EXHIBIT 22 

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UNITED	STATES	DISTRICT	COURT

DISTRICT	OF	PUERTO	RICO

In	re:

THE	 FINANCIAL	 OVERSIGHT	 AND	

MANAGEMENT	BOARD	FOR	PUERTO	RICO,

as	representative	of

PUERTO	 RICO	 ELECTRIC	 POWER	

AUTHORITY (“PREPA”),

Debtor.

PROMESA	

Title	III

No.	17	BK	4780-LTS	

PUERTO	RICO	ENERGY	COMMISSION

																				Plaintiff,	

																																v.	

THE	 FINANCIAL	 OVERSIGHT	 AND	

MANAGEMENT	BOARD	FOR	PUERTO	RICO;	

PUERTO	 RICO	 ELECTRIC	 POWER	

AUTHORITY,

																				Defendants.

Adversary	No:	________

Plaintiff	Puerto	Rico	Energy	Commission (“PREC” or	the	“Commission”),	by	and	

through	its	undersigned	counsel,	pursuant	to	Rule	65 of	the	Federal	Rules	of	Civil	

Procedure,	respectfully	moves	the	Court	for	a	preliminary	injunction against	Defendants

Financial	Oversight	and	Management	Board	for	Puerto	Rico	(“FOMB”)	and	Puerto	Rico	

Electric	Power	Authority (“PREPA,” and	collectively	“Defendants”).		A	proposed	form	of	

order	granting	the	requested	relief	is	attached	hereto	as	Exhibit	A.

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PRELIMINARY	STATEMENT

1. On	March	4,	2016,	PREC	filed	a	Verified	Complaint for	Declaratory Judgment

and	Injunctive	Relief against	FOMB	and	PREPA, alleging	that	(a)	FOMB	is,	in	excess	of	its	

PROMESA	authority,	intending	to	mandate	or	authorize	PREPA	to	take	substantive	

electricity	actions	that	are	within	the	Commission’s	Commonwealth	law	jurisdiction	but	

that	the	Commission	has	not	approved;	and	(b)	PREPA	is	intending	to	carry	out	FOMB’s	

ultra	vires	mandates	and	authorizations,	violating	Commonwealth	law	by	ignoring	the	

Commission’s	orders	in	favor	of	FOMB’s ultra	vires	directives.		

2. This	combination	of	unlawful	actions	will	effectively	supersede the	

Commission’s	authority	to	determine	the	shape	and	operation	of	Puerto	Rico’s	electric

industry.		The	resulting	legal	confusion,	over	who	has	regulatory	authority	over	which	

industry	actions,	is	preventing	the	Commission	from	carrying	out	its	Commonwealth	law	

duties.		It	leaves	electricity	consumers	unprotected	from	PREPA’s	undisciplined	spending,	

and	it	leaves	existing	bondholders	and	prospective	investors	uninformed	about the	

regulatory	conditions	affecting	the	value	of	and	prospects	for	their	investments.

3. For	these	and	other	reasons	detailed	in	the	Verified	Complaint,	the	

Commission seeks through	that	Complaint	a	declaratory	order	and	injunctive	relief against	

the	Defendants.		The	Commission	now	files	this	Motion	for	Preliminary	Injunction	(the	

“Motion”)	in	connection	therewith.		Specifically,	the	Commission seeks:	(a) to	enjoin	the	

FOMB from	mandating	that	PREPA	take,	or	authorizing	PREPA	to	take, substantive	

electricity	actions that	fall	within	the	Commission’s	jurisdiction	but	have	not	been	

approved	by	the	Commission, and	(b) to	enjoin	PREPA	from	taking	substantive	electricity	

actions	mandated	or	authorized	by	the	FOMB	if	those	actions	fall	within	the	Commission’s	

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jurisdiction	but	have	not	been	authorized	by	the	Commission. See	Verified	Complaint. at	

¶¶ 92-113.		

4. We	have	been	here	before.		Rejecting	FOMB's	proposal	to	take	over	PREPA's	

entire	business,	this	Court	held	that	FOMB	does	not	have	"broad	executive	and	managerial	

authority	over	PREPA's	operations,"	nor	the	power	to	"interfere	unilaterally	with	

[PREPA's]	powers	...	or	with	[its]	property	or	revenues,"	nor	the	power	to	"control	virtually	

everything	PREPA	does."1		Despite	the	Court's	clarity,	FOMB	still	acts	as	if	it	has	powers	to	

direct	not	only	PREPA's	current	activities	but	also	the	substantive	transformation	of	Puerto	

Rico's	entire	electric	industry.		

