities of the real GNP to changes in kWh consumption by sector are:

Residential..................... 0.0914 (adjusted by 70% non-exempted customers; 30% exempted). 

Commercial .................. 0.5274 

Industrial........................ 0.1029 

The value came from a Fully Modified Cointegration Regression (FMOLS) using E-Views software. 

 

 

 

The Demand for Energy by Sector: 

Equation 2: Demand for Energy in Residential Sector

 

 

 

Dependent Variable: LOG( real GNP, 2000)

Method: Fully Modified Least Squares (FMOLS)

Sample (adjusted): 2001 2022

Cointegrating equation deterministics: C @TREND @TREND^2

Long-run covariance estimate (Bartlett kernel, Newey-West fixed bandwidth = 3.0000)

 

Independent Vars K H Er Ec Ei Constant Trend Trend^2

Coefficient 0.005094 0.299941 0.09136 0.5274 0.10285 1.006948 0.0042 -0.000207

Prob. 0.9528 0.085 0.3483 0.0188 0.42 0.4803 0.5592 0.5804

Italic significant at 5%

R-squared Adjusted R-squared S.E. of regression Long-run variance

0.969048 0.953571 0.01785 0.000151

Dependent Variable: LOG(DkWh_RESIDENCIAL)

Method: Canonical Cointegrating Regression (CCR)

Sample (adjusted): 2001 2022

Cointegrating equation deterministics: C @TREND @TREND^2

Long-run covariance estimate (Bartlett kernel, Newey-West fixed bandwidth = 3.0000)

Customers Residential CostkWh Real Personal Consumption Constant @TREND @TREND^2

Coefficient 1.60923 -0.039455 0.581153 -10.89438 -0.03744 0.000825

Prob. 0.0026 0.6001 0.103 0.1641 0.011 0.1264

Italic significant at 5%

R-squared Adjusted R-squared S.E. of regression Long-run variance

0.616429 0.496563 0.042652 0.001032

Case:17-04780-LTS Doc#:3427-1 Filed:05/01/23 Entered:05/01/23 15:22:43 Desc:

Exhibit EXPERT REPORT OF JOS ISRAEL ALAMEDA LOZADA Page 47 of 88

Case:17-03283-LTS Doc#:24530-10 Filed:06/12/23 Entered:06/12/23 17:45:09 Desc:

Exhibit 10 Page 47 of 94
39

Equation 3: Demand for Energy in Industrial Sector

 

 

Equation 4: Demand for Energy in Commercial Sector

The elasticities of energy consumption in kWh in relation to kWh costs (Price-Demand Elasticities) 

Residential......................... -0.0709 (adjusted to 70%, residential, non-exempted); 

Industrial ........................... - 0.0728

Commercial ...................... -0.3158

 

 

 

 

 

 

Dependent Variable: LOG(DkWh Industrial_MKWH_)

Method: Canonical Cointegrating Regression (CCR)

Sample (adjusted): 2001 2022

Cointegrating equation deterministics: C @TREND @TREND^2

Long-run covariance estimate (Bartlett kernel, Newey-West fixed bandwidth = 3.0000)

CostkWh Consumption per customer Real GNP Constant @TREND @TREND^2

Coefficient -0.044534 -0.122299 1.31439 -5.506696 -2.84E-02 4.36E-05

Prob. 0.43500 0.37160 0.00020 0.08010 0.09840 0.9504

Italic significant at 5%

R-squared Adjusted R-squared S.E. of regression Long-run variance

0.985653 0.98117 0.040799 0.000904

Dependent Variable: LOG(DkWh COMERCIAL)

Method: Fully Modified Least Squares (FMOLS)

Sample (adjusted): 2001 2022

Cointegrating equation deterministics: C @TREND @TREND^2

Long-run covariance estimate (Bartlett kernel, Newey-West fixed bandwidth = 3.0000)

Customers CostkWh Constant @TREND @TREND^2

Coefficient 0.876163 -0.031575 -1.260988 0.023523 -0.001152

Prob. 0.0316 0.3873 0.7754 0.0001 0

R-squared Adjusted R-squared S.E. of regression Long-run variance

0.94195 0.928291 0.01823 0.000346

Case:17-04780-LTS Doc#:3427-1 Filed:05/01/23 Entered:05/01/23 15:22:43 Desc:

Exhibit EXPERT REPORT OF JOS ISRAEL ALAMEDA LOZADA Page 48 of 88

Case:17-03283-LTS Doc#:24530-10 Filed:06/12/23 Entered:06/12/23 17:45:09 Desc:

Exhibit 10 Page 48 of 94
40

Equation 5: General Fund Net Revenue Equation

The elasticities of General Fund Net Revenues in Relation to the Real GNP: 

Elasticity of General Fund Net Revenues in relation to Real GNP = 0.3075

 

 

 

Equation 6: PREPA Revenues 

The Elasticities of PREPA Revenues are:

Total Consumption.............................. 0.821185

Total cost per kWh .............................. 0.922722

Dependent Variable: LOG(INGNETFGHP)

Method: Dynamic Least Squares (DOLS)

Cointegrating equation deterministics: C @TREND @TREND^2

Fixed leads and lags specification (lead=1, lag=-1)

Long-run variance estimate (Bartlett kernel, Newey-West fixed bandwidth = 3.0000)

Real GNP Population Constant @TREND @TREND^2

Coefficient 0.307496 -0.159099 8.02805 0.003158 0.000731

P Value 0.00 0.13 0.00 0.01 0.00

Italic significant at 5%

R-squared Adjusted R-squared S.E. of regression Long-run variance

0.997249 0.996602 0.007066 5.36E-05

Dependent Variable: LOG(Revenues PREPA_Mill $_)

Method: Fully Modified Least Squares (FMOLS)

Sample (adjusted): 2001 2022

Cointegrating equation deterministics: C @TREND @TREND^2

Long-run covariance estimate (Bartlett kernel, Newey-West fixed bandwidth = 3.0000)

CostkWh ConsumptionKWH Constant @TREND @TREND^2

Coeff. 0.922722 0.821185 -2.681302 0.012995 -0.00053

Prob. V 0.000 0.000 0.0485 0.0131 0.01

Italic significant at 5%

R-squared Adjusted R-squared S.E. of regression Long-run variance

0.991546 0.989556 0.024137 0.000361

Case:17-04780-LTS Doc#:3427-1 Filed:05/01/23 Entered:05/01/23 15:22:43 Desc:

Exhibit EXPERT REPORT OF JOS ISRAEL ALAMEDA LOZADA Page 49 of 88

Case:17-03283-LTS Doc#:24530-10 Filed:06/12/23 Entered:06/12/23 17:45:09 Desc:

Exhibit 10 Page 49 of 94
41

Simulations and scenarios 

Production Function: Equation 1 

The effects of lower energy consumption, due to PREPA’s higher rate level (base-forecast) on 

the real GNP of Puerto Rico; ceteris paribus. As we can see, the greater the cost of the kWh, the greater 

the effects it has on energy consumption. The greater the rate increase represented by the Legacy 

Charge, the greater the simulation of the real GNP. If the Legacy Charge in general, resulted in an 

increase of 3 c/kWh, the average annual reduction of the real GNP is -1.53% and the median is -1.44%. 

On the other hand, if the Legacy Charge resulted in an increase of 5.5 c/kWh, the effect is -2.32 on the 

annual growth of the Real GNP in Puerto Rico. 

Table 8

Graph 14

Level of cost kWh + legacy charges 3.0 3.5 4.0 4.5 5.0 5.5

Real GNP (2000 prices- base 2022 $39,820 $39,820 $39,820 $39,820 $39,820 $39,820

2023 $38,979 $38,839 $38,699 $38,558 $38,418 $38,278

2024 $38,233 $37,972 $37,711 $37,452 $37,193 $36,935

2025 $37,486 $37,106 $36,729 $36,354 $35,982 $35,613

2026 $36,768 $36,277 $35,791 $35,309 $34,833 $34,361

2027 $36,071 $35,475 $34,887 $34,306 $33,733 $33,168

2028 $35,393 $34,697 $34,012 $33,339 $32,676 $32,025

2029 $34,730 $33,938 $33,162 $32,401 $31,655 $30,924

2030 $34,078 $33,195 $32,333 $31,489 $30,666 $29,861

2031 $33,438 $32,468 $31,523 $30,602 $29,706 $28,832

2032 $32,809 $31,756 $30,732 $29,739 $28,774 $27,838

2033 $32,189 $31,055 $29,957 $28,895 $27,867 $26,873

2034 $31,579 $30,368 $29,200 $28,074 $26,987 $25,939

2035 $30,980 $29,696 $28,462 $27,275 $26,134 $25,037

2036 $30,395 $29,042 $27,745 $26,503 $25,312 $24,171

2037 $29,823 $28,404 $27,049 $25,754 $24,518 $23,337

2038 $29,260 $27,779 $26,368 $25,025 $23,746 $22,529

2039 $28,712 $27,172 $25,710 $24,322 $23,005 $21,755

2040 $28,172 $26,576 $25,066 $23,636 $22,284 $21,006

2041 $27,643 $25,993 $24,437 $22,970 $21,586 $20,282

2042 $27,125 $25,426 $23,827 $22,325 $20,913 $19,586

2043 $26,620 $24,873 $23,236 $21,702 $20,264 $18,918

2044 $26,127 $24,336 $22,662 $21,099 $19,638 $18,275

2045 $25,644 $23,811 $22,104 $20,514 $19,034 $17,656

2046 $25,173 $23,301 $21,562 $19,948 $18,451 $17,061

2047 $24,713 $22,803 $21,036 $19,401 $17,888 $16,489

2048 $24,263 $22,320 $20,526 $18,872 $17,346 $15,939

2049 $23,826 $21,850 $20,033 $18,361 $16,825 $15,412

2050 $23,397 $21,391 $19,552 $17,866 $16,320 $14,904

Level of cost kWh + legacy charges 3.0 3.5 4.0 4.5 5.0 5.5

Rate of Growth -Real GNP forecast

Average-2023 to 2050 per year -1.53% -1.71% -1.89% -2.04% -2.19% -2.32%

Median - 2023 to 2050 per year -1.44% -1.60% -1.75% -1.88% -1.99% -2.09%

Case:17-04780-LTS Doc#:3427-1 Filed:05/01/23 Entered:05/01/23 15:22:43 Desc:

Exhibit EXPERT REPORT OF JOS ISRAEL ALAMEDA LOZADA Page 50 of 88

Case:17-03283-LTS Doc#:24530-10 Filed:06/12/23 Entered:06/12/23 17:45:09 Desc:

Exhibit 10 Page 50 of 94
42

Results Equations 2, 3 and 5 

Demand for Energy: All Sectors 

Table 9

Graph 15

Net Revenues to General Funds 

Table 10

Graph 16

Year 3.00 3.5 4.0 4.5 5.0 5.5

2023 15,638.1 15,586.2 15,534.3 15,482.3 15,430.4 15,378.5

2024 15,355.9 15,256.9 15,157.9 15,058.9 14,959.9 14,860.9

2025 15,067.7 14,920.7 14,773.7 14,626.7 14,479.7 14,332.7

2026 15,073.2 14,927.1 14,781.0 14,634.9 14,488.8 14,342.7

2027 14,793.7 14,601.0 14,408.3 14,215.7 14,023.0 13,830.3

2028 14,516.4 14,277.5 14,038.6 13,799.8 13,560.9 13,322.0

2029 14,517.1 14,278.3 14,039.6 13,800.8 13,562.0 13,323.2

2030 14,240.4 13,955.6 13,670.7 13,385.8 13,100.9 12,816.0

2031 13,963.4 13,632.3 13,301.2 12,970.2 12,639.1 12,308.0

2032 13,963.0 13,631.9 13,300.8 12,969.6 12,638.5 12,307.4

2033 13,684.0 13,306.3 12,928.7 12,551.1 12,173.4 11,795.8

2034 13,404.5 12,980.3 12,556.1 12,131.9 11,707.6 11,283.4

2035 13,404.0 12,979.7 12,555.5 12,131.2 11,706.9 11,282.6

2036 13,125.6 12,655.0 12,184.3 11,713.6 11,242.9 10,772.2

2037 12,848.0 12,331.1 11,814.1 11,297.1 10,780.2 10,263.2

2038 12,847.3 12,330.2 11,813.1 11,296.0 10,778.9 10,261.8

2039 12,570.9 12,007.8 11,444.7 10,881.5 10,318.4 9,755.2

2040 12,293.7 11,684.4 11,075.0 10,465.7 9,856.3 9,247.0

2041 12,293.7 11,684.4 11,075.1 10,465.7 9,856.4 9,247.1

2042 12,017.6 11,362.3 10,706.9 10,051.5 9,396.2 8,740.8

2043 11,743.0 11,041.9 10,340.8 9,639.7 8,938.6 8,237.4

2044 11,744.3 11,043.4 10,342.5 9,641.6 8,940.7 8,239.8

2045 11,471.7 10,725.4 9,979.1 9,232.7 8,486.4 7,740.0

2046 11,200.7 10,409.2 9,617.7 8,826.2 8,034.6 7,243.1

2047 11,202.0 10,410.7 9,619.4 8,828.1 8,036.8 7,245.5

2048 10,933.8 10,097.8 9,261.9 8,425.9 7,589.9 6,753.9

2049 10,667.8 9,787.5 8,907.2 8,026.9 7,146.5 6,266.2

2050 10,668.4 9,788.2 8,908.0 8,027.8 7,147.5 6,267.3

Years 3.0 3.5 4.0 4.5 5.0 5.5

2023 $11,893 $11,893 $11,893 $11,893 $11,893 $11,893

2024 $11,823 $11,812 $11,800 $11,788 $11,777 $11,765

2025 $11,752 $11,729 $11,706 $11,682 $11,659 $11,636

2026 $11,683 $11,648 $11,614 $11,579 $11,544 $11,510

2027 $11,615 $11,569 $11,523 $11,478 $11,432 $11,387

2028 $11,548 $11,491 $11,435 $11,378 $11,322 $11,266

2029 $11,481 $11,414 $11,347 $11,280 $11,213 $11,147

2030 $11,415 $11,337 $11,259 $11,182 $11,106 $11,029

2031 $11,349 $11,261 $11,173 $11,085 $10,999 $10,912

2032 $11,284 $11,185 $11,087 $10,989 $10,893 $10,797

2033 $11,218 $11,109 $11,001 $10,893 $10,787 $10,682

2034 $11,153 $11,033 $10,915 $10,798 $10,682 $10,568

2035 $11,087 $10,958 $10,830 $10,704 $10,578 $10,454

2036 $11,023 $10,884 $10,746 $10,610 $10,476 $10,343

2037 $10,959 $10,810 $10,663 $10,518 $10,375 $10,233

2038 $10,896 $10,737 $10,581 $10,427 $10,275 $10,125

2039 $10,833 $10,665 $10,500 $10,337 $10,176 $10,018

2040 $10,770 $10,593 $10,419 $10,247 $10,078 $9,912

2041 $10,708 $10,522 $10,338 $10,158 $9,981 $9,807

2042 $10,646 $10,451 $10,259 $10,070 $9,885 $9,703

2043 $10,586 $10,381 $10,181 $9,984 $9,791 $9,601

2044 $10,525 $10,312 $10,103 $9,899 $9,698 $9,501

2045 $10,465 $10,244 $10,027 $9,814 $9,606 $9,402

2046 $10,406 $10,176 $9,951 $9,731 $9,516 $9,305

2047 $10,348 $10,110 $9,877 $9,649 $9,426 $9,209

2048 $10,290 $10,044 $9,803 $9,568 $9,339 $9,114

2049 $10,233 $9,979 $9,731 $9,489 $9,252 $9,022

2050 $10,176 $9,914 $9,659 $9,410 $9,167 $8,930

Case:17-04780-LTS Doc#:3427-1 Filed:05/01/23 Entered:05/01/23 15:22:43 Desc:

