EXHIBIT 27 

Case:17-03283-LTS Doc#:4014-23 Filed:10/04/18 Entered:10/04/18 16:51:23 Desc:

Exhibit 27 Page 1 of 3
Corey Brady - Weil, Gotshal & Manges LLP

2018-10-03 00:26:31

Puerto Rico

UTIER Chief Calls PREPA Emergency Plan a ‘Publicity Campaign’ as Labor Leaders

Underline Opposition to Privatization Plans

Wed 02/28/2018 17:47 PM

Relevant Document:

Press Release (Spanish)

During a press conference today detailing their opposition to the planned privatization of the Puerto

Rico Electric Power Authority, union leaders dismissed PREPA’s Strategic Emergency Operations Plan

as a “publicity campaign” aimed at “blackmailing” the federal court to approve additional financing

for the public utility.

PREPA governing board President Ernesto Sgroi said on Friday that despite receipt of a$300 million

loan from the Puerto Rico Treasury, PREPA would continue implementation of the emergency plan to

“preserve liquidity and conserve money” and to show its commitment to more efficient operations.

However, Angel Figueroa Jaramillo, the president of PREPA’s main union known as UTIER, said today

that it is “not true” that an emergency plan is being implemented.

“This was an unnecessary publicity campaign that put the public at total unease. How many outages

have there been since Sunday? The only thing they have done is to shut off emergency plants like

Cambalache and Mayaguez to save money,” Figueroa Jaramillo said. He added that shuttering such

“peaking” plants is common practice when there is sufficient generation to cover needs because they

are costly to operate and are usually brought online only to cover demand when other generating

assets are offline.

Figueroa Jaramillo also criticized the board for making its announcement after Judge Laura Taylor

Swain approved a $300 million loan following officials’ warnings during a court hearing that PREPA

would be forced to cease operations without outside financing.

The UTIER chief, leaders of two other PREPA unions and the heads of two other associations

representing PREPA management employees and retired workers argued during a press conference

that Gov. Ricardo Rosselló’s planned privatization of the utility is the “wrong public policy that goes

against the best interests of the people of Puerto Rico.” They also accused the administration of

engaging in “demagoguery tactics” to push the privatization proposal while broad sectors of the

public are still without electric power services in their residences as Hurricane Maria restoration work

continues.

In announcing his privatization plan, which involves selling off generation assets and leasing

PREPA’s transmission and distribution system, the governor said the move would lower costs and

improve service by introducing competition and providing consumers with choices for where to get

their electric power service. However, Figueroa Jaramillo predicted today that both talking points

would diminish from the public discourse in the future.

Figueroa Jaramillo said he asked PROMESA board members during a recent meeting specifically how

they believe electricity prices will fall under a privatization and “their answer ... was silence.” He said

it was a “pro forma” meeting between the board and union leaders during which board members

made clear they intend to cut pensions.

Meanwhile, he added that the small size of the island market makes it a “natural monopoly” where

no investor will come to compete against other investors, but it will rather require a fixed return on

investment, pointing to PREPA’s power purchase contracts with the two private power plants.

Case:17-03283-LTS Doc#:4014-23 Filed:10/04/18 Entered:10/04/18 16:51:23 Desc:

Exhibit 27 Page 2 of 3
The labor representatives acknowledged that PREPA must go through a “transformation process”

that improves governance and increases efficiency. However, they argued that Puerto Rico’s goal of

more efficient and less costly power would be more easily achieved by keeping PREPA a public

corporation, since ratepayers will have to bear the costs of the profits that private operators will seek

through the privatization.

They said that the utility run by the city of Austin, Texas, is a good model for PREPA to emulate. The

eighth-largest public power utility in the U.S., its client base and distribution area are similar in size

to PREPA’s.

The privatization opponents also said that proponents are overstating the need for investment in new

generating plants and other assets, saying that current capacity is more than twice typical demand.

While more efficient generating units are needed, they said these can be built at existing plants,

which would substantially reduce costs.

Figueroa Jaramillo also noted PREPA’s electric grid was being rebuilt with federal disaster funding,

decreasing the argument for the need for private investment. He said future improvements could be

financed through specific rate hikes.

The UTIER chief also argued that increasing solar and other renewable power through increased

distributed generation, which relies on smaller generation facilities including residence- and

business-based systems, would also develop more easily under a public utility not concerned with

making profits.

Reorg Research, Inc. (“Reorg”) makes no representation or warranty, express or implied, as to the completeness or accuracy of this information and assumes no

responsibility to update this information. This information is not, and should not be construed as, an o,er to sell or the solicitation of an o,er to buy any securities. In

addition, nothing contained herein is intended to be, nor shall it be construed as an investment advice, nor is it to be relied upon in making any investment or other

decision. Reorg does not act as a broker, dealer or investment adviser. Prior to making any investment decision, you are advised to consult with your broker,

investment adviser, or other appropriate tax or financial professional to determine the suitability of any investment. Reorg shall not be responsible or have any

liability for investment decisions based upon, or the results obtained from, the information provided.

© Copyright 2012 - 2018

Case:17-03283-LTS Doc#:4014-23 Filed:10/04/18 Entered:10/04/18 16:51:23 Desc:

Exhibit 27 Page 3 of 3