5. The	requested	injunctions	will	lift the	legal	fog	caused	by	FOMB’s	overreach	

and	PREPA’s	noncompliance.		Then	the	Commission	can	carry out	its	responsibilities	and	

cause	PREPA	to	comply	with its	orders.		Those	responsibilities	and	orders,	existing	and	

imminent,	involve	efforts	to prevent	PREPA	from	spending	excessively; to set	rates	that	are	

“just	and	reasonable”	and	“nondiscriminatory”;	to	channel	PREPA’s	limited	funds	and	

limited	operational	capabilities	toward	a	cost-effective,	reliable	mix	of	generation,	

transmission,	distribution,	energy	efficiency,	storage,	renewable	and	microgrid	resources;	

to	determine	the	appropriate	mix	of	public	and	private	actors	that	can	cost-effectively	fund	

and	operate	Puerto	Rico’s	electricity	infrastructure;	and	thus	to	create	the	public	

confidence	in	the	Island’s	electric	service	so	necessary	to	Puerto	Rico’s	recovery.	

FACTUAL	BACKGROUND

 1		Opinion	and	Order	Denying	Urgent	Motion	of	FOMB	to	Confirm	Appointment	of	a	

Chief	Transformation	Officer	(Docket	Entry	No.	361,	Nov.	16,	2017)	at	10-16	(hereinafter,	

"CTO	Order").

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6. This	summary	distills	the	facts	set	forth	in	the	Verified	Complaint	at	paras.	33

to	56 and 64	to	67.

7. On	February	12,	2018,	PREPA	submitted	to	FOMB	a	Fiscal	Plan.		On	

information	and	belief,	this	Fiscal	Plan	proposes	actions	relating	to	PREPA's	power	supply	

mix,	capital	and	operating	expenditures,	internal	operations,	revenue	requirements	and	

rate	design,	among	other	things.		All	these	subjects	and	actions	lie	within	the	Commission's	

jurisdiction	under	Commonwealth	law.		Indeed,	a	number	of	the	actions	conflict	with,	or	

ignore,	prior	Commission	orders.		

8. PREPA	did	not	submit	these	proposed	actions	to	the	Commission.		FOMB	has	

declined	to	provide	the	document	to	the	Commission.

9. In	multiple	communications	to	the	Governor,	PREPA	and	the	Commission,	

FOMB	has	stated	or	implied	it	has	the	power	to	mandate	or	authorize	substantive	

electricity	actions	that	fall	within	the	Commission's	jurisdiction,	including	determining	and	

acquiring	the	mix	of	power	supply	resources;	prioritizing	investments	in	generation,	

transmission	and	distribution;	deploying	new	technologies;	establishing	and	revising	

demand	forecasts;	determining	the	mix	of	public	and	private	investment; and	establishing	

operational	standards.	

10. On	multiple	occasions,	PREPA	has	resisted	complying	with	Commission	

orders,	asserting	that	the	Commission's	authority	is	superseded	by	FOMB's	claimed	

authority.		PREPA	intends	to	take	the	substantive	electricity	actions	specified	in	its	Fiscal	

Plan	without	Commission	approval,	on	the	grounds	that	FOMB's	approval	of	the	Fiscal	Plan	

is	preemptive.

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11. When	taking	those	actions described	in	its	Fiscal	Plan,	PREPA	will	incur	

costs.		The	Commission	then	will	have	no	choice	but	to	make	ratepayers	pay	for	those	costs,	

regardless	of	their	reasonableness.		(Because	PREPA	has	no	private	shareholders,	the	only	

possible	cost-bearers	are	its	ratepayers.)	

12. Dissatisfied	with	the	performance	of	a	vertically	integrated	monopoly	that	

was	unregulated	for	70	years,	the	Legislature	through	Act	57-2014	established	the	

Commission.		The	Legislature’s	express	purpose	was to	subject	PREPA	to	regulation	that	is	

professional,	objective,	technically	based,	non-political	and	transparent,	using	rigorous	

administrative	law	procedures	common	among	Mainland	states.		FOMB	has	none	of	this	

professional	regulatory	experience,	and	uses	none	of	these	administrative	procedures—

unsurprisingly	because	Congress	did	not	grant	it	the	powers	that	the	Legislature	has	vested	

in	the	Commission.	

ARGUMENT

13. The	requirements	of a	preliminary	injunction	are:	(1) a	likelihood	of	success	

on	the	merits; (2) irreparable	harm in	the	absence	of	preliminary	relief;	(3) the	balance	of	

equities	favors an	injunction; and	(4) an	injunction	serves the public	interest.	 Winter	v.	Nat.	

Res.	Def.	Council,	Inc.,	555	U.S.	7,	20	(2008).		Courts	have	discretion	to	balance these	factors.		

See	Vaqueria	Tres	Monjitas,	Inc. v.	Irizarry,	587	F.3d	464,	482	(1st	Cir.	2009).		The	requested	

injunctions	meet	all	these	requirements.

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I. The	Commission	Is	Likely	to Succeed	on	the	Merits	of	Its	Claim

A. FOMB	has	no	power	to	mandate	or	authorize	substantive	electricity	

actions	the	Commission	has	not	authorized

14. Multiple	PROMESA	provisions	make	clear	that	FOMB's	powers	are	largely	

fiscal,	not	substantive.