Exhibit EXPERT REPORT OF JOS ISRAEL ALAMEDA LOZADA Page 51 of 88

Case:17-03283-LTS Doc#:24530-10 Filed:06/12/23 Entered:06/12/23 17:45:09 Desc:

Exhibit 10 Page 51 of 94
43

Results 

Equation 6: PREPA Revenues 

Table 11

Graph 17

The Scenario with Estimated Legacy Charges 

In this section, I will estimate the equations system, but with a given c/kWh Legacy Charge. The Legacy 

Charge considered is estimated as follows:

Table 12

This Legacy Charge c/kWh is a weighted average arrived at using PREPA’s 2021 consumption data for 

each sector. The results are as follows: 

Fiscal Years 3.0 3.5 4.0 4.5 5.0 5.5

2023 $4,131 $4,126 $4,120 $4,115 $4,110 $4,105

2024 $4,102 $4,092 $4,082 $4,072 $4,062 $4,052

2025 $4,102 $4,092 $4,081 $4,071 $4,061 $4,051

2026 $4,073 $4,058 $4,043 $4,028 $4,013 $3,998

2027 $4,073 $4,058 $4,044 $4,029 $4,014 $3,999

2028 $4,045 $4,026 $4,006 $3,986 $3,967 $3,947

2029 $4,045 $4,026 $4,006 $3,987 $3,967 $3,947

2030 $4,017 $3,993 $3,969 $3,944 $3,920 $3,896

2031 $4,017 $3,993 $3,969 $3,944 $3,920 $3,896

2032 $3,989 $3,960 $3,931 $3,902 $3,873 $3,844

2033 $3,989 $3,960 $3,931 $3,902 $3,873 $3,844

2034 $3,960 $3,927 $3,893 $3,859 $3,826 $3,792

2035 $3,960 $3,927 $3,893 $3,859 $3,826 $3,792

2036 $3,932 $3,894 $3,855 $3,817 $3,778 $3,740

2037 $3,932 $3,894 $3,855 $3,817 $3,779 $3,740

2038 $3,904 $3,861 $3,818 $3,775 $3,731 $3,688

2039 $3,904 $3,861 $3,818 $3,775 $3,732 $3,689

2040 $3,876 $3,828 $3,780 $3,733 $3,685 $3,637

2041 $3,876 $3,828 $3,780 $3,733 $3,685 $3,637

2042 $3,848 $3,795 $3,743 $3,691 $3,638 $3,586

2043 $3,848 $3,796 $3,743 $3,691 $3,638 $3,586

2044 $3,820 $3,763 $3,706 $3,649 $3,592 $3,535

2045 $3,820 $3,763 $3,706 $3,649 $3,592 $3,535

2046 $3,793 $3,731 $3,670 $3,608 $3,546 $3,485

2047 $3,793 $3,731 $3,670 $3,608 $3,547 $3,485

2048 $3,766 $3,700 $3,634 $3,567 $3,501 $3,435

2049 $3,766 $3,700 $3,634 $3,568 $3,502 $3,436

2050 $3,739 $3,668 $3,598 $3,527 $3,457 $3,386

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

$5,500

20002002200420062008201020122014201620182020

Base 2022

20232025202720292031203320352037203920412043204520472049

Total Revenues to PREPA: Historical and Forecast 

3.0 3.5 4.0

4.5 5.0 5.5

Type Fixed charge Volumetric Total Charge

Residential 0.0165 0.0041 0.0205

Commercial 0.0186 0.0158 0.0344

Industrial 0.0039 0.015 0.0189

Case:17-04780-LTS Doc#:3427-1 Filed:05/01/23 Entered:05/01/23 15:22:43 Desc:

Exhibit EXPERT REPORT OF JOS ISRAEL ALAMEDA LOZADA Page 52 of 88

Case:17-03283-LTS Doc#:24530-10 Filed:06/12/23 Entered:06/12/23 17:45:09 Desc:

Exhibit 10 Page 52 of 94
44

The Effect on the Real GNP 

Table 13

Graph 18

The Effect on the Demand for Energy 

Table 14

Graph 19

FY Real GNP FY Real GNP Forecast

2000 $41,419 2024 $38,039

2001 $44,169 2025 $37,204

2002 $44,862 2026 $36,403

2003 $46,521 2027 $35,628

2004 $49,142 2028 $34,876

2005 $50,076 2029 $34,141

2006 $50,322 2030 $33,421

2007 $49,713 2031 $32,716

2008 $48,259 2032 $32,025

2009 $46,445 2033 $31,344

2010 $44,785 2034 $30,677

2011 $44,031 2035 $30,022

2012 $44,031 2036 $29,386

2013 $44,207 2037 $28,764

2014 $43,429 2038 $28,154

2015 $43,075 2039 $27,562

2016 $42,389 2040 $26,980

2017 $41,020 2041 $26,410

2018 $39,277 2042 $25,854

2019 $40,114 2043 $25,314

2020 $38,834 2044 $24,787

2021 $39,232 2045 $24,272

2022 $39,820 2046 $23,771

2023 $38,875 2047 $23,282

2048 $22,807

2049 $22,345

2050 $21,893

Fiscal Years Industrial Commercial Residential All Sum

2023 1,862 6,890 6,851 15,603

2024 1,855 6,617 6,829 15,301

2025 1,848 6,349 6,807 15,004

2026 1,841 6,096 6,786 14,724

2027 1,835 5,857 6,765 14,456

2028 1,828 5,628 6,744 14,201

2029 1,822 5,410 6,723 13,954

2030 1,816 5,199 6,702 13,717

2031 1,809 4,997 6,681 13,487

2032 1,803 4,802 6,661 13,265

2033 1,796 4,613 6,640 13,049

2034 1,790 4,432 6,619 12,841

2035 1,784 4,258 6,598 12,639

2036 1,777 4,091 6,578 12,446

2037 1,771 3,931 6,557 12,260

2038 1,765 3,777 6,537 12,079

2039 1,758 3,631 6,517 11,906

2040 1,752 3,489 6,497 11,738

2041 1,746 3,353 6,477 11,576

2042 1,740 3,223 6,457 11,419

2043 1,734 3,099 6,437 11,269

2044 1,728 2,980 6,417 11,124

2045 1,722 2,865 6,398 10,985

2046 1,716 2,756 6,378 10,850

2047 1,710 2,652 6,359 10,720

2048 1,704 2,552 6,340 10,596

2049 1,698 2,456 6,321 10,476

2050 1,692 2,365 6,302 10,359

Consumption kWh (million kWh)

Case:17-04780-LTS Doc#:3427-1 Filed:05/01/23 Entered:05/01/23 15:22:43 Desc:

Exhibit EXPERT REPORT OF JOS ISRAEL ALAMEDA LOZADA Page 53 of 88

Case:17-03283-LTS Doc#:24530-10 Filed:06/12/23 Entered:06/12/23 17:45:09 Desc:

Exhibit 10 Page 53 of 94
45

The Effect on Net Revenues to General Fund 

Table 15

Graph 20

The Effect on PREPA Revenues 

Table 16

Graph 21

In addition to the Legacy Charge, the CFP includes an increase in c/kWh to cover the costs of PREPA’s 

PayGo Trust. This increase would be an additional 2.4 c/kWh. 

FY Net Revenue to GF FY Net Revenue to GF

2000 $6,944 2024 $11,178

2001 $6,962 2025 $11,102

2002 $7,454 2026 $11,029

2003 $7,842 2027 $10,957

2004 $7,985 2028 $10,885

2005 $8,306 2029 $10,815

2006 $8,541 2030 $10,745

2007 $8,863 2031 $10,675

2008 $8,359 2032 $10,606

2009 $7,710 2033 $10,536

2010 $7,716 2034 $10,467

2011 $8,158 2035 $10,399

2012 $8,667 2036 $10,331

2013 $8,502 2037 $10,264

2014 $9,037 2038 $10,197

2015 $8,961 2039 $10,131

2016 $9,175 2040 $10,065

2017 $9,335 2041 $10,000

2018 $9,313 2042 $9,935

2019 $11,376 2043 $9,871

2020 $9,289 2044 $9,808

2021 $11,688 2045 $9,745

2022 $11,327 2046 $9,683

2023 $11,252 2047 $9,622

2048 $9,562

2049 $9,502

2050 $9,443

FY Revenues PREPA FY Revenues PREPA

2000 $1,796 2024 $4,089

2001 $2,329 2025 $4,017

2002 $2,159 2026 $3,944

2003 $2,489 2027 $3,875

2004 $2,572 2028 $3,807

2005 $2,982 2029 $3,741

2006 $3,687 2030 $3,676

2007 $3,672 2031 $3,613

2008 $4,202 2032 $3,550

2009 $4,146 2033 $3,488

2010 $4,093 2034 $3,428

2011 $4,339 2035 $3,368

2012 $5,033 2036 $3,309

2013 $4,880 2037 $3,251

2014 $4,619 2038 $3,195

2015 $4,174 2039 $3,139

2016 $3,246 2040 $3,085

2017 $3,403 2041 $3,031

2018 $3,450 2042 $2,979

2019 $3,498 2043 $2,927

2020 $3,551 2044 $2,877

2021 $3,128 2045 $2,828

2022 $4,163 2046 $2,779

2023 $4,123 2047 $2,732

2048 $2,686

2049 $2,641

2050 $2,597

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46

The Effect on Real GNP 

Table 17

Graph 22

The Effect on Demand for Energy 

Table 18

Graph 23

FY W/O 2.4 cents With 2.4 cents Gap 

Real GNP Real GNP

2023 $38,875 $38,202 -$673

2024 $38,039 $36,796 -$1,243

2025 $37,204 $35,414 -$1,791

2026 $36,403 $34,108 -$2,295

2027 $35,628 $32,865 -$2,763

2028 $34,876 $31,677 -$3,199

2029 $34,141 $30,534 -$3,607

2030 $33,421 $29,432 -$3,989

2031 $32,716 $28,369 -$4,347

2032 $32,025 $27,343 -$4,682

2033 $31,344 $26,348 -$4,996

2034 $30,677 $25,387 -$5,289

2035 $30,022 $24,461 -$5,562

2036 $29,386 $23,572 -$5,813

2037 $28,764 $22,719 -$6,045

2038 $28,154 $21,894 -$6,260

2039 $27,562 $21,105 -$6,457

2040 $26,980 $20,342 -$6,637

2041 $26,410 $19,607 -$6,803

2042 $25,854 $18,901 -$6,954

2043 $25,314 $18,224 -$7,090

2044 $24,787 $17,574 -$7,212

2045 $24,272 $16,950 -$7,322

2046 $23,771 $16,351 -$7,420

2047 $23,282 $15,775 -$7,507

2048 $22,807 $15,224 -$7,583

2049 $22,345 $14,695 -$7,649

2050 $21,893 $14,187 -$7,706

W/O 2.4 cents With 2.4 cents Gap 

Demand Energy Demand Energy

2023 15,603 15,345 -$258

2024 15,301 14,834 -$467

2025 15,004 14,343 -$661

2026 14,724 13,891 -$832

2027 14,456 13,471 -$985

2028 14,201 13,078 -$1,122

2029 13,954 12,709 -$1,245

2030 13,717 12,361 -$1,356

2031 13,487 12,031 -$1,456

2032 13,265 11,720 -$1,545

2033 13,049 11,424 -$1,625

2034 12,841 11,144 -$1,697

2035 12,639 10,879 -$1,761

2036 12,446 10,629 -$1,817

2037 12,260 10,394 -$1,866

2038 12,079 10,170 -$1,909

2039 11,906 9,959 -$1,947

2040 11,738 9,759 -$1,979

2041 11,576 9,568 -$2,007

2042 11,419 9,388 -$2,032

2043 11,269 9,217 -$2,052

2044 11,124 9,055 -$2,069

2045 10,985 8,901 -$2,083

2046 10,850 8,755 -$2,095

2047 10,720 8,617 -$2,104

2048 10,596 8,485 -$2,111

2049 10,476 8,359 -$2,116

2050 10,359 8,239 -$2,120

Case:17-04780-LTS Doc#:3427-1 Filed:05/01/23 Entered:05/01/23 15:22:43 Desc:

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47

The Effect on Net Revenues to the General Fund 

Table 19

Graph 24

The Effect on Revenues to PREPA 

Table 20

Graph 25

W/O 2.4 cents With 2.4 cents Gap 

Net Revenue to GF Net Revenue to GF

2023 11,252 11,199 -$53

2024 11,178 11,072 -$106

2025 11,102 10,944 -$158

2026 11,029 10,820 -$209

2027 10,957 10,699 -$258

2028 10,885 10,580 -$306

2029 10,815 10,462 -$352

2030 10,745 10,346 -$398

2031 10,675 10,231 -$444

2032 10,606 10,118 -$488

2033 10,536 10,004 -$532

2034 10,467 9,892 -$575

2035 10,399 9,781 -$618

2036 10,331 9,672 -$659

2037 10,264 9,564 -$699

2038 10,197 9,458 -$739

2039 10,131 9,353 -$778

2040 10,065 9,249 -$816

2041 10,000 9,146 -$854

2042 9,935 9,045 -$890

2043 9,871 8,945 -$926

2044 9,808 8,847 -$961

2045 9,745 8,750 -$995

2046 9,683 8,655 -$1,028

2047 9,622 8,562 -$1,061

2048 9,562 8,470 -$1,092

2049 9,502 8,379 -$1,123

2050 9,443 8,290 -$1,153

Fiscal W/O 2.4 cents With 2.4 cents Gap 

Year Revenues to PREPA Revenues to PREPA

2023 $4,123 4,100 -$23

2024 $4,089 4,037 -$52

2025 $4,017 3,915 -$102

2026 $3,944 3,794 -$151

2027 $3,875 3,679 -$196

2028 $3,807 3,569 -$238

2029 $3,741 3,463 -$278

2030 $3,676 3,360 -$316

2031 $3,613 3,261 -$352

2032 $3,550 3,164 -$386

2033 $3,488 3,070 -$418

2034 $3,428 2,978 -$449

2035 $3,368 2,889 -$478

2036 $3,309 2,803 -$506

2037 $3,251 2,719 -$532

2038 $3,195 2,638 -$556

2039 $3,139 2,560 -$579

2040 $3,085 2,484 -$601

2041 $3,031 2,410 -$621

2042 $2,979 2,339 -$640

2043 $2,927 2,269 -$658

2044 $2,877 2,203 -$674

2045 $2,828 2,138 -$690

2046 $2,779 2,076 -$704

2047 $2,732 2,016 -$717

2048 $2,686 1,957 -$729

2049 $2,641 1,901 -$740

2050 $2,597 1,847 -$750

Case:17-04780-LTS Doc#:3427-1 Filed:05/01/23 Entered:05/01/23 15:22:43 Desc:

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48

Conclusions 

Puerto Rico’s economy is going through structural problems, not cyclical. Puerto Rico is facing 

secular stagnation which implies a non-growth capacity in the long run. The analysis and information 

contained in the Certified Fiscal Plans demonstrate this secular stagnation. First, real GNP growth 

projections rarely achieve over 1% growth. See CFP, Exhibit 7, page 17. Second, the Commonwealth 

will face a deficit from 2026 without any sign of a surplus growth path. See CFP, Exhibit 10, page 20. 

Finally, federal funds have maintained a temporary and non-sustained short-term growth from 2016 

to the present. See CFP, Exhibit 3, page 15. Thus, Puerto Rico’s economy is not sustainable, and it has 

no competitiveness in the long term. To make matters worse, the Legacy Charge imposed in PREPA’s 

Plan of Adjustment, as I conclude in my report, has a negative impact, not just for PREPA, but for the 

economy in general, since a decrease in the economic activity translates into less collections for the 

Commonwealth’s General Fund. 

As such, the proposed Legacy Charge has a bigger impact on the industrial and commercial 

sectors, but also affects the welfare of Puerto Rico’s residents. The rate increases of the Legacy Charge 

deviate from the threshold cost, estimated at $0.16, and project an increase without converging with 

that threshold cost. Furthermore, the Legacy Charge deviates from the theories of other economists, 

including the Board’s own expert Andrew Wolfe, who estimated a threshold cost of $0.21. This has a 

perverse effect on industrial sectors that make up Puerto Rico’s economy.

Using six (6) equations, this study demonstrates that the Legacy Charge has a negative effect 

on the real growth of the Puerto Rican economy in the long term. It will also affect demand for kWh 

in industrial sectors, inducing decreased consumption. This decrease translates into fewer revenues 

for the Commonwealth’s general fund, which risks compliance with the debt service obligations of the 

Commonwealth Plan of Adjustment. Furthermore, the reduction in energy demand will make PREPA’s 

operations unsustainable, particularly when we consider PREPA’s new revenue engagements through

the PPPs, such as LUMA and GeneraPR.

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49

Because “feasibility” means and refers to compliance with Section 314(b)(6) of PROMESA as 

interpreted by the Title III Court, it includes that the debtor entity can both pay its post-petition debt 

and provide future public services at a level necessary to its viability. See In re Fin. Oversight & Mgmt. 

Bd., 637 B.R. 223, 302-03 (D.P.R. 2022). Electricity is not just an essential service; it is a human right. 

If PREPA cannot sustain its operations, it cannot provide future public services as necessary. 

The imposition of the Legacy Charge, with or without the additional $0.024 per kWh for the 

PayGo payments, creates a burden to Puerto Rico residents, as well as the industrial and commercial 

sector, which decreases revenue for the Commonwealth. Moreover, the payment of the 

Commonwealth restructured debt, PayGo pension payments and the transfers to the Commonwealth 

Trust Fund, in addition to the effects of the Legacy Charge, make the CPF unsustainable, as seen in 

Table 21.

Table 21 Source: 2022 Commonwealth Certified Fiscal Plan, page 320.

Fiscal Year W/O 2.4 cents With 2.4 cents Debt Services Pensions Trust Sum W/O 2.4 cents With 2.4 cents

Net Revenue to GF Net Revenue to GF Re-estructured Pay Go Pension No CV % Net Revenue % Net Revenue

2023 11,252 11,199 $1,150 $2,350 $1,000 $4,500 40.0% 40.2%

2024 11,178 11,072 $1,150 $2,352 $1,000 $4,502 40.3% 40.7%

2025 11,102 10,944 $1,150 $2,347 $1,000 $4,497 40.5% 41.1%

2026 11,029 10,820 $1,150 $2,338 $1,000 $4,488 40.7% 41.5%

2027 10,957 10,699 $1,150 $2,326 $1,000 $4,476 40.9% 41.8%

2028 10,885 10,580 $1,150 $2,317 $1,000 $4,467 41.0% 42.2%

2029 10,815 10,462 $1,150 $2,309 $1,000 $4,459 41.2% 42.6%

2030 10,745 10,346 $1,150 $2,300 $1,000 $4,450 41.4% 43.0%

2031 10,675 10,231 $1,150 $2,291 $1,000 $4,441 41.6% 43.4%

Note 3 Amounts in million $, except %.

The last two columns of Table 21 show the percentage of projected revenues destined to pay debt 

service, PayGo pension payments and the Commonwealth Trust Fund. In the scenario where the 

additional $0.024 kWh is not included, by 2031, the percentage of projected revenue increases from 

40% to 41.6%. In the alternate scenario, including the additional increase, by 2031 the projected 

percentage increases from 40.2% to 43.4%. By 2031, there would be between 60% and 57% available 

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50

revenue to cover essential services, among the other expenses that need to be covered with the 

General Fund. 

In conclusion, the imposition of the Legacy Charge makes all the assumptions established in 

the CFP unsustainable and with them the ability of the Commonwealth to pay debt service pursuant 

to its own Plan of Adjustment.

I declare under penalty of perjury that the foregoing is true and correct to the best of my 

knowledge, information, and belief.

______________________

José I. Alameda Lozada, Ph.D.

April 28, 2023

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ANNEX 2

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1

JOSE ISRAEL ALAMEDA LOZADA; Ph.D.; Economist and economic planner

Bechara # 411, Villa Sultanita, Mayagüez, Puerto Rico, 00680 Cel. (787) 309-9046

Up-dated July 2020. E Mail: joseialameda@gmail.com

PERSONAL INFORMATION

EDUCATION: Ph.D. Economics,1996, The University of Wales, 

Aberystwyth, Wales, United Kingdom.

 Master in Arts, Economics, 1983.

 Rutgers University, New Brunswick

 New Jersey, United States

 Master in Planning, 1976.

 University of Puerto Rico

 Graduate School of Planning

 Río Piedras, Puerto Rico 

 Business Administration, B.B.A., 1972. 

 University of Puerto Rico

 Mayagüez, Puerto Rico

FIELD OF INTEREST: International Trade, Economics of Finance, Econometrics, Energy Economics, 

Economic Development, Money and Banking, Health Economics, Managerial Economics, Comparative 

Economics, Business Cycles and Forecasting, Torts and Injury damages.

CLASSES TAUGHT: Macroeconomics and Microeconomics, Managerial Economics, Comparative 

Economics Systems, Mathematics for Economists, Economic Development of Puerto Rico, International 

Trade and Finances, Business Cycles.

LANGUAGE: Spanish and English 

PROFESSIONAL EXPERIENCE 

Professional Planner Certified (Lic. #256), inactive. 

1998 up to now- Full Professor in Economics, Department of Economics, UPR at Mayagüez.

1992--1997--Associate Professor, Department of Economics, University of Puerto Rico, Mayagüez.

1993-1994 -- Economic Advisor of the Chamber of Commerce of Puerto Rico-Western 

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2

JOSE ISRAEL ALAMEDA LOZADA -2-

2014—FULL PROFESSOR UPR MAYAGUEZ

2014---Planning Board economic consultant—Strategic Plan of Development for Puerto Rico—Retail 

Trade, Wholesale Trade and Transportation and Warehousing Sectors. 

1992- present—Researcher and consultant in cases of Forensic Economics. 

1986-at present, Consultant in Economics and Planning, the Commonwealth Planning Board of Puerto

Rico.

1986-87, Consultant in Economics, Economic Development Administration, 

U.S. Department of Commerce

 

1984-85, Instructor, Department of Finance, University of Puerto Rico, Río Piedras Campus.

1984-86, Associate Research, Center for Business Research

Department of Business Administration, U.P.R. Rio Piedras, Puerto Rico.

1983-84, Special Commission for the Development of Puerto Rico 

Senate of Puerto Rico.

1983, Consultant for the Master Plan for the Development of Aguadilla,

CEMI, Inc;.

1982-83, Instructor, Department of Economics, Mayagüez campus.

1981-82, Visiting Lecturer, Puerto Rican Studies, 

Livington College, Rutgers University, Piscataway, New Jersey

1980-81, Teaching Assistant, Livington College.

1980, Teaching Assistant, Rutgers University.

1976-79, Instructor, Department of Economics and Business Administration Interamerican University of 

Puerto Rico 

1974-75, Research Assistant, Logic Research Inc., Santurce, Puerto Rico.

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3

JOSE ISRAEL ALAMEDA LOZADA -3-

RESEARCH EXPERIENCE AND PUBLICATIONS

(Many papers and research excluded)

Books:

1. La Economía del Diario Vivir: análisis económico de los asuntos públicos cotidianos desde el 

deporte, la organización política y el status de Puerto Rico. Editorial Búsqueda. July, 2005.

2. Ensayos en Economía Aplicada: análisis y medición del impacto social, político y económico 

de las instituciones sobre la economía de Puerto Rico: octubre del 2005

3. La Vivienda de Interés Social en Puerto Rico, libro realizado para el Departamento de la 

Vivienda, co-autor Profesor Carlos Rivera Galindo. 2005. Printed by Advance Graphic Printing, 

Chicago, IL.

4. Index of Sustainable and Economic Welfare (ISEW) for Puerto Rico, Publisher at Instituto 

Tropical de Economía, Ambiente y Sociedad. (ITEAS). with Dr. Ivonne Díaz Rodríguez. 2009.

5. La Politica Neoliberal en Puerto Rico y la Ley Numero 7: Impacto y consecuencias 

socioeconómicas: Años fiscales 2009 al 2011-- with Lic. Daniel Garavito- Medina. Editial Situm.

6. Propuesta para una Nueva Estrategia de Desarrollo para Puerto Rico: Sustentabilidad, 

Equidad y Seguridad Social: with Colectivo de Economistas Universitarios (with A. Gonzalez, 

Jeffrey Valentin Mari, Jose Toral, José Garcia y Myrna Comas Pagán, Editorial Situm, 2013.

Research and Studies:

An Analysis of the Transmission of Real and Monetary Shocks on the Economy of Puerto Rico from 

United States. Ph. D. Thesis. University of Wales, United Kingdom.1996.

Energy Substitutability in the Manufacturing Sector of Puerto Rico. M.A. Thesis at Rutgers 

University, 1983.

.

"La fuga de capital humano de la economía de Puerto Rico: reto a la década actual", paper delivered at the 

annual meeting of South Eastern Council of Latin American Studies (SECOLAS) in San Juan, Puerto Rico. 

1984.(with W. Ruiz Oliveras).Published in: Revista de Ciencias Sociales, Enero-Junio 1985, Núm. 1-2, 

Vol. XXIV, págs. 3-34. 

"Análisis exploratorio de la emigración de profesionales en Puerto Rico: el caso de los ingenieros". (with 

W. Ruiz Oliveras). Revista de Administración Pública. Vol XVII, núm. 1, October 1984.

"Technology Dependency and Energy Substitutability in Small, Open, and Petroleum-Importing 

Developing Economy: The Case of Puerto Rico" (with Arthur Mann). Journal of Economic Development, 

Vol 9, Núm. 1. July 1984.

“The Effects of Banking Deregulation on Savings and Loans Industry of Puerto Rico". Paper delivered at 

the Third Annual Meeting of Economists Association of Puerto Rico. (with C. Rivera Galindo). Puerto 

Rico Business Review. November 1985, Vol. 10, No.11, pp. 6-11.

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JOSE ISRAEL ALAMEDA LOZADA -4-

"The International Indebtedness Position of the United States and its Effect on the Economy of Puerto 

Rico". Puerto Rico Business Review. December 1985, Vol 10, No. 12 pp. 9-12.

"A New Phase of Banking Deregulation: Who's Afraid of Deposit Rates Ceiling Removal?" 1986. Center 

of Business Research, Business Administration Department, University of Puerto Rico at Rio Piedras.

 

"Energy Price Shocks, Input Prices Changes and Development Implications: A Translog Model Applied 

to Puerto Rico" Journal of Development Studies, 25(3), April 1989. Institute of Economic Development. 

University of Sussex, Brighton, United Kingdom.

“Impacto Económico de los Juegos Olímpicos del 2004 en Puerto Rico: un análisis preliminar”: 20 de 

septiembre de 1992, para la Comisión Por Sede Juegos Olímpicos del 2004. Hato Rey.

"Análisis Económico del SIDA en Puerto Rico" (Economic Impact of AIDS in Puerto Rico"). paper 

delivered in Second American Congress of Public Health. San Juan, August 3-5, 1989, (with Alfredo 

González). 

 

"Análisis Económico del SIDA en Puerto Rico"(Economic Impact of AIDS in Puerto Rico" Delivered also 

at the Eighth Congress of Econometrics, Royal Society of Econometrics, San José, Costa Rica, August 3-5, 

1988. Published in: FACTUM, 2(3) pp. 8-19 Journal of Bar of Lawyers in Puerto Rico (Colegio de 

Abogados de P.R.)

"Market Concentration in Services of Puerto Rico Depository Institutions: Is it getting better?". Puerto Rico 

Business Review, 12(12). December 1987. 5-10.

"Análisis del Impacto Económico del SIDA en Puerto Rico"(with .González).107-122. El SIDA en Puerto 

Rico: Acercamientos Multidisciplinarios (editors I. Cunnigham, Ramos Belido and Ortiz Colón). Institute 

of Caribbean Studies. University of Puerto Rico, Río Piedras. 1992.