15. The	list	begins	with	§	101(a):		"The	purpose	of	the	Oversight	Board	is	to	

provide	a	method	for	a	covered	territory	to	achieve	fiscal	responsibility	and	access	to	the	

capital	markets."		The	subjects	of	“fiscal	responsibility”	and	“access	to	the	capital	markets”	

do	not	include	transforming	electric	industry	structure,	selecting	power	supply	mix,	or	

determining	transmission	or	distribution	policy	or	asset	ownership.

16. This	distinction	between	fiscal	and	substantive	matters	is	repeated	in	

PROMESA’s	provisions	on	the	purposes	and	elements	of	Fiscal	Plans:		

Purposes:		The	purpose	of	a	Fiscal	Plan	is	to	create	conditions	for	a	"sustainable	

level	of	debt";2 and	to	"provide	a	method	to	achieve	fiscal	responsibility	and	access	

to	the	capital	markets...."3		This	Court	sees	purposes	similarly:		PROMESA-mandated

fiscal	plans	and	budgets	"provide	blueprints	for	revenues,	expenses,	debt,	and	

capital	resources,	and	they	are	used	to	substantiate	methods	for	responsible	

financial	management."4

 2		Section	104(i)(1)(B).

3 Section	201(b)(1).

4		CTO	Order	at	12.

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Elements:		A	Fiscal	Plan	must	provide	for	credible	“estimates	of	revenues	and	

expenditures";5 "ensure	the	[sufficient]	funding	of	essential	services";6 provide	

"adequate	funding	for	public	pension	systems"	and	for	the	"elimination	of	structural	

deficits";7 provide	for	a	"debt	burden	that	is	sustainable";8 "improve	fiscal	

governance,	accountability,	and	internal	controls";9 "enable	the	achievement	of	

fiscal	targets";10 include	"independent	forecasts	of	revenue";11 and	include	a	"debt	

sustainability	analysis."12

All	these	purposes	and	elements	are	fiscal.		They	give	the	FOMB	no	authority	to	control,	

through	fiscal	plans,	substantive	decisions	about	Puerto	Rico's	electric	industry.

17. More	confirmation	of	the	fiscal-substantive	distinction	appears	in	§	203.		

That	provision	requires	the	Commonwealth	to	submit	periodic	reports	comparing	actual	

revenues	and	expenditures	to	budgets.		It	does	not	require—indeed	no	PROMESA	provision	

requires—reports	on	substantive	actions	(e.g.,	transmission	lines	constructed,	competitive	

markets	created,	power	supply	plans	implemented).		And	if	there	is	an	"inconsistency"	

between	approved	and	actual	budget	figures,	FOMB	can	only	"make	reductions	in	nondebt	

expenditures,"	"institute	hiring	freezes,"	or	prohibit	certain	contracts	or	transactions,	§	

203(d)(2)(A).		Those	are	the	FOMB's	only	tools;	it	has	no	authority	to	mandate	particular	

 5 Section	201(b)(1)(A).

6		Section	201(b)(1)(B).

7		Section	201(b)(1)(C)	and	(D).

8		Section	201(b)(1)(E).

9		Section	201(b)(1)(F).

10		Section	201(b)(1)(G).

11		Section	201(b)(1)(H).

12		Section	201(b)(1)(I).	

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activities,	like	power	supply	mix,	new	ownership	arrangements	or	new	market	structures.		

FOMB	can	cancel	the	actions	it	took	under	§	203(d)(2)(A)	if	the	instrumentality	at	issue	has	

"initiated	appropriate	measures	to	reduce	expenditures	or	increase	revenues,"	§	203(e);	

but	again,	FOMB	has	no	power	to	order	the	instrumentality	to	conform	its	actions	to	any	

FOMB	substantive	vision.		The	FOMB's	powers	are	fiscal,	not	substantive.

18. It	is	unsurprising	that	the	Fiscal	Plan	must	"provide	for	capital	expenditures	

and	investments	necessary	to	promote	economic	growth,"	§	201(b)(1)(J).		Without	

"expenditures	and	investments,"	there	would	be	no	need	to	address	revenues,	debt,	

funding,	targets	and	all	the	other	items	listed	in	§	201(b)(1).		But	the	legal	source	of	the	

"expenditures	and	investments"	is	not	FOMB's	substantive	preferences,	because	PROMESA	

gives	FOMB	no	power	over	electricity	industry	substance.		The	 legal	source	of	

"expenditures	and	investments"	is	Commonwealth	law—specifically,	Act	57	as	applied	by	

the	Commission,	or	other	statutes	the	Legislature	might	enact.		This	reasoning	finds	explicit	

support	in	§	201(b)(1)(N),	which	establishes	FOMB’s	key	constraint:		A	plan	certified	by	

the	FOMB	must	"respect	the	relative	lawful	priorities	...	in	...	other	laws	...	of	a	covered	

territory	...	in	effect	prior	to	the	date	of	enactment	of	this	Act."