“Las fluctuaciones económicas y la incidencia criminal en Puerto Rico: Un análisis espectral”. Ceteris 

Paribus. Revista de Investigaciones Socio-Económicas,. Vol. I, Núm. 1, abril 1991. with Alfredo González.

Department of Economics, U.P.R. at Mayagüez.

“Is Puerto Rico’s Economy becoming a Leading Indicator of U.S. recessions ?”. Ceteris Paribus. Vol. I, 

Núm. 1, abril 1991.

“The sensitivity of the Puerto Rican Economy to United States Business Cycles: A Spectral Analysis. 

Ceteris Paribus. Vol. I, Núm. 2, octubre 1991. with R. Ramgolam.

“Puerto Rico’s Regional Economy and the U.S. Business Cycle, 1961-1989”. Ceteris Paribus. Vol. 5, 

Núm. 1, abril 1995. with Arthur Mann.

“Economía y Elecciones: Un análisis preliminar de la teoría política de los ciclos económicos para Puerto 

Rico”. Ceteris Paribus. Vol. 2, Núm. 2, octubre 1992. 

“A profile of Non-U.S. Foreign Direct Investment in Puerto Rico”. Ceteris Paribus. Vol. 2, Núm. 2, octubre 

1992. with Dr. Edwin Irizarry Mora. 

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Estudio de viabilidad para el establecimiento de un Ferry para la ruta entre Mayagüez, Puerto Rico y San 

Pedro de Macoris, República Dominicana.(" A Feasibility Study for the Operation of a Ferry between 

Mayagüez y San Pedro de Macoris). Co-authors, Irizarry-Mora and E. Kicinski. Research done for the 

Chamber of Commerce and the City Government of Mayagüez, April 10, 1992.

“Impacto Económico del Certamen de Miss Puerto Rico en la Región Oeste". December 1994. (con

Alfredo González) Añeses Asociados.

El Impacto económico del Recinto Universitario de Mayagüez en Puerto Rico, Ceteris Paribus, Vol. I, 

Revista del Departamento de Economía del RUM. (con Edwin Irizarry Mora).

“Modelling cycle and trend in macroeconomic time series: an application to Puerto Rico”, Unidad de 

Investigaciones Económicas, Departamento de Economía, Universidad de Puerto Rico, Río Piedras, agosto 

1996, Número 79.

“Indice Herfindahl-Hirschman: instrumento potencial para medir el ambiente de competencia”. Unidad de 

Investigaciones Económicas, Departamento de Economía, Universidad de Puerto Rico, Río Piedras, 

octubre 1999, Número 49

“El impacto económico del Internet”. Unidad de Investigaciones Económicas, Departamento de Economía, 

Universidad de Puerto Rico, Río Piedras, febrero 2000, Núm. 3.

“Asymmetric Effects of United States Monetary Policy on the Economy of Puerto Rico: 1964 to 1994”. 

Unidad de Investigaciones Económicas. Departamento de Economía. Número 89, mayo de 1998.

“Los Determinantes Económicos del Crimen en Puerto Rico: Un enfoque Meta-Económico” (with Alfredo 

González), Conference; La Violencia y el Sistema de Justicia Criminal en Puerto Rico, Universidad 

Interamericana & John Jay College, City University of New York, February 1997

A Comprehensive Study about the Situation of Small and Medium Retailers in Puerto Rico (co-authors 

Drs. E. Irizarry Mora, Leandro Colón y Julio Quintana). Research done for Centro Unido de Detallistas, 

21- March -1997.

“Does stock prices associate with the real economy?”: Revista Forum Empresarial, Centro de 

Investigaciones Comerciales, Mayo 1999. 19-33.

“Globalización, Ciclos Económicos y Respuesta Cíclica de la economía de Puerto Rico”. Unidad de 

Investigaciones Económicas, Departamento de Economía, Universidad de Puerto Rico, Río Piedras, 

febrero 2000, Núm. 3.

“Cambio tecnológico, productividad y crecimiento económico en Puerto Rico”. Unidad de Investigaciones 

Económicas, Departamento de Economía, Universidad de Puerto Rico, Río Piedras, abril de 2001. Número 

106. 

“Impacto de las Leyes de Cabotaje sobre el comercio interestatal entre Puerto Rico y los Estados Unidos y 

su posible efecto sobre el Puerto Trasbordo Las Américas”. 

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Unidad de Investigaciones Económicas, Departamento de Economía, Universidad de Puerto Rico, Río 

Piedras, junio de 2002. Número 51.

“El impacto de la mega tienda en las Pymes de Puerto Rico: El caso de Wal-Mart”. Unidad de 

Investigaciones Económicas, Departamento de Economía, Universidad de Puerto Rico, Río Piedras, junio 

de 2004. Número 121. 

“Recesión 2001/2002@nuevaeconomía.eu.org” Boletín Informativo de la Asociación de Economistas de 

Puerto Rico. Vol. XV. Núm. 2; abril de 2002. ” Boletín Informativo de la Asociación de Economistas de 

Puerto Rico. Vol. XV. Núm. 3; julio de 2002.

“La Recesión en Puerto Rico: ¿Estructural o cíclica?”. Boletín Informativo de la Asociación de 

Economistas de Puerto Rico. Vol. XV. Núm. 2; julio de 2002. ” 

“Las recesiones económicas en Puerto Rico: ¿Cuán parecidas son?: Boletín Informativo de la Asociación 

de Economistas de Puerto Rico. Vol. XVI. Núm. 2; mayo de 2003.

“La desreglamentación de la restricción en las horas de apertura en los negocios de ventas al detal en 

Puerto Rico: el posible impacto de la enmienda de la ley de cierre”; (P. DEL S. 1653,). Study done for 

Centro Unido de Detallistas, 5 de diciembre del 2002.

Análisis de costo-beneficio del uso del R/V Chapman: un enfoque de planificación de largo plazo. Estudio 

hecho para el Departamento de Ciencias Marinas. Diciembre 2004. 

Estudio para determinar la diferencia salarial entre los supervisores, superintendentes de escuelas y los 

directores de escuela en Puerto Rico: preparado para la organización magisterial Educadores 

Puertorriqueños en Acción, Inc. 22 de abril de 2004.

The Effects of Health Insurers Business Policy on Private Radiologic Diagnostic Imaging Centers in 

Puerto Rico: A Preliminary Study. Research prepared for Sociedad Radiológica de Puerto Rico, Inc., San 

Juan, Puerto Rico, June 10, 2004

Estudio sobre el Impacto Económico de una Marina en la comunidad de Puerto Real de Cabo Rojo, Puerto 

Rico, Research done for a group of private investors. Julio del 2004.

The Effects of Health Insurer Business Policy on Private Clinical Laboratories in Puerto Rico: An analysis 

of business practices, market structure and power concentration: Report for Asociación Puertorriqueña de 

Dueños de Laboratorios Clínicos Privados, January 15, 2004.

Estudio para estimar el costo directo en la reparación de vehículos de motor para los talleres de colisión de 

autos de Puerto Rico, Study done for Asociación de Talleres de Colisión, 10 de mayo de 2004.

Análisis del impacto económico de la celebración de los juegos centroamericanos y del caribe del 2010 en 

Mayaguez: Gimnasia para el polo de desarrollo del oeste, (con Alfredo González), el gobierno municipal de 

Mayagüez, 5 de marzo de 2004.

Estudio de viabilidad: para el establecimiento de una cooperativa de establecimientos dedicados al cambio 

de cheques y otros servicios financieros, Cooperativa CashCoop, julio de 2004.

Case:17-04780-LTS Doc#:3427-1 Filed:05/01/23 Entered:05/01/23 15:22:43 Desc:

Exhibit EXPERT REPORT OF JOS ISRAEL ALAMEDA LOZADA Page 66 of 88

Case:17-03283-LTS Doc#:24530-10 Filed:06/12/23 Entered:06/12/23 17:45:09 Desc:

Exhibit 10 Page 66 of 94
7

JOSE ISRAEL ALAMEDA LOZADA -7-

Estudio de viabilidad para una planta de procesamiento de gandules y habichuelas enlatados en el 

municipio de Villalba, Puerto Rico research done for the Department of Agriculture, Commonwealth, 

(with Rivera Galindo) August, 30, 2002. 

Estudio de viabilidad para el establecimiento de una planta procesadora de agregados de carne de pollo, res 

y cerdo en Puerto Rico (reconversión de PAPRI, Inc.) para El Departamento de Agricultura, Autoridad de 

Tierras, 19 de julio de 2002. (Con Rivera-Galindo y Leandro Colón).

Estudio de la inversión publica y su impacto en el desarrollo económico del municipio de Mayaguez: 

Primera parte: Inversión en Carreteras. Movimiento pro Desarrollo Mayagüez, Inc. Mayagüez, Puerto Rico, 

19 de febrero de 2002.

Estudio de Viabilidad Económica y Financiera El Muelle de los Franceses: Playa de la Marina 

Septentrional en el Barrio El Seco de Mayagüez, Research done for para El Departamento de Agricultura, 

Autoridad de Tierras. 

Estudio evaluativo de los Sectores Agrícolas de Farináceos y Hortalizas Frescas y su Posible 

Reorganización en Núcleos y Plantas Procesadoras: 27 de febrero de 2002, con Leandro Colón, para el 

Departamento de Agricultura.

Estudio económico sobre la revisión de las tarifas para la industria de transportación de agregados y carga 

general que reglamenta la Comisión de servicio publico de Puerto Rico: study done for Frente Amplio de 

Camioneros, demanding new regime of cargo charges. July 20, 2005. 

La Reforma de Salud: Análisis y Alternativas; 2005; November 15, 2005. Noviembre de 2005, submitted 

to the Colegio Médico y de Cirujano de Puerto Rico. (with Jorge Luis Torres)

La Reforma de Salud: Análisis y Alternativas: Addendum, submitted to the Colegio Médico y de Cirujano 

de Puerto Rico. (with Jorge Luis Torres) January 5, 2006.

La Probabilidad de una recesión en Puerto Rico: Unidad de Investigaciones Económicas, UPR at Río 

Piedras. Ensayo #130. October, 2006 (see (http://economia.uprrp.edu/ensayomono.html.).

Estudio Crítico de los Planes 2006-07 para el Programa WIC del Departamento de Salud a base del 

Informe de la firma Econométrica, Inc. January 4, 2007. Research done for Asociación de Distribuidores 

del Programa WIC de Puerto Rico. 

El costo económico de los accidentes de tránsito en Puerto Rico. Study done for the Convención para la 

Prevención de los Accidentes de Tránsito en Puerto Rico sponsored by Administración de Compensación 

por Accidentes Automovilísticos (ACAA), 2007. (co-author Dr. Juan Lara). Publisher also Unidad de 

Investigaciones Económicas, UPR at Rio Piedras Ensayo #138. September 2008 

(http://economia.uprrp.edu/ensayomono.html.).

Los Ciclos Económicos en Puerto Rico: cronología y medición, Informe Económico al Gobernador, 2006.

Junta de Planificación, Commonwealth of Puerto Rico.

Un estimado del producto bruto real trimestral para Puerto Rico: implicaciones para un análisis del 

crecimiento económico. Revista Perspectivas, Estudios Técnicos y Triple –S. Año XIV, Núm 1, January, 

2007.

Case:17-04780-LTS Doc#:3427-1 Filed:05/01/23 Entered:05/01/23 15:22:43 Desc:

Exhibit EXPERT REPORT OF JOS ISRAEL ALAMEDA LOZADA Page 67 of 88

Case:17-03283-LTS Doc#:24530-10 Filed:06/12/23 Entered:06/12/23 17:45:09 Desc:

Exhibit 10 Page 67 of 94
8

JOSE ISRAEL ALAMEDA LOZADA -8-

Un estimado de Cuentas Nacionales por Trimestre para Puerto Rico. Ensayo # 134: Unidad de 

Investigaciones Económicas del Departamento de Economía de la UPR Río Piedras. September, 2007. 

(http://economia.uprrp.edu/ensayomono.html.)

Economic Costs of Epilepsy in Puerto Rico: preliminary study and estimates, Research done for Colegio de 

Médicos y Cirujanos de Puerto Rico. Dr. Carlos Lao, sponsored. November, 2007. 

El Costo de la Matricula: Modelo Alternativo basado en la Segmentación de grupos, como parte de las 

recomendaciones al Informe del Comité Asesor de Financiamiento Institucional (informe CAFI). (coauthor Dr. Jeffry Valentín- Mari). April 4, 2007.

Hacia la medición del Bienestar Económico Sostenible para Puerto Rico (with Ivonne Díaz Rodríguez) 

Revista Perspectivas, Estudios Técnicos y Triple –S, Inc; Año XIV, Núm IX, November, 2007.

La Importancia de la Biotecnologia para el Desarrollo Socio-Económico de Puerto Rico: estado actual y 

potencial. (co-author Pedro González- Seda). Research done for the Department of Economics. 8 May, 

2008. 

Causas de la recesión actual: ¿Es realmente criolla?: Revista Perspectivas, Estudios Técnicos y Triple –

S, Inc: septiembre 2008, Año XV, número VIII.

La Economía de Estados Unidos al 2007: Informe Económico al Gobernador, 2008. Junta de 

Planificación, Commonwealth of Puerto Rico. 

Estudio para establecer el número óptimo de Laboratorios Clínicos en los Municipios de Puerto Rico: 

study done for La Asociación Puertorriqueña de Dueños de Laboratorios Clínicos Privados. January 22, 

2008 

Estudio de Viabilidad Comercial para una Estación de Trasbordo en el Municipio de Trujillo Alto: study 

done for Autoridad para el Financiamiento de la Infraestructura y la Autoridad de Desperdicios Sólidos, 

February 5, 2008.

La prestación de los servicios de salud en Puerto Rico: ¿ Estamos en el umbral de la mejor calidad de la 

salud ?; en Compendio de casos de economía del Caribe: Puerto Rico y República Dominicana. Caso 7 

págs. 37-40: editor Dr. Karen Orengo-Serra; Mc Graw Hill; 2008.

Los ciclos económicos en Puerto Rico: en Compendio de casos de economía del Caribe: Puerto Rico y 

República Dominicana. Caso 11, págs. 53-58: editor Dr. Karen Orengo-Serra; Mc Graw Hill; 2008.

Análisis comparativo de las recesiones económicas de la posguerra en Puerto Rico: en Compendio de 

casos de economía del Caribe: Puerto Rico y República Dominicana. Caso 12, págs. 67-71: editor Dr. 

Karen Orengo-Serra; Mc Graw Hill; 2008.

Plan Estratégico para propiciar los usos alternos de las instalaciones deportivas de los XXI Juegos 

Centroamericanos y del Caribe--Mayagüez, 2010 (Strategic Plan for Re-using XXI Central American 

Games Facilities after the celebration at Mayagüez, 2010). July 23, 2008. Done for Autoridad para el 

Financiamiento de la Infraestructura, Commonwealth of Puerto Rico. 

Case:17-04780-LTS Doc#:3427-1 Filed:05/01/23 Entered:05/01/23 15:22:43 Desc:

Exhibit EXPERT REPORT OF JOS ISRAEL ALAMEDA LOZADA Page 68 of 88

Case:17-03283-LTS Doc#:24530-10 Filed:06/12/23 Entered:06/12/23 17:45:09 Desc:

Exhibit 10 Page 68 of 94
9

JOSE ISRAEL ALAMEDA LOZADA -9-

Impacto Macroeconómico del Presupuesto Consolidado de Puerto Rico: study done for Oficina de 

Gerencia y Presupuesto (Office of Budget and Management) Commonwealth of Puerto Rico, June 24, 2008.

Estudio sobre el impuesto de ventas y uso (IVU) como determinante de la recesión actual y evaluación de 

sus efectos redistributivos: Enfoque Macroeconómico: Parte I; study done for Oficina de Gerencia y 

Presupuesto (Office of Budget and Management) Commonwealth of Puerto Rico, June 24, 2008.

Estudio sobre el impuesto de ventas y uso (IVU) como determinante de la recesión actual y evaluación de 

sus efectos redistributivos: Enfoque de hacienda publica y medición de la regresividad y progresividad: 

Parte II; study done for Oficina de Gerencia y Presupuesto (Office of Budget and Management) 

Commonwealth of Puerto Rico, June 24, 2008.

Una evaluación preliminar de la Reforma Contributiva del 2006 en Puerto Rico: Medición de la 

regresividad-progresividad del sistema de contribuciones sobre el ingreso. Unidad de Investigaciones 

Económicas Department of Economics at UPR, Río Piedras. Ensayo #142, April, 2009. 

http://economia.uprrp.edu/ensayomono.html.)

El impacto de la propuesta nueva Ley de Cierre 2009: Revisión de Estudio al 2009. 19, June 2009. 

Research done for Centro Unido de Detallistas. 

La Importancia de la Biotecnologia para el Desarrollo Socio-Económico de Puerto Rico: estado actual y 

potencial. (co-author Pedro González- Seda). Research done for the Department of Economics. 8 May, 

2008. 

Estudio para establecer el número óptimo de Laboratorios Clínicos en los Municipios de Puerto Rico: 

study done for La Asociación Puertorriqueña de Dueños de Laboratorios Clínicos Privados. January 22, 

2008 

Estudio de Viabilidad Comercial para una Estación de Trasbordo en el Municipio de Trujillo Alto: study 

done for Autoridad para el Financiamiento de la Infraestructura y la Autoridad de Desperdicios Sólidos, 

February 5, 2008.

La prestación de los servicios de salud en Puerto Rico: ¿Estamos en el umbral de la mejor calidad de la 

salud ?; en Compendio de casos de economía del Caribe: Puerto Rico y República Dominicana. Caso 7 

págs. 37-40: editor Dr. Karen Orengo-Serra; Mc Graw Hill; 2008.

Los ciclos económicos en Puerto Rico: en Compendio de casos de economía del Caribe: Puerto Rico y

República Dominicana. Caso 11, págs. 53-58: editor Dr. Karen Orengo-Serra; Mc Graw Hill; 2008.

Análisis comparativo de las recesiones económicas de la posguerra en Puerto Rico: en Compendio de casos 

de economía del Caribe: Puerto Rico y República Dominicana. Caso 12, págs. 67-71: editor Dr. Karen 

Orengo-Serra; Mc Graw Hill; 2008.

Plan Estratégico para propiciar los usos alternos de las instalaciones deportivas de los XXI Juegos 

Centroamericanos y del Caribe--Mayagüez, 2010 (Strategic Plan for Re-using XXI Central American 

Games Facilities after the celebration at Mayagüez, 2010). July 23, 2008. Done for Autoridad para el 

Financiamiento de la Infraestructura, Commonwealth of Puerto Rico. 

Case:17-04780-LTS Doc#:3427-1 Filed:05/01/23 Entered:05/01/23 15:22:43 Desc:

Exhibit EXPERT REPORT OF JOS ISRAEL ALAMEDA LOZADA Page 69 of 88

Case:17-03283-LTS Doc#:24530-10 Filed:06/12/23 Entered:06/12/23 17:45:09 Desc:

Exhibit 10 Page 69 of 94
10

JOSE ISRAEL ALAMEDA LOZADA -10-

Impacto Macroeconómico del Presupuesto Consolidado de Puerto Rico: study done for Oficina de 

Gerencia y Presupuesto (Office of Budget and Management) Commonwealth of Puerto Rico, June 24, 2008.

Estudio sobre el impuesto de ventas y uso (IVU) como determinante de la recesión actual y evaluación de 

sus efectos redistributivos: Enfoque Macroeconómico: Parte I; study done for Oficina de Gerencia y 

Presupuesto (Office of Budget and Management) Commonwealth of Puerto Rico, June 24, 2008.

Estudio sobre el impuesto de ventas y uso (IVU) como determinante de la recesión actual y evaluación de 

sus efectos redistributivos: Enfoque de hacienda pública y medición de la regresividad y progresividad: 

Parte II; study done for Oficina de Gerencia y Presupuesto (Office of Budget and Management) 

Commonwealth of Puerto Rico, June 24, 2008.

PLAN ESTRATEGICO PARA PROPICIAR LOS USOS ALTERNOS DE LAS INSTALACIONES 

DEPORTIVAS DE LOS XXI JUEGOS CENTROAMERICANOS Y DEL CARIBE MAYAGUEZ, 

2010: 23 de julio de 2008,final versión. Study done for Autoridad para el Financiamiento de la 

Infraestructura (AFI)

Una evaluación preliminar de la Reforma Contributiva del 2006 en Puerto Rico: Medición de la 

regresividad-progresividad del sistema de contribuciones sobre el ingreso. Unidad de Investigaciones 

Económicas Department of Economics at UPR, Río Piedras. Ensayo #142, April, 2009. 

http://economia.uprrp.edu/ensayomono.html.)

El impacto de la propuesta nueva Ley de Cierre 2009: Revisión de Estudio al 2009. 19, June 2009. 

Research done for Centro Unido de Detallistas. 

El desarrollo socio-económico de Puerto Rico y el papel del Estado: Marco histórico e institucional; Libro 

sobre El Gobierno de Puerto Rico de la Universidad Interamericana de Puerto Rico, Prof. Héctor Luís 

Acevedo, editor. Diciembre de 2010.

Impacto Económico del Cierre del Western Bank en Mayagüez, informe para el gobierno municipal de 

Mayagüez, 21 de julio de 2010. 

Análisis económico de la encuesta a los Cardiólogos: A Petición de la Cooperativa de Servicios, 

CardioCoop. Noviembre de 2011.

Estudio de Viabilidad Socio-Económico para el Nuevo Centro de Convenciones, Estacionamiento y Área 

Comercial: Rehabilitando el Centro Urbano de Mayagüez. Report for Municipal Government of

Mayagüez, marzo de 2010.

Análisis económico PRELIMINAR de la encuesta a Gastroenterólogos. A Petición de la Cooperativa de 

Servicios GastroCoop. Mayo de 2012.

Las Justas Interuniversitarias en el contexto de una Nueva Estrategia de Desarrollo de Mayagüez. 6 de 

abril de 2010. Informe para el gobierno municipal de Mayagüez

Las Cooperativas de Ahorro y Crédito: Evolución, Tendencias y papel dentro de una Economía Social 

de Puerto Rico, para el Informe Económico al Gobernador 2011, Junta de Planificación, abril de 2012. 

Case:17-04780-LTS Doc#:3427-1 Filed:05/01/23 Entered:05/01/23 15:22:43 Desc:

Exhibit EXPERT REPORT OF JOS ISRAEL ALAMEDA LOZADA Page 70 of 88

Case:17-03283-LTS Doc#:24530-10 Filed:06/12/23 Entered:06/12/23 17:45:09 Desc:

Exhibit 10 Page 70 of 94
11

JOSE ISRAEL ALAMEDA LOZADA -11-

Estudio de viabilidad para la expansión de los servicios del hospital San Antonio, Mayagüez, Puerto 

Rico; Mayo de 2010. Informe para el gobierno municipal de Mayagüez y Hospital San Antonio. 

Estudio para la Cooperativa de Mayagüez; estudio de viabilidad económica de una nueva sucursal en el 

Mayagüez Town Center para la Cooperativa de Ahorro y Crédito de Mayagüez, diciembre de 2011. 

Societal Costs for Renewable Energy Portfolio Map of Puerto Rico; José I. Alameda Lozada Ph.D. 

Professor for White Paper at SUSTAINABLE ENERGY ROADMAP OF PUERTO RICO (SuERo) José 

Colucci, PE, PhD; Rogelio Figueroa, MS; José Vega, and Luis D. and Ruíz Angélica Cortés, May 2012.

Adam Smith, el Capitalismo y la Intervención del Estado; co-autor, Wilfredo Ruiz Oliveras, Boletín de la 

Asociación de Economistas de Puerto Rico, diciembre 2011. (17-24).

The Economic Impact of Costa Isabela: A Mega Resort of Golf -Club Membership: Study prepared to 

Costa Isabela Partners, Inc; January 30, 2012;. 

Estudio de Viabilidad Económica para Crash Boat Hotel, Aguadilla. Feasibility Study of Crash Boat 

Hotel, Aguadilla. Bo. Borinquen, Carr. # 458, Km 1.1, Aguadilla, P.R., 26 de marzo de 2012

Riesgos que enfrenta el Sistema de Retiro de la UPR: La Perspectiva Económica: Estudio para la 

Asociación de Retirados de la UPR. Noviembre de 2011.

Impacto económico de los Juegos Centroamericanos 2010, Memorias, Mayagüez, 2010, Los Juegos 

del Pueblo. Comité Organizador de Mayagüez, 2010. 

Economic Impact of Jones Act of United States on Puerto Rico’s Economy: Jeffrey Valentín- Mari, 

Ph.D. and José I. Alameda-Lozada, Ph.D. Paper presented to General Accounting Office (GAO). ABRIL 

2012.

Cabotage market carrier liners at Puerto Rico: Jeffrey Valentín Mari Ph.D. and José I. Alameda 

Lozada Ph.D. Paper presented to General Accounting Office (GAO). ABRIL 2012.

El Costo de los servicios de Salud en Puerto Rico; Perspectiva Económica: Foro Industria de la Salud

Prognosis del Sistema de Salud de Puerto Rico: CPA 245 de febrero de 2012. José I. Alameda y Dr. Luís 

O. Ramírez Ferrer. 

EL IMPACTO ECONOMICO DE LA LEY JONES SOBRE EL CABOTAJE EN LA ECONOMIA DE PUERTO 

RICO: DISCUSION, ANALISIS Y MEDICION (co-author with Dr. Jeffrey Valentín-Mari) for Economic 

Report to the Governor, 2012. Planning Board. 

Una Nueva Estrategia de Desarrollo: Sustentabilidad, Equidad y Seguridad Social: Perspectivas 

Revista de Estudios Técnicos, Año XX, Número VIII, San Juan. 

The Demand and Supply of Physicians in Puerto Rico, for Commonwealth Department of Health, 

November 2013.

A Market Study for a Cheese Manufacturing Plant in Puerto Rico: Size, trend and forecast, Study done 

for Asociación de Productores de Leche de San Sebastián, Inc. Sept 23, 2013. 

Case:17-04780-LTS Doc#:3427-1 Filed:05/01/23 Entered:05/01/23 15:22:43 Desc:

Exhibit EXPERT REPORT OF JOS ISRAEL ALAMEDA LOZADA Page 71 of 88

Case:17-03283-LTS Doc#:24530-10 Filed:06/12/23 Entered:06/12/23 17:45:09 Desc:

Exhibit 10 Page 71 of 94
12

JOSE ISRAEL ALAMEDA LOZADA -12-

Las ondas largas Kuznets y la migración en Puerto Rico. Suplemento Especial de Migración 

Informe de la Junta de Planificación al Gobernador, March, 2014. 

Análisis de la Situación Económica de los Laboratorios Clínicos en Puerto Rico bajo el Presente 

estado de la Economía, estudio para la Asociación Puertorriqueña de Dueños de Laboratorios Clínicos, 

septiembre de 2013.

ESTUDIO PARA DETERMINAR EL IMPACTO DE LA LEGISLACION SOBRE LAS PEQUENAS Y 

MEDIANAS EMPRESAS DE LAS MAQUINAS DE ENTRETENIMIENTO. June 2013. Estudio para 

UDOME (Unión de Operadores de Maquinas de Entretenimiento). 

Análisis del Impacto de las Ley de Cierre y de la política pública hacia el sector de comercial al detal: 

2009 al 2013, 15 de abril de 2013. Study done for el Centro Unido de Detallistas de Puerto Rico. 

ESTUDIO DE VIABILIDAD ECONOMICA DE UNA NUEVA SUCURSAL DE QUEBRADA COOP 

EN EL MUNICIPIO DE LARES PARA LA QUEBRADA COOP –CAMUY, COOPERATIVA DE 

AHORRO Y CREDITO. May, 2014.

IMPACTO ECONOMICO DEL POSIBLE ESTABLECIMIENTO DE UNA UNIDAD DE 

WALGREENS EN EL MUNICIPIO DE RINCON, March 2014. Study done for Asociación de 

Comerciantes de Rincón.

El Impacto de las actividades deportivas promovidas por La Fundación Mayagüez 2010, Estudio 

preparado para la Fundación Mayagüez 2010, February 21, 2014.

Las Ondas largas Kuznets y la migración en Puerto Rico: co-author with Julio Cesar Hernández, at 

Resumen Económico de Puerto Rico: Suplemento Especial: Migración, marzo 2014. 

Enhancing the Short-term economic growth of Puerto Rico: Calculating the amount of fixed investment 

needed to boost economic growth. June 10, 2014. Study done for Cluster of Construction, Chamber of 

Commerce of Puerto Rico. 

LA DEGRADACION DEL CREDITO DE PUERTO RICO: CAUSAS, CONSECUENCIAS Y POLITICAS 

PARA RESOLVERLAS. Paper for the Boletin de la Asociación de Economistas. May, 2014.

LA IMPORTANCIA SOCIO-ECONOMICA DEL DEPORTE EN LOS PAISES: 

REFLEXIONES PARA PUERTO RICO, study done for Economic Report to the Governor, 

2013. 