19. Any	remaining	doubt	is	removed	by	§	205(a).		It	authorizes	FOMB	to	make	

recommendations about,	among	other	things,	"the	modification	of	existing	revenue	

structures,	or	the	establishment	of	additional	revenue	structures,"	§	205(a)(3);	

"modifications	or	transfers	of	the	types	of	services	that	are	the	responsibility	of,	and	are	

delivered	by	the	territorial	government,"	§	205(a)(5);	"modifications	of	the	types	of	

services	that	are	delivered	by	entities	other	than	the	territorial	government	under	

alternative	service	delivery	mechanisms,"	§	205(a)(6);	and	"the	privatization	and	

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commercialization	of	entities	within	the	territorial	government,"	§	205(a)(10).		The	

territorial	government	must	consider	these	recommendations	and	explain	any	rejection,	

but	it	has	no	obligation	to	accept	them,	§ 205(b).		If	these	substantive	matters	were	within	

the	FOMB's	mandatory	authority,	the	recommendatory	provisions	of	§	205(a)	and	(b)	

would	be	surplusage.		The	FOMB's	mandatory	authority	is	fiscal,	not	substantive.

20. There	is	more.		Section	209	requires	FOMB	to	terminate	when	the	territorial	

government	(a)	has	"adequate	access	to	short-term	and	long-term	credit	markets	at	

reasonable	interest	rates";	(b)	has,	for	four	consecutive	fiscal	years,	developed	its	budgets	

consistent	with	"modified	accrual	accounting	standards";	and	(c)	has	lived	within	those	

budgets.		FOMB's	termination	has	no	substantive	precondition.		FOMB's	purpose	is	fiscal,	

not	substantive.

21. Real	substantive	authority	for	FOMB	appears	in	only	two	situations.		The	first	

is	§	204(b)(2),	authorizing	FOMB	to	establish	policies	"to	ensure	that	proposed	contracts	

promote	market	competition...."		In	PREPA’s	context,	it	is	not	clear	whether	this	provision	

refers	to	competition	among	prospective	contractors	to	PREPA,	or	instead	refers	to	

competition	to	provide	electric	services	(e.g.,	generation,	transmission,	distribution,	

storage,	microgrids,	demand	response	and	energy	efficiency).		Regardless,	neither	purpose	

authorizes	FOMB	to	issue	mandates	about	these subjects.	

22. The	second	exception	is	in	Title	V,	which	creates	a	path	by	which	FOMB	can	

approve	a	"Critical	Project."		Title	V	makes	Congress’s	intent	clear:		FOMB's	authority	over	

Critical	Projects	must	support	the	Commission,	not	preempt	it.		Specifically,	§	503(b)(1)(D)	

requires	that	any	project	connecting	to	PREPA's	transmission	or	distribution	facilities	

"shall	be	ineligible	for	Critical	Project	designation"	if	the	Commission	timely	determines	the	

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project	will	"adversely	affect	an	approved	Integrated	Resource	Plan."		Note	also	that	Title	V,	

which	creates	the	Revitalization	Coordinator	role,	confines	that	role	to	making	

recommendations to	the	FOMB	about	Critical	Projects.		The	Revitalization	Coordinator has	

no	other	role.		It	certainly	is	legitimate	for	the	Coordinator	to	have	a	vision	for	Puerto	Rico's	

electric	industry	that	guides	his	recommendations	on	particular	projects.		But	PROMESA	

gives	neither	him	nor	the	FOMB	any	substantive	authority	to	mandate	that	vision.		As	this	

Court	held:

Although	the	FOMB's	fiscal	plan	and	budgeting	powers	give	it	a	strong	and	

substantially	determinative	voice	in	overall	strategy	regarding	the	

Commonwealth's	revenues,	expenses,	and	general	direction	for	responsible	

financial	management,	they	do	not	imply	that	the	FOMB's	role	includes	

detailed	operational	planning	or	direct	executive	authority	over	the	

implementation	of	those	plans	and	budgets.13

The	FOMB's	powers	are	fiscal,	not	substantive.

B. FOMB’s	directives	to	PREPA,	if	taken	within	FOMB’s	PROMESA	

authority,	preempt	the	Commission	only	when	it	is	not	possible	to	

design	those	directives	consistently	with	Commonwealth	law	

23. Repeatedly	and	explicitly,	PROMESA	directs	FOMB	to	act	consistently	with	

Commonwealth	law.		

24. Section	201(b)(1)(A)(i)	provides	that	a	Fiscal	Plan	shall	"provide	for	

estimates	of	revenues	and	expenditures	in	conformance	with	agreed	accounting	standards	

and	be	based	on	...	applicable	law..."	(emphasis	added).		Act	57	is	"applicable"	here	because	

it	directs	the	Commission	to	ensure	that	rates	are	"just	and	reasonable."		Thus,	FOMB	may	

not	approve	budgets	or	prescribe	actions	that	lead	to	rates	that	are	not	just	and	reasonable.		

 13		CTO	Order	at	12.

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The	legal	duty	to	determine	what	is	just	and	reasonable	lies	exclusively	with	the	

Commission.

25. Section	201(b)(1)(B)	requires	the	Fiscal	Plan	to	"ensure	the	funding	of	

essential	services."		The	legal	duty	to	determine	what	services	are	essential,	given	the	prior	

reference	to	"applicable	law,"	lies	exclusively	with	the	Commission.

26. Section	201(b)(1)(J)	requires	the	Fiscal	Plan	to	"provide	for	capital	

expenditures	and	investments	necessary	to	promote	economic	growth...."		That	provision	

does	not	mean	that	the	FOMB	determines	what expenditures	and	investments	are	

necessary;	it	means	only	that	for	the expenditures	and	investments	that	are	necessary,	the	

Fiscal	Plan	must	show	the	funding	sources.		Under	Commonwealth	law,	the	legal	duty	to	

determine	what	capital	expenditures	and	investments	are	necessary	for	electric	service	lies	

exclusively	with	the	Commission.		That	Commission	role	is	confirmed	by	Section	

503(b)(1)(D)	which,	as	explained	in	para.	79	above,	preserves	the	Commission's	power	to	

prevent	Energy	Projects	that	"adversely	affect	an	approved	Integrated	Resource	Plan."

27. Section	201(b)(1)(N)	requires	the	FOMB-certified	Fiscal	Plan	to	"respect	the	

relative	lawful	priorities	...	in	the	...	other	laws	...	of	a	covered	territory	...	in	effect	prior	to	

the	date	of	enactment	of	this	Act."		Those	laws	include	Act	57,	as	applied	by	the	

Commission.

28. Separately	and	together,	the	above-mentioned	PROMESA	provisions	obligate	

FOMB	to	act	consistently	with	Commission	authority,	unless	doing	so	would	undermine	

PROMESA	goals.		To	satisfy	PROMESA,	FOMB	must	shape	its	decisions	to	avoid	

undermining	Commonwealth	policy.		Only	when	such	shaping	is	impossible,	only	when	

FOMB	cannot	achieve	a	PROMESA	objective	without	preempting	Commonwealth	law,	may	

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preemption	occur.		FOMB	cannot	be	a	bull	in	the	Commonwealth’s	china	closet.		As	this	

Court	held:		“The	primary	mechanism	through	which	fiscal	plans	and	instrumentality	

budgets	are	developed	under	PROMESA	sections	201	and	202	looks	first	to	the	territorial	

government,	not	the	FOMB,	for	origination	and	refinement.		While	the	FOMB	can	certify	its	

own	fiscal	plan	and	budget	under	certain	circumstances,	it	may	only	do	so	after	an	

interactive	process	with	the	territorial	government	does	not	yield	a	plan	or	budget	that	is	

acceptable	to	the	FOMB.”14

29. Under	PROMESA	§	4,	the	Commission's	decisions	under Commonwealth	law	

cannot	conflict	with	the	FOMB's	requirements.		But	that	provision	limits	Commission	

actions	only	where	FOMB is	acting	within	its	authority.

30. PROMESA	thus	addresses	Commonwealth	law	in	terms	of	preservation	and	

preemption.		The	necessary	logical	combination	of	those	two	principles	is	this:		If	in	solving	

a	problem	within	its	statutory	scope,	FOMB	has	a	choice	between	an	action	that	

undermines	Commonwealth	law	and	an	action	that	does	not,	FOMB	must	choose	the	latter.		

Where	inconsistency	is	unavoidable,	FOMB	prevails.		Finding	inconsistencies	and	designing	

ways	to	avoid	them	requires	coordination.		As	this	Court	held,	PROMESA	"requires	the	

FOMB	and	the	territorial	government	to	work	together	to	establish	a	fiscally	responsible	

path	forward	that	is	acceptable	to	the	FOMB."15

 14		CTO	Order	at	10.

15		CTO	Order	at	19.

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II. Absent	an	injunction,	the	Commission will	suffer	irreparable	harm	

31. A	movant	may	meet	its	burden	by	showing	that	it	is	“likely	to	suffer	this	harm	

before	a	decision	is	rendered	on	the	merits.”		Puerto	Rico	Conserv.	Found.	v.	Larson,	797	F.	

Supp.	1066,	1071	(D.P.R.	1992).		For	these	purposes,	“irreparable	injury”	means	“an	injury	

that	cannot	adequately	be	compensated	for	either	by	a	later-issued	permanent	injunction,	

after	a	full	adjudication	on	the	merits,	or	by	a	later-issued	damages	remedy.”		Rio	Grande	

Community	Health	Ctr.,	Inc.	v.	Rullan,	397	F.3d	56,	76	(1st	Cir.	2005).