El Clúster de la Industria de Salud en Mayagüez: Análisis de su estructura y potencial para el 

desarrollo económico regional. For Municipal Government of Mayaguez. 2015

El Clúster de la Industria de la Educación Superior y Técnica en Mayagüez: Análisis de su 

estructura y potencial para el desarrollo económico regional. For Municipal Government of Mayaguez. 

2015

El Consumo de Alimentos No Procesados: Bases analíticas para su exclusión del Impuesto del Valor 

Añadido (IVA) para Puerto Rico. Study done for MIDA. February 12, 2015

Case:17-04780-LTS Doc#:3427-1 Filed:05/01/23 Entered:05/01/23 15:22:43 Desc:

Exhibit EXPERT REPORT OF JOS ISRAEL ALAMEDA LOZADA Page 72 of 88

Case:17-03283-LTS Doc#:24530-10 Filed:06/12/23 Entered:06/12/23 17:45:09 Desc:

Exhibit 10 Page 72 of 94
13

JOSE ISRAEL ALAMEDA LOZADA -13-

El Efecto Wal Mart: Medición de los efectos en los municipios de la zona metropolitana de Puerto 

Rico. 30 de enero de 2015. For Empresarios de Puerto Rico.

Informe al Gobernador y a la Asamblea Legislativa de Puerto Rico de la Comisión de 

Alternativas para la Transformar el Impuesto al Consumo. Department of Treasury of Puerto 

Rico (Departamento de Hacienda) August 12, 2015.

El estancamiento económico, la desigualdad del ingreso y la financiarización en Puerto Rico 

(with Alfredo González) en Perspectiva revista de Estudios Técnicos, Año 23, número 3, marzo 

2016.

Estudio sobre el Impacto Económico de los Espectáculos Públicos study to Colegio de 

Productores de Espectáculos Públicos. September 2016.

INFORME FINAL: ESTUDIO DE VIABILIDAD ECONOMICA DE UNA NUEVA SUCURSAL DE 

LA COOPERATIVA DE AHORRO Y CREDITO DE ISABELA EN EL MUNICIPIO DE 

AGUADILLA For Cooperativa de Ahorro y Crédito de Isabela. March 21, 2016. 

Estudio sobre el Impacto Económico del Conglomerado de la Universidad de Puerto Rico

study to University of Puerto Rico (with Alfredo González) September 2016. Presentando a la 

Presidencia de la UPR. 

Estudio de Retribución salarial, beneficios marginales, evaluación de desempeño y escalas 

salariales del personal: 2017 a 2019. December 2016. For Cooperativa de Ahorro y Crédito de 

Isabela. 

PROPOSAL FROM UDOME TO THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD 

FOR PUERTO RICO, January 9, 2017, Study done for Unión de Operadores de Máquinas de 

Entretenimiento.

ESTUDIO ACLARATORIO: LA ASOCIACION DE HOTELES Y TURISMO DE PUERTO RICO 

Y SU TESIS FALLIDA SOBRE LA CAUSALIDAD DEL CIERRE DE LOS CASINOS POR EL 

SECTOR DE LAS MAQUINAS DE ENTRETENIMIENTO PARA ADULTOS. Hecho para 

ADOME. 14 DE NOVIEMBRE DE 2018.

El estancamiento económico, la desigualdad del ingreso y la financiarización en Puerto Rico (with 

Alfredo González) en libro Ensayos de Economía, Departamento de Economía de UPR Mayagüez. Abril 

2017

Estudio sobre el Impacto Económico del Conglomerado de la Universidad de Puerto Rico (with 

Alfredo González). Ocassional Papers No. 7 April 2017. Estudios Técnicos.

EVALUACION ECONOMICA DE LA COMPRA DE LAS FACILIDADES DEL 

SUPERMERCADO BONANZA, NIEVES INC. Carretera PR 111 KM 4.7; Moca, Puerto 

Rico Para la LA COOPERATIVA DE AHORRO Y CREDITO DE AGUADA. 24 de noviembre 

de 2008

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JOSE ISRAEL ALAMEDA LOZADA -14-

Luis Raúl Marín Aponte, Ramiro Lladó Martínez & José Israel Alameda Lozada, Al rescate de los

deudores hipotecarios, 86 Rev. Jur. UPR 71 (2017). AL RESCATE DE LOS DEUDORES 

HIPOTECARIOS. Revista Jurídica de la Universidad de Puerto Rico. Publicación 4 de junio de

2017. http://revistajuridica.uprrp.edu/wp-content/uploads/2017/07/03.-Al-rescate-de-los-deudoreshipotecarios-86-REVJURUPR-71.pdf

Impacto Económico de la Industria de Gallos en Puerto Rico: análisis por municipios. 26 de Octubre 

de 2019. Para Gobierno Municipal de Mayaguez.

Estudio para el desarrollo de espacios comerciales en Mayagüez, Calle Comercio. Hecho para

FALTO CRUZ REAL ESTATE HOLDINGS, MAYAGUEZ, PR 00680. 10 de octubre de 2019

Estudio de Viabilidad Económica para Centro de Inspección de Vehículos de Motor en la Estación 

Gulf, Barrio Leguisamo. k.m. 4.5 Carr. 352, Mayagüez. 19 de noviembre de 2019 revisado

ESTUDIO DE RETRIBUCIÓN SALARIAL, BENEFICIOS MARGINALES, EVALUACIÓN DE 

DESEMPEÑO Y ESCALAS SALARIALES DEL PERSONAL: 2020 A 2022. 4 de noviembre de 

2019.

Sustainable Fiscal Plan for the UPR / Plan Fiscal Sostenible para la UPR. PROTESTAmos 

(Profesores Transformándonos en Solidaridad Tornada en Acción). Co-author. May-June 2017. 

Análisis de la Propuesta sobre Salarios y Beneficios Marginales a Empleados de la UTIER

José I. Alameda Lozada y Alfredo González Martínez. 22 de Agosto de 2017

Estimación del Daño Económico a la Corporación del Fondo de Seguro del Estado y el 

Menoscabo de los Beneficios para Tres Organizaciones Laborales: Unión de Empleados; 

Asociación de Gerenciales y Unión de Médicos.20 de mayo de 2018 Versión Final

The Plan of Adjustment of Debt of COFINA: Sustainability and Financial Capacity of 

Puerto Rico’s Economy-December 31, 2018. Study prepared for expert witness for PROMESA. 

Occasional Papers No. 11 – February 2019.

http://www.estudiostecnicos.com/pdf/occasionalpapers/2019/OP-No-11-2019.pdf

 

Aplicación del Análisis Económico en la Determinación de una Metodología Idónea para estimar 

las Indemnizaciones, con Alfredo González-Martínez. El Valor de los Daños en la 

Responsabilidad Civil. Tercera Edicion. Antonio Amadeo- Murga.

La construcción del mega-hotel Rincón Blue Water dentro del entorno socio-económico y 

ambiental del municipio de Rincón. 20 de agosto de 2019. For Salva Rincón !!. 

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Exhibit EXPERT REPORT OF JOS ISRAEL ALAMEDA LOZADA Page 74 of 88

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JOSE ISRAEL ALAMEDA LOZADA -15-

ESTUDIO DE VIABILIDAD: NECESIDAD Y CONVENIENCIA PARA EL 

ESTABLECIMIENTO DE UN CENTRO COMERCIAL EN EL MUNICIPIO DE 

BARRANQUITAS. Realizado para la Empresa Cerromonte, Corp. Con Carlos Rivera Galindo. 

20 de abril de 2009. Mayagüez, Puerto Rico.

ESTUDIO DE VIABILIDAD DEL HOTEL LIGHTHOUSE PLAZA; Carretera PR 102, k.m. 

18.8. Barrio Boquerón, Puerto Rico. JMR Tourist Development Group Corporation. 10 de 

noviembre de 2008.

ESTUDIO DE VIABILIDAD: NECESIDAD Y CONVENIENCIA PARA EL 

ESTABLECIMIENTO DE UN CENTRO COMERCIAL, QUINTAMAR CORPORATION, 

BARRIO PALMAS DE CATANO, PUERTO RICO. 2010. 

ESTUDIO PERICIAL SOBRE EL INFORME DE LA FIRMA CARIBBEAN ANALYSIS UNIT, 29 

de agosto de 2019. Caso de Laboratorio High Profile VI, Ponce

ESTUDIO DE VIABILIDAD PARA LABORATORIO CLINICO EN PONCE ADVANCE 

MEDICAL GROUP (PAMG). Economista y asesor financiero, 4 de agosto de 2019 

EVALUACION PRELIMINAR DE LAS LEYES DE INCENTIVOS AGRICOLAS Y LA LEY DE 

INCENTIVOS ECONOMICOS PARA EL DESARROLLO: Ley 225 de 1995 y Ley 73 de 2008.

Estudio para el desarrollo de espacios comerciales en Mayagüez, Calle Comercio. Hecho para

FALTO CRUZ REAL ESTATE HOLDINGS, MAYAGUEZ, PR 00680. 10 de octubre de 2019

Estudio de Viabilidad Económica para Centro de Inspección de Vehículos de Motor en la Estación 

Gulf, Barrio Leguisamo. k.m. 4.5 Carr. 352, Mayagüez. 19 de noviembre de 2019 revisado.

The Impairment of UTIER’s Collective Bargaining Agreement and the Calculation of Damages. June 

15, 2020. Study for UTIER union from Puerto Rico Electric Power Authority.

ESTUDIO DE RETRIBUCIÓN SALARIAL, BENEFICIOS MARGINALES, EVALUACIÓN DE 

DESEMPEÑO Y ESCALAS SALARIALES DEL PERSONAL: 2020 A 2022. 4 de noviembre de 2019. 

To Cooperativa de Ahorro y Crédito de Isabela. 

La pandemia Covid-19, el sistema sanitario en EE.UU. y el nuevo orden económico internacional. 

Estudios Técnicos. Perspectiva abril 2020.

El costo económico del discrimen racial. Estudios Técnicos. Perspectiva junio 2020. 

SERVICES REALIZED AS ECONOMIC ADVISOR OR CONSULTANT

1. Universidad de Puerto Rico, Recinto de Mayagüez (oficina del Rector-estudio sobre de costobeneficio sobre el R/V Chapman (con Dr. Leandro Colón); 

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JOSE ISRAEL ALAMEDA LOZADA -16-

2. Universidad de Puerto Rico, Recinto de Mayagüez (oficina del Rector-estudio sobre el impacto 

económico del RUM (con Dr. Edwin Irizarry Mora), utilizado por el RUM en una presentación 

hacia la Asamblea Legislativa)

3. Centro de Desarrollo Económico de la UPR (Estudio sobre el Impacto Económico de Porta del 

Sol); realizado para la Compañía de Turismo de Puerto Rico;

4. Junta de Planificación –Planning Board (estudio de fondo para el Informe Económico al 

Gobernador 2006 sobre las Trayectoria de los Ciclos Económicos de Puerto Rico y el Informe 

Económico 2008, Economía de Estados Unidos);

5. Oficina de Gerencia y Presupuesto (Office of Budget and Management, Commonwealth of Puerto 

Rico 2008.

6. Autoridad para el Financiamiento de la Infraestructura (studies about XXI Central American 

Games, 2010, and solid wastes-transshipment station at Trujillo Alto).

7. Administración de Compensaciones por Accidentes de Automóviles (ACAA), Estudio del Impacto 

Económico de los Accidentes de Tránsito en Puerto Rico;

http://economia.uprrp.edu/Ensayo%20138joseialamedayjuanlara.pdf. 

8. Gobierno Municipal de Mayagüez, Impacto Económico de los Juegos Centroamericanos y del 

Caribe 2010.

9. Departamento de Agricultura de Puerto Rico: tres estudios de viabilidad:

10. Asociación de Dueños de Talleres de Reparación Colisión de Autos (estudio sobre el costo de los 

servicios y la fijación de tarifas por parte de las aseguradoras-study about insurance payment and 

charges) ;

11. Frente Unido de Camioneros de Puerto Rico (estudio sobre las tarifas de los camioneros 

presentados a la Comisión de Servicio Público—study about cargo freight and charges). 2002

12. Colegio de Médicos y Cirujanos de Puerto Rico, (estudio el impacto económico de la reforma de 

salud para presentarse en la Comisión Evaluadora de la Reforma de Salud de Puerto Rico; 

Epilepsy Study);

13. Asociación de Detallistas de Gasolina de Puerto Rico (caso sobre el impacto del salario mínimo, 

proyecto de Ley—study about mininum wages),

14. Department of Health; Demand and Supply of Physicians and Health Costs. 

15. Asociación Puertorriqueña de Dueños de Laboratorio Clínico Privado (caso sobre demanda a 

aseguradoras, estudio para el Federal Trade Commission (FTC));

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JOSE ISRAEL ALAMEDA LOZADA -17-

16. Asociación de Farmacias de la Comunidad (estudio comprensivo sobre la situación económica de 

las farmacias de la comunidad-- 4 de febrero del 2005);

17. Sociedad de Radiología de Puerto Rico, Inc; (estudio sobre el efecto de la fijación de tarifas por 

parte de las aseguradoras en los laboratorios de radiología en Puerto Rico, abril de 2004, estudio 

para el FTC).

18. Cooperativa de Ahorro y Crédito de Aguada; Estudio sobre la viabilidad de una sucursal en 

Mayagüez; septiembre 2005.

19. Cooperativa Cash-Coop (Estudio de viabilidad para el establecimiento de una cooperativa de 

establecimientos dedicados al cambio de cheques y otros servicios financieros, Cooperativa 

CashCoop, July 2004).

20. Movimiento para el Desarrollo de Oeste (estudio sobre la inversión privada y pública en 

Carreteras en el Oeste).

21. Educadores Puertorriqueños en Acción Ciudadana, (Estudio para determinar la diferencia 

salarial entre los supervisores, superintendentes de escuelas y los directores de escuela en Puerto 

Rico: 22 de abril de 2004).

22. Asociación Puertorriqueña de Dueños de Laboratorios Clínicos Privados.

23. XXI Central American Games Organization: (economic and financial advisor).

24. Alianza Ciudadana para la Energia Renovable, University of Puerto Rico at Mayagüez campus 

(studies about energy conservation, renewable resources, public authorities, etc) 

25. Instituto Tropical de Economía, Ambiente y Sociedad, sponsored by the University of Puerto Rico 

at Mayagüez.

26. UTIER. The Unión de Trabajadores de la Industria Eléctrica y Riego.

27. PROSOL-UTIER, Programa de Solidaridad UTIER. Unión Obrera creada por la Unión de 

Trabajadores de la Industria Eléctrica y Riego.