32. Commonwealth	law,	primarily	Act	57-2014,	requires	the	Commission	to	

establish	and	enforce	standards	for	PREPA's	performance,	so	that	customers	will	receive	

reliable	electric	service	at	reasonable	cost.		The	Commission,	like	any	utility	regulator,	

pursues	this	purpose	by,	among	other	things,	determining	the	resource	mix	for	Puerto	

Rico's	electricity	customers;	establishing	the	market	structures	and	compensation	policies	

that	attract	the	suppliers	most	likely	to	provide	those	resources	cost-effectively;	setting	

pricing	policies	that	attract	investors	while	protecting	customers	from	abuse;	and	

designing	rate	structures	that	induce	efficient	consumption	behavior.

33. FOMB's	insistence	on	dictating	the	substantive	shape	of	Puerto	Rico's	electric	

industry makes	it	impossible	for	the	Commission	to	achieve	these	ends.		For	example,	the	

sum	of	FOMB	two	central	positions—that	its	authority	covers	substantive	electricity	

matters	and	that	the Commission	is	preempted	from	controlling	PREPA's	costs	by	

preventing	imprudent	costs	before	they	occur—means	the	Commission	cannot	ensure	that	

rates	are	just	and	reasonable.		FOMB's	legal	position	has	emboldened	PREPA	to	resist,	or	

delay	complying	with,	multiple	Commission	orders,	adding	to	the	Commission's	obstacles.		

This	harm	is	irreparable	because	once	PREPA	makes	inefficient	decisions,	the	Commission	

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has	no	choice	but	to	set	rates	that	cause	customers	to	pay	the	extra	costs.	 See	Verified	

Complaint	at para.	54.	 The	Commission	cannot	unring	a	bell	PREPA	has	rung.		

34. Moreover,	the	combination	of	FOMB's	and	PREPA's	behavior	forces	the	

Commission	to	divert	its	limited	resources	from	proceedings	designed	to	improve	PREPA's	

performance	to	controversies	over	whether	the	Commission	has	any	responsibility	for	

PREPA's	performance.		There	is	no	way	to	compensate	the	Commission	for	these	

impediments	to	its	effectiveness.

III. The	Balance	of	Equities	Weighs	in	favor	of	Granting	the	Requested	Relief

35. Where	the	likely	harm	to	the	moving	party	absent	an	injunction	outweighs	

the	harm	that	the	defendant	would	sustain	from	an	injunction,	the	motion	should	be	

granted.		Vargas-Figueroa	v.	Saldana,	826	F.2d	160,	162	(1st	Cir.	1987);	Vaqueria	Tres	

Monjitas,	Inc.	v.	Laboy,	No.	CIV.	04-1840	DRD,	2007	WL	7733665,	at	*3	(D.P.R.	July	13,	

2007),	aff'd	sub	nom.	Vaqueria	Tres	Monjitas,	Inc.	v.	Irizarry,	587	F.3d	464	(1st	Cir.	2009).

36. A	preliminary	injunction	will	cause	no	hardship	to	FOMB;	indeed	it	will	be	a	

benefit.		It will	relieve	FOMB	of	its	self-assigned	(but	not	statute-assigned)	involvement	in	

electricity	policy	details	for	which	its	members	have	no	preparation	or	expertise,	enabling	

it	to	channel	its	resources	elsewhere.		With	an	unobstructed	Commission	performing its	Act	

57	duties	to	improve	PREPA's	performance,	FOMB	can	more	reliably	assess	whether	

PREPA's	fiscal	projections	and	plans	make	sense	in	light	of	the	substantive	priorities	set	by	

the	Commission.		PREPA	will	benefit	too:		The	confusion	from	two	overlapping	masters	will	

be	replaced	with	the	discipline	induced	by	the	coordinated	combination	of	PREC's	

substantive	leadership	and	FOMB's	fiscal	oversight.

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IV. An	Injunction	Serves	the Public	Interest

37. The	requested	injunctions	will	reduce	situations	in	which	PREPA	operates	

inefficiently,	incurring	costs	undisciplined	by	Commission	action.		The	restoration	of	the	

Commission's	role	will	lead	to	a	more	efficient	company.		The	reduction	in	costs	will	benefit	

all	elements	of	the	public—Commonwealth	and	municipal	governments,	electricity	

customers,	electricity	entrepreneurs	seeing	opportunities	to	bring	modern	technology	to	

the	Island’s	electric	infrastructure,	existing	and	prospective	bondholders,	businesses	

contemplating	a	move	to	or	from	Puerto	Rico,	PREPA	employees	and	retirees—everyone.		

Prospective	investors	will	see	that	success	in	Puerto	Rico's	electric	industry	depends	on	

merit,	and	that	decisions	on	the	industry's	structure	and	operational	standards	will	based	

on	technical,	professional	and	objective	judgments	arrived	at	through	transparent,	rigorous	

producers	commonly	used	in	in	Mainland	states.			

38. The	requested	injunctions	will	avoid,	at	least	temporarily,	a	continuous	

series	of	preemption	disputes	over	who	has	authority	to	mandate	or	approve	various	

actions:		capital	expenditures,	operational	expenditures,	power	supply	acquisitions	and	

contract	executions.		Such	disputes,	brought	to	an	already	busy	Court,	cause	uncertainty	

and	delay	in	matters	essential	to	Puerto	Rico's	recovery.	

39. Finally,	the	injunctions will	serve	the	general	public	interest	of	enforcing	the	

Commonwealth’s	regulations	and	upholding	the	rule	of	law.		See,	e.g.,	Wiese	v.	Becerra,	263	

F.	Supp.	3d	986,	994	(E.D.	Cal.	2017)	(“The	State	has	a	substantial	interest	in	.	.	.	enforcing	

validly	enacted	statutes.”);	Kansas	Hosp.	Ass’n	v.	Whiteman,	835	F.	Supp.	1556,	1566	(D.	Kan.	

1993),	aff’d	sub	nom. Williams	v.	Whiteman,	36	F.3d	1106	(10th	Cir.	1994)	(where	“effect	of	

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16

a	 preliminary	 injunction	 would	 be	 to	 enforce	 the	 federal	 law	 and	 regulations	 ...,	 [a	

preliminary	injunction]	would	clearly	be	in	the	public	interest”).		

V. The	Commission Should	Not	Be	Required	to	Post	a	Bond

40. The	Commission	respectfully	asks	that	the	Court,	in	issuing	injunctive	relief,	

waive	the	requirement	of	a	bond.		A	bond	is	not	mandatory	under	Rule	65(c);	rather,	the	

matter lies	within	a	court’s	discretion.		See	Crowley	v.	Local	No.	82,	Furniture	&	Piano	

Moving,	Furniture	Store	Drivers,	Helpers,	Warehousemen,	&	Packers,	679	F.2d	978,	1000	(1st	

Cir.	1982),	judgment	rev’d	on	other	grounds,	467	U.S.	526	(1984).		In	Crowley,	the	First	

Circuit	affirmed	the	district	court’s	decision	to	waive	the	bond	requirement,	recognizing	

that	courts	may forgo	this	requirement	in	“suits	to	enforce	important	federal	rights	or	

public	interests.”		Id.	at	1000	(quotation	omitted);	see	also	Total Petroleum	Puerto	Rico	

Corp.	v.	Quintana,	No.	16-cv-2979,	2016	WL	6998612,	at	*3	(D.P.R.	Nov.	30,	2016);	

Watchtower	Bible	Tract	Society	of	New	York,	Inc.	v.	Municipality	of	Aguada,	160	F.Supp.3d	

440,	448-49	(D.P.R.	2016). Similarly,	in	Moltan	Co.	v.	Eagle-Picher	Industries,	Inc.,	55	F.3d	

1171,	1176	(6th	Cir.	1995),	the	Sixth	Circuit	held	that	the	posting	of	security	under	Rule	

65(c)	was	not	required based	on	the	likelihood	of	success	and	the	strong	public	interest	

involved.

41. The Commission seeks	to	enforce,	and	preserve	its	ability	to	enforce,

Commonwealth	regulatory	law	in	service	of	the	public	interest.	 Act	57-2014	dictates	that	

the	Commission establish	rates and	ensure	that	electricity	operations serve	the	“public	

interest.”	 As	discussed	in	Section	I	supra,	the	Commission has	a strong likelihood	of	success	

on	the	merits.	 These	factors	argue	against	the	required posting	of a	bond.

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CONCLUSION

42. For	 the	 foregoing	 reasons,	 the	 Commission respectfully	 requests	 that	 the	

Court	grant	the	requested	relief	as	set	forth	in	the	proposed	order	attached	hereto	as	Exhibit	

A,	and	grant	such	other	and	further	relief	as	is	proper.

I	hereby	certify	that	on	this	same	date	a	true	and	exact	copy	of	this	Motion	was	

filed	with	the	Clerk	of	Court	using	the	CM/ECF	system,	which	will	notify	a	copy	to	counsel	

of	record.		Also,	a	copy	of	this	document	will	be	notified	via	electronic	mail	to	all	case	

participants.

RESPECTFULLY	SUBMITTED,	in	San	Juan,	Puerto	Rico,	this	4th day	of	March,	2018.	