28. Consultant Department of Treasury (Hacienda)—2015-16. Co-author study Sales and Used Tax 

index of Complaint: Merchandises and Services.

29. Administrador Judicial para el gobierno municipal de Añasco. Caso de propiedades Municipio de 

Añasco v. Community Action for Social Affairs and Housing Development Organization of Puerto 

Rico, Inc. et.al. Caso Civil Núm: ISCI2009-00654.

30. Consultor para el Colegio de Productores de Espectáculos Públicos (COPEP), 

31. Economic Consultant, Cámara de Mercadeo, Industria y Distribución de Alimentos (MIDA); 2016

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JOSE ISRAEL ALAMEDA LOZADA -18-

HONORS and PROFESSIONAL PARTICIPATIONS: 

• : Comité de los 24: Participation at an active member, sponsored by Office of the Governor of 

Puerto Rico April 2014. 

 

• : Outstanding Researcher of the Faculty of Arts and Science, 2013 (See letter attached). 

• : Most Outstanding Student in the Concentration of Economic Planning June 1973. Graduate 

School of Planning from the University of Puerto Rico.

• : Presidential Fellowship for Graduate Studies Abroad, University of Puerto Rico. June 1980.

• : Participant in the 2008 Fed in the 21th Century Symposium for College Professors at the New 

York Federal Reserve Bank. :Participant in the 2011 to Fed in the for College Professors at the 

New York Federal Reserve Bank

• : Who's Who Marquis. Finance and Industry. 27th Edition, 1992-93.

• Member Comité de Auditoria de la Deuda Pública de Puerto Rico: 2016. Senate and House of 

Representative of Puerto Rico. 

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JOSE ISRAEL ALAMEDA LOZADA -19-

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JOSE ISRAEL ALAMEDA LOZADA

 El doctor José I. Alameda Lozada es actualmente Catedrático del Departamento de Economía del Recinto 

Universitario de Mayagüez. Ha sido, además consultor de la Junta de Planificación y de la Comisión Pro Sede de las 

Olimpiadas del 2004 y de la organización que patrocina la celebración de los Juegos Centroamericanos y del Caribe 

en el 2010, en la zona oeste. Durante el 1989 al presente ha sido asesor económico de numerosas instituciones, 

agencias del gobierno y empresas privadas.

 Posee un bachillerato en Administración de Empresas con concentración en Economía (1973) del Recinto 

Universitario de Mayagüez y obtuvo una maestría en Planificación Económica (1976) de la Escuela Graduada de 

Planificación de la Universidad de Puerto Rico, donde recibió el premio del estudiante más destacado dentro de la 

especialización de Economía. En el 1982, obtuvo el grado de maestría en Economía con concentración en economía 

monetaria y economía internacional de la Universidad de Rutgers del estado de Nueva Jersey. Posee un doctorado en 

Economía de la Universidad de Gales en el Reino Unido (1996), concentrando su tesis en el análisis de la transmisión 

del ciclo de la economía de Estados Unidos a la de Puerto Rico.

 Ha sido profesor de la Universidad Interamericana (1976-79), profesor visitante en la Facultad de Estudios 

Puertorriqueños de la Universidad de Rutgers (1980-81), Investigador Asociado en el Centro de Investigaciones 

Comerciales de la Facultad de Administración de Empresas del Recinto de Río Piedras (1983-85), Profesor de 

Finanzas del Departamento de Finanzas del Recinto de Río Piedras (1984-85). Realizó labores como economista en la 

Comisión Especial para el Desarrollo del Senado de Puerto Rico (1985) y Asesor Económico de la Presidenta de la 

Junta de Planificación (1985-87).

 Ha publicado extensamente en Puerto Rico, en Estados Unidos y en el Reino Unido artículos sobre el 

desarrollo económico, energía, recursos humanos, el sector financiero y los fondos 936, el impacto económico del 

SIDA en Puerto Rico, impacto económico de la criminalidad, viabilidad de los Juegos Olímpicos del 2004, y 

Centroamericanos y del Caribe 2010, entre otros. Fue uno de los pioneros en toda la América de estudiar el SIDA 

desde la perspectiva económica, presentado su trabajo en la Convención Internacional sobre el SIDA en la cuidad de 

Montreal, Canadá en el 1989. Ha realizado presentaciones de sus investigaciones en Chile, Costa Rica, República 

Dominicana, Inglaterra, Estados Unidos, entre otros países. Fue seleccionado para aparecer en Who's Who de Marquis

en Finanzas e Industria, edición número 27, 1992-93. Recibió el premio de investigador destacado de la Academia de 

la Facultad de Artes y Ciencias del RUM en 2013. 

Tiene publicados seis libros: (1) La Economía del Diario Vivir: análisis de los asuntos cotidianos desde la 

organización social y deportiva hasta el status político (2004) ; (2) Ensayos en Economía Aplicada: Análisis y 

medición del impacto social, político y económico de las instituciones sobre la economía de Puerto Rico (2004); 

(3) La Vivienda de Interés social en Puerto Rico (2002), este último con el Profesor Rivera Galindo y hecho para el 

Departamento de la Vivienda de Puerto Rico; (4) Índice para la Medición del Bienestar Económico en Puerto Rico

(2009)-- con la doctora Ivonne Díaz Rodríguez, catedrática del RUM y experta en economía ambiental; (5) La 

Política Neoliberal en Puerto Rico y la Ley Número 7: Impacto y Consecuencias Socio-Económicas: Años 

Fiscales 2009 al 2011 (2012) (Editorial Situm); y Una nueva estrategia de desarrollo: sustentabilidad, equidad y 

seguridad social (2013) con Colectivo de Economistas Universitarios (Editorial Situm). 

Fue coordinador y fundador del Comité de Ciclos Económicos de la Asociación de Economistas de Puerto Rico, 

institución en la cual es socio fundador. En la misma ha ocupado puestos en la Junta de Directores tales como 

Secretario (1989-90) y Tesorero (1991-92). Nombrado al Comité de Auditoria de la Deuda Pública de Puerto 

Rico: 2016. Senado and Cámara de Representantes of Puerto Rico. 

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ANNEX 3 

(Appendix to the Opening Expert Report José I. Alameda Lozada, Ph.D.)

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Appendix 1

Forecasting costs per kWh for Industrial, Commercial and Residential

Puerto Rico Energy Power Authority (PREPA)

The first step relies upon the estimation of cost per kWh with and without the TC. The time frame 

considered is from historical 2000 to 2019 and forecasting for 2022 to 2050. The basic regression equation 

is:

Cost –per- kWh (cents) = f (West-Texas Intermediate (2022 price), Henry Hubb Gas price (2022 prices)).

The two independent variables are: 

• West-Texas Intermediate (2022 price);

• Henry Hubb Gas price (2022 prices). 

The information came from Energy Information Administration: U.S. Energy Information Administration -

EIA - Independent Statistics and Analysis. 

https://www.eia.gov/outlooks/aeo/data/browser/#/?id=3-o2019&cases=ref2019~ref_no_cpp&sourcekey=0.

The dependent variable is from PREPA-Statistics:

• Cost-per-kWh from PREPA. (https://www2.aeepr.com/aeees/estadisticas.asp.). Each sector 

commercial, industrial, and residential. 

In 2020, PREPA’s net generation was mainly based upon oil derived fuels by 70% and natural gas by near 

30%, thereby, the cost equation must take on account both fuel inputs mix. Notwithstanding, at the 

future, this mix will be bias toward natural gas. Then the model will be as follow:

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The equation of cost shall be tested as follow: 

• Costs per kWh (cents) = f (West-Texas Intermediate (2022 price), Henry Hubb Gas price (2022 prices). 

• The Costs per kWh (cents) are for industrial, commercial, and residential sectors.

Each equation will be tested on the time series procedure of Cointegration Fully Modify OLS (FMOLS). 

Several authors have claimed that cointegration, either Dynamic OLS (DOLS) or Fully Modified OLS 

(FMOLS) are both superior to the traditional statistical OLS: (1) OLS estimates are super- consistent, but 

the t-statistic obtained without stationary or I(0) terms are only approximately normal (see Arize, 

Malindretos and Ghosh (2015) in International Review of Economics and Finance1. Also, see Arize, Osang 

and Slottje (2000) in Journal of Business & Economic Statistics2). 

FMOLS is a non-parametric approach used to dealing with serial correlation found at time series data. 

Dynamic OLS (DOLS) is an alternative (parametric) approach in which lags and leads are introduced to cope 

with the problem irrespectively of the order of integration and the existence or absence of cointegration. 

Either DOLS or FMOLS are usually preferred to the OLS estimator because they take care of small sample 

bias but also the endogeneity bias by taking the leads and lags of the first-differenced regressors.

The different results are shown at the following slides. These results meant different scenarios about the 

future cost of kWh at industrial, commercial, and residential. 

Forecasting the Total Cost per kWh

1 Purchasing power parity-symmetry and proportionality: Evidence from 116 countries. Augustine C. Arize a, John 

Malindretos, and Dilip Ghosh. International Review of Economics and Finance.See 

https://www.sciencedirect.com/science/article/abs/pii/S1059056014001956. 

2 Exchange-Rate Volatility and Foreign Trade: Evidence from Thirteen LDC's. Augustine C. Arize, Thomas Osang and 

Daniel J. Slottje. Vol. 18, No. 1, January 2000. Journal of Business & Economic Statistics. American Statistical 

Association. pp. 10-17. 

Dependent Variable: COSTOKWHPR

Method: Fully Modified Least Squares (FMOLS)

Date: 04/07/23 Time: 21:05

Sample (adjusted): 2001 2022

Included observations: 22 after adjustments

Cointegrating equation deterministics: C

Long-run covariance estimate (Bartlett kernel, Newey-West fixed

 bandwidth = 3.0000)

Variable Coefficient Std. Error t-Statistic Prob. 

NATURAL_GAS_AT_HENRY_HUB -1.225778 0.177695 -6.898213 0.0000

WEST_TEXAS_INTERMEDIATE_SPO... 0.206758 0.014401 14.35668 0.0000

C 12.48650 1.097984 11.37220 0.0000

R-squared 0.843837 Mean dependent var 20.06718

Adjusted R-squared 0.827399 S.D. dependent var 4.923617

S.E. of regression 2.045531 Sum squared resid 79.49977

Long-run variance 2.400682

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5

1 0

1 5

2 0

2 5

3 0

3 5

0 0 0 5 1 0 1 5 2 0 2 5 3 0 3 5 4 0 4 5 5 0

COSTOKWHPRF ± 2 S.E.

Forecast: COSTOKWHPRF

Actual: COSTOKWHPR

Forecast sample: 2000 2050

Included observations: 51

Root Mean Squared Error 1.931779

Mean Absolute Error 1.507803

Mean Abs. Percent Error 8.188964

Theil Inequality Coef. 0.047344

 Bias Proportion 0.012531

 Variance Proportion 0.003570

 Covariance Proportion 0.983899

Theil U2 Coefficient 0.679073

Symmetric MAPE 8.038123

Forecasting Commercial cost

Dependent Variable: COMERCIAL

Method: Fully Modified Least Squares (FMOLS)

Date: 04/07/23 Time: 20:48

Sample (adjusted): 2001 2022

Included observations: 22 after adjustments

Cointegrating equation deterministics: C

Long-run covariance estimate (Bartlett kernel, Newey-West fixed

 bandwidth = 3.0000)

Variable Coefficient Std. Error t-Statistic Prob. 

NATURAL_GAS_AT_HENRY_HUB -1.196160 0.151493 -7.895810 0.0000

WEST_TEXAS_INTERMEDIATE_SPO... 0.210734 0.012278 17.16364 0.0000

C 13.03520 0.936081 13.92530 0.0000

R-squared 0.852526 Mean dependent var 21.02118

Adjusted R-squared 0.837002 S.D. dependent var 5.000733

S.E. of regression 2.018947 Sum squared resid 77.44679

Long-run variance 1.744894

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5

1 0

1 5

2 0

2 5

3 0

3 5

0 0 0 5 1 0 1 5 2 0 2 5 3 0 3 5 4 0 4 5 5 0

COMERCIALF ± 2 S.E.

Forecast: COMERCIALF

Actual: COMERCIAL

Forecast sample: 2000 2050

Included observations: 51

Root Mean Squared Error 1.884514

Mean Absolute Error 1.456604

Mean Abs. Percent Error 7.351025

Theil Inequality Coef. 0.044160

 Bias Proportion 0.009108

 Variance Proportion 0.002094

 Covariance Proportion 0.988798

Theil U2 Coefficient 0.640849

Symmetric MAPE 7.262969

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Forecasting Industrial cost

5

1 0

1 5

2 0

2 5

3 0

3 5

0 0 0 5 1 0 1 5 2 0 2 5 3 0 3 5 4 0 4 5 5 0

INDUSTRIALF ± 2 S.E.

Forecast: INDUSTRIALF

Actual: INDUSTRIAL

Forecast sample: 2000 2050

Included observations: 51

Root Mean Squared Error 1.923202

Mean Absolute Error 1.487460

Mean Abs. Percent Error 8.952369

Theil Inequality Coef. 0.053574

 Bias Proportion 0.006096

 Variance Proportion 0.004157

 Covariance Proportion 0.989747

Theil U2 Coefficient 0.714220

Symmetric MAPE 8.856569

Dependent Variable: INDUSTRIAL

Method: Fully Modified Least Squares (FMOLS)

Date: 04/07/23 Time: 20:45

Sample (adjusted): 2001 2022

Included observations: 22 after adjustments

Cointegrating equation deterministics: C

Long-run covariance estimate (Bartlett kernel, Newey-West fixed

 bandwidth = 3.0000)

Variable Coefficient Std. Error t-Statistic Prob. 

WEST_TEXAS_INTERMEDIATE_SPO... 0.186880 0.015584 11.99181 0.0000

NATURAL_GAS_AT_HENRY_HUB -1.197609 0.192285 -6.228304 0.0000

C 11.14808 1.188136 9.382831 0.0000

R-squared 0.812453 Mean dependent var 17.63286

Adjusted R-squared 0.792711 S.D. dependent var 4.529738

S.E. of regression 2.062345 Sum squared resid 80.81207

Long-run variance 2.811089

Case:17-04780-LTS Doc#:3427-1 Filed:05/01/23 Entered:05/01/23 15:22:43 Desc:

Exhibit EXPERT REPORT OF JOS ISRAEL ALAMEDA LOZADA Page 86 of 88

Case:17-03283-LTS Doc#:24530-10 Filed:06/12/23 Entered:06/12/23 17:45:09 Desc:

Exhibit 10 Page 86 of 94
Forecasting Residential cost

5

1 0

1 5

2 0

2 5

3 0

3 5

0 0 0 5 1 0 1 5 2 0 2 5 3 0 3 5 4 0 4 5 5 0

RESIDENCIAF ± 2 S.E.

Forecast: RESIDENCIAF

Actual: RESIDENCIAL

Forecast sample: 2000 2050

Included observations: 51

Root Mean Squared Error 2.024466

Mean Absolute Error 1.593914

Mean Abs. Percent Error 9.132959

Theil Inequality Coef. 0.051109

 Bias Proportion 0.016832

 Variance Proportion 0.008449

 Covariance Proportion 0.974719

Theil U2 Coefficient 0.688712

Symmetric MAPE 8.870747

Dependent Variable: RESIDENCIAL

Method: Fully Modified Least Squares (FMOLS)

Date: 04/07/23 Time: 20:51

Sample (adjusted): 2001 2022

Included observations: 22 after adjustments

Cointegrating equation deterministics: C

Long-run covariance estimate (Bartlett kernel, Newey-West fixed

 bandwidth = 3.0000)

Variable Coefficient Std. Error t-Statistic Prob. 

NATURAL_GAS_AT_HENRY_HUB -1.123928 0.195472 -5.749810 0.0000

WEST_TEXAS_INTERMEDIATE_SPO... 0.204053 0.015842 12.88026 0.0000

C 11.61968 1.207830 9.620294 0.0000

R-squared 0.828398 Mean dependent var 19.46130

Adjusted R-squared 0.810334 S.D. dependent var 4.861562

S.E. of regression 2.117240 Sum squared resid 85.17140

Long-run variance 2.905054

Case:17-04780-LTS Doc#:3427-1 Filed:05/01/23 Entered:05/01/23 15:22:43 Desc:

Exhibit EXPERT REPORT OF JOS ISRAEL ALAMEDA LOZADA Page 87 of 88

Case:17-03283-LTS Doc#:24530-10 Filed:06/12/23 Entered:06/12/23 17:45:09 Desc:

Exhibit 10 Page 87 of 94
Table A-1

Forecasted Costs per kWh: Puerto Rico

Cents of a dollar. 

Note: The standard errors are closely to 2.0. Then the estimates should be within ± 4 cents per kWh. 

Fiscal Years Total Commercial Industrial Residential

Cost kWh Cost kWh Cost kWh Cost kWh

2023 23.77 24.81 20.87 23.20

2024 26.34 27.38 23.31 25.64

2025 25.83 26.82 22.90 25.09

2026 26.36 27.33 23.41 25.57

2027 26.67 27.65 23.72 25.87

2028 26.89 27.86 23.92 26.08

2029 26.96 27.93 23.97 26.14

2030 26.94 27.92 23.95 26.14

2031 26.90 27.89 23.90 26.10

2032 26.85 27.85 23.85 26.08

2033 26.69 27.69 23.68 25.93

2034 26.64 27.65 23.62 25.89

2035 26.59 27.60 23.56 25.85

2036 26.74 27.76 23.70 26.00

2037 26.81 27.83 23.76 26.08

2038 26.73 27.76 23.67 26.01

2039 26.93 27.96 23.87 26.20

2040 26.84 27.87 23.77 26.12

2041 26.84 27.88 23.76 26.13

2042 26.94 27.98 23.85 26.23

2043 27.10 28.14 24.00 26.38

2044 27.23 28.27 24.12 26.51

2045 27.31 28.35 24.19 26.58

2046 27.46 28.51 24.33 26.73

2047 27.60 28.64 24.46 26.86

2048 27.77 28.81 24.61 27.03

2049 28.00 29.04 24.83 27.25

2050 28.06 29.11 24.89 27.31

Case:17-04780-LTS Doc#:3427-1 Filed:05/01/23 Entered:05/01/23 15:22:43 Desc:

Exhibit EXPERT REPORT OF JOS ISRAEL ALAMEDA LOZADA Page 88 of 88

Case:17-03283-LTS Doc#:24530-10 Filed:06/12/23 Entered:06/12/23 17:45:09 Desc:

Exhibit 10 Page 88 of 94
IN THE UNITED STATES BANKRUPTCY COURT

FOR THE 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

Case 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

Case No. 17 BK 4780-LTS

MOTION TO SUBMIT CORRECTIONS TO SISTEMA DE RETIRO DE LOS 

EMPLEADOS DE LA AUTORIDAD DE ENERGÍA ELÉCTRICA (“SREAEE”) 

MOTION TO SUBMIT OPENING EXPERT REPORT OF JOSÉ ISRAEL ALAMEDA 

LOZADA

[Space intentionally left blank]

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.)

Case:17-04780-LTS Doc#:3574 Filed:06/02/23 Entered:06/02/23 16:55:59 Desc: Main

Document Page 1 of 3

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Exhibit 10 Page 89 of 94
2

TO THE HONORABLE COURT

COMES NOW Sistema de Retiro de los Empleados de la Autoridad de Energía Eléctrica 

(“SREAEE”) as creditor and party in interest pursuant to 11 U.S.C. §1109(b), through their 

undersigned attorneys, and before this Honorable Court very respectfully states and prays.

1. On April 28, 2023, SREAEE filed the Motion to Submit Opening Expert Report of José 

Israel Alameda Lozada. (ECF No. 3417 in Case No. 17-4780-LTS)(“Opening Expert 

Report”).

2. Upon examination through deposition, Dr. Alameda identified an error in his calculations 

and proceeded to correct it.

3. Thus, with this Motion, SREAEE submits Dr. Alameda’s corrections to his Opening Expert 

Report. Annex 1.

WHEREFORE, SREAEE respectfully requests that the Court take notice of the above stated

in this Motion.

WE 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 notification of such filing to all 

participants and Standard Parties. A courtesy copy of this Motion will be delivered to the Court 

by email to SwainDPRCorresp@nysd.uscourts.gov as provided in First Amended Standing Order. 

In Ponce, Puerto Rico, this 2

nd day of June 2023.

ORTIZ MENDOZA & FARINACCI FERNÓS, LLC

Edificio Banco Cooperativo Plaza 

BUFETE EMMANUELLI, C.S.P.

P.O. Box 10779

Ponce, Puerto Rico 00732

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Document Page 2 of 3

Case:17-03283-LTS Doc#:24530-10 Filed:06/12/23 Entered:06/12/23 17:45:09 Desc:

Exhibit 10 Page 90 of 94
3

623 Ponce de León Ave., Suite 701-B

San Juan, PR 00917-4820

Tel: 787-963-0404

Tel.: 787-848-0666

Fax: 1-787-841-1435

motificaciones@bufete-emmanuelli.com

/s/Rafael A. Ortiz-Mendoza 

Rafael A. Ortiz-Mendoza, Esq. 

USDC-PR: 229103

rafael.ortiz.mendoza@gmail.com

/s/Rolando Emmanuelli-Jiménez 

Rolando Emmanuelli-Jiménez, Esq.

USDC: 214105

rolando@emmanuelli.law

Co-counsel to SREAEE /s/Jessica E. Méndez-Colberg 

Jessica E. Méndez-Colberg, Esq.

USDC: 302108

jessica@emmanuelli.law

/s/ Zoé C. Negrón-Comas

Zoé C. Negrón-Comas, Esq. 

USDC: 308702

zoe@emmanuelli.law

Co-counsel to SREAEE

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Document Page 3 of 3

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Exhibit 10 Page 91 of 94
1 Q. State your name. 

2 Dr. José Israel Alameda Lozada.

3 Q. State on whose behalf you are testifying before the Title III Court.

4 I am testifying on behalf of the Puerto Rico Electric Power Authority Employee’s Retirement 

5 System (“PREPA ERS” or “SREAEE”).

6 Q. What is the purpose of this declaration?

7 I am correcting a mathematical error in the Expert Declaration Of Dr. José Israel Alameda Lozada 

8 In Support Of The Employees’ Retirement System Of Puerto Rico Electric Power Authority’s 

9 Objection To The Confirmation Of The Puerto Rico Electric Power Authority’s Plan Of Adjustment

10 (“Opening Report”).

11 Q. What was the conclusion of your Opening Report?

12 The imposition of the Legacy Charge, with or without the additional $0.024 per kWh for the PayGo 

13 payments, creates a burden to Puerto Rico residents, as well as the industrial and commercial 

14 sector, which decreases revenue for the Commonwealth. Moreover, the payment of the 

15 Commonwealth restructured debt, PayGo pension payments and the transfers to the 

16 Commonwealth Trust Fund, in addition to the effects of the Legacy Charge, make the 

17 Commonwealth’s Certified Fiscal Plan unsustainable, as seen in my report. 

18 Therefore, the imposition of the Legacy Charge makes all the assumptions established in the 

19 Commonwealth’s Certified Fiscal Plan unsustainable and with them the ability of the 

20 Commonwealth to pay debt service pursuant to its own Plan of Adjustment. 

21 Q. What errors did you identify in your deposition?

22 As a result of my examination in the deposition, taken on May 26, 2023, I identified a numerical 

23 value inconsistency on page thirty-nine (39) on my Opening Report: 

Case:17-04780-LTS Doc#:3574-1 Filed:06/02/23 Entered:06/02/23 16:55:59 Desc:

Exhibit Annex 1 Page 1 of 3

Case:17-03283-LTS Doc#:24530-10 Filed:06/12/23 Entered:06/12/23 17:45:09 Desc:

Exhibit 10 Page 92 of 94
Fiscal Year W/O 2.4 cents With 2.4 cents Debt Services Pensions Trust Sum W/O 2.4 cents With 2.4 cents

Net Revenue to GF Net Revenue to GF Re-estructured Pay Go Pension No CV % Net Revenue % Net Revenue

(in million $) (in million $) (in million $) (in million $) (in million $) (in million $)

2023 11,252 11,199 $1,150 $2,350 $1,000 $4,500 40.0% 40.2%

2024 11,178 11,072 $1,150 $2,352 $1,000 $4,502 40.3% 40.7%

2025 11,102 10,944 $1,150 $2,347 $1,000 $4,497 40.5% 41.1%

2026 11,029 10,820 $1,150 $2,338 $1,000 $4,488 40.7% 41.5%

2027 10,957 10,699 $1,150 $2,326 $1,000 $4,476 40.9% 41.8%

2028 10,885 10,580 $1,150 $2,317 $1,000 $4,467 41.0% 42.2%

2029 10,815 10,462 $1,150 $2,309 $1,000 $4,459 41.2% 42.6%

2030 10,745 10,346 $1,150 $2,300 $1,000 $4,450 41.4% 43.0%

2031 10,675 10,231 $1,150 $2,291 $1,000 $4,441 41.6% 43.4%

2032 10,606 10,118 $1,150 $2,283 $1,000 $4,433 41.8% 43.8%

Table 1 Original Tabl 21, page 49 of the Operning Report

24 The elasticities of energy consumption in kWh in relation to kWh costs (Price-Demand 

25 Elasticities) 

26 Residential......................... -0.0709 (adjusted to 70%, residential, non-exempted); 

27 Industrial ........................... - 0.0728 

28 Commercial ...................... -0.3158

29 Page 39. 

30 As the lawyers questioning me pointed out, these elasticity values were not consistent with the 

31 elasticities derived from the Equation 2, Demand of residential (page 38); Equation 3, Demand of 

32 industrial; (page 39); and Equation 4, Demand of commercial (page 39).

33 After a comprehensive revision of my formulas, I concluded that the correct data reads as follows:

34 Residential......................... -0.039455 (adjusted to 70%, residential, non-exempted); 

35 Industrial ........................... - 0.044534 

36 Commercial ...................... -0.031575

37 Q. What is the effect of this new calculation? 

38 The new calculation has a negligible effect on the main conclusions previously addressed and it 

39 does not change the long run trend or the perversive effects of higher rates per kWh on the 

40 economic sectors such as industrial and commercial as well as residential sectors. The original 

41 Table 21 of my Opening Report and the corrected Table 21 are shown below: 

42

43

44

45

46

47

48

Case:17-04780-LTS Doc#:3574-1 Filed:06/02/23 Entered:06/02/23 16:55:59 Desc:

Exhibit Annex 1 Page 2 of 3

Case:17-03283-LTS Doc#:24530-10 Filed:06/12/23 Entered:06/12/23 17:45:09 Desc:

Exhibit 10 Page 93 of 94
49

50

51

52

53

54

55

56 After the corrections, the main conclusions of the Opening Report are not altered. The Legacy 

57 Charge would have a negative effect on the economy of Puerto Rico and, therefore, over the

58 Commonwealth’s net revenue collections, which are main sources to fulfill the assumptions of the 

59 Commonwealth’s Certified Fiscal Plan and debt service. 

60 I declare under penalty of perjury that the foregoing is true and correct to the best of 

61 my knowledge, information, and belief.

62

63 ______________________

64 José I. Alameda Lozada, Ph.D.

65 June 2, 2023

66

67

68

69

70

71

72

73

Fiscal Year W/O 2.4 cents With 2.4 cents Debt Services Pensions Trust Sum W/O 2.4 cents With 2.4 cents

Net Revenue to GF Net Revenue to GF Re-estructured Pay Go Pension No CV % Net Revenue % Net Revenue

(in million $) (in million $) (in million $) (in million $) (in million $) (in million $)

2023 11,318 11,310 $1,150 $2,350 $1,000 $4,500 39.8% 39.8%

2024 11,308 11,293 $1,150 $2,352 $1,000 $4,502 39.8% 39.9%

2025 11,299 11,276 $1,150 $2,347 $1,000 $4,497 39.8% 39.9%

2026 11,290 11,259 $1,150 $2,338 $1,000 $4,488 39.8% 39.9%

2027 11,281 11,243 $1,150 $2,326 $1,000 $4,476 39.7% 39.8%

2028 11,271 11,226 $1,150 $2,317 $1,000 $4,467 39.6% 39.8%

2029 11,262 11,210 $1,150 $2,309 $1,000 $4,459 39.6% 39.8%

2030 11,253 11,194 $1,150 $2,300 $1,000 $4,450 39.5% 39.8%

2031 11,244 11,178 $1,150 $2,291 $1,000 $4,441 39.5% 39.7%

2032 11,235 11,161 $1,150 $2,283 $1,000 $4,433 39.5% 39.7%

Table 2 Corrected Table 21

Case:17-04780-LTS Doc#:3574-1 Filed:06/02/23 Entered:06/02/23 16:55:59 Desc:

Exhibit Annex 1 Page 3 of 3

Case:17-03283-LTS Doc#:24530-10 Filed:06/12/23 Entered:06/12/23 17:45:09 Desc:

Exhibit 10 Page 94 of 94