Dated:		March	4,	2018 Respectfully	submitted,

San	Juan,	Puerto	Rico PUERTO	RICO	ENERGY	COMMISSION

By	its	attorneys:

/s/ Alejandro	J.	Figueroa-Ramírez

USDC	No.	305603

Alejandro	J.	Figueroa-Ramírez,

General	Counsel

Puerto	Rico	Energy	Commission

268	Muñoz	Rivera	Ave.,	Suite	702

San	Juan,	PR	00918

Tel:		(787)	523-6262

Email:		afigueroa@energia.pr.gov

/s/	Scott	Hempling	

Admitted	pro	hac	vice

Scott	Hempling

Scott	Hempling,	Attorney	at	Law,	LLC

417	St.	Lawrence	Dr.

Silver	Spring,	MD	20901

Tel:		(301)	754-3869

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Email:		shempling@scotthemplinglaw.com

/s/	Mariana	I.	Hernández	Gutiérrez

USDC	No.	229102

Mariana	I.	Hernández	Gutiérrez

Hernández-Gutiérrez	Law,	PSC

1519	Ponce	de	Leon	Ave.

First	Federal	Bldg.	Suites	713-715

San	Juan,	PR	00909

Tel:		(787)	460-5715

Email:		mhernandez@mihglaw.com

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EXHIBIT	A	

(Proposed	Preliminary	Injunction	Order)

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UNITED	STATES	DISTRICT	COURT

DISTRICT	OF	PUERTO	RICO

In	re:

THE	 FINANCIAL	 OVERSIGHT	 AND	

MANAGEMENT BOARD	FOR	PUERTO	RICO,

as	representative	of

PUERTO	 RICO	 ELECTRIC	 POWER	

AUTHORITY	(“PREPA”),

Debtor.

PROMESA	

Title	III

No.	17	BK	4780-LTS	

PUERTO	RICO	ENERGY	COMMISSION

																					Plaintiff,	

																																v.	

THE FINANCIAL	 OVERSIGHT	 AND	

MANAGEMENT	BOARD	FOR	PUERTO	RICO;	

PUERTO	 RICO	 ELECTRIC	 POWER	

AUTHORITY,

																				Defendants.

Adversary	Proc.	No:	________

[PROPOSED]	ORDER	GRANTING	PUERTO	RICO	

ENERGY	COMMISSION’S	MOTION	FOR	PRELIMINARY	INJUNCTION

Upon	 consideration	 of	 Puerto	 Rico	 Energy	 Commission’s	 Motion	 for	 Preliminary	

Injunction (the	“Motion”),	seeking	the	issuance	of	a	preliminary	injunction	prohibiting	the	

Federal	 Oversight	 and	 Management	 Board	 for	 Puerto	 Rico	 ("FOMB")	 from	 mandating	 or	

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2

authorizing	 substantive	 electricity	 actions	 not	 authorized	 by	 the	 Commission,	 and	

prohibiting	PREPA	from	taking	substantive	electricity	actions	directed	by	the	FOMB	that	are	

within	the	Commission’s	jurisdiction	but	which	the	Commission	has	not	authorized,	until	the	

Court	resolves	the	controversy	on	the	scope	of	the	FOMB’s	powers	as	set	forth	in	Plaintiff’s	

Verified	 Complaint	 for	 Declaratory	 Judgment	 and	 Injunctive	 Relief,	 ECF	 No.	 [___]	 (the	

“Verified	Complaint”);	and	the	Court	having	jurisdiction	over	this	matter	under	28	U.S.C.	§§	

1331	and	1332,	Article	III,	Section	2	of	the	U.S.	Constitution,	48 U.S.C.	§	2166,	and	28	U.S.C.	§	

1367;	and	upon	consideration	of	the	Motion;	and	that	notice	of	the	Motion	was	adequate	and	

proper	under	the	circumstances	and	that	no	further	or	other	notice	need	be	given;

WHEREAS,	 Plaintiff	is	likely	 to	 prevail	 on	 the	 merits	 of	 the	 claims	 set	 forth	in	 the	

Verified	Complaint;	and

WHEREAS,	 the	 Defendants’	 imminent	 ultra	 vires	 actions	 will	 irreparably	 harm	

Plaintiff,	and	there	is	no	adequate	remedy	at	law;	and

WHEREAS,	the	balance	of	equities	favors	providing	the	relief	granted	herein;	and

WHEREAS,	 the	public	interest	is	 favored	by	entering	 the	preliminary	injunction	

against	the	Defendants;	it	is	hereby

ORDERED,	that	the	Motion	is	granted	as	set	forth	herein;	and	it	is	further

ORDERED,	 that	 the	FOMB	is	directed	 to	refrain	 from mandating	or	authorizing	

PREPA	 to	 take	 substantive	 electricity	 actions	 that	 are	 within	 the	 Commission’s	

jurisdiction	but	not	authorized	by	the	Commission,	and	PREPA	is	directed	to	refrain	from	

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3

taking	substantive	electricity	actions	mandated	by	FOMB	if	such	actions	are	within	the	

Commission’s	jurisdiction	but	not	authorized	by	the	Commission,	and	both	are	directed	

to	act	consistently	with	such	relief,	until	further	order	of	the	Court;	and	it	is	further

ORDERED,	that	Plaintiff	shall	not	be	required	to	post	security	in	connection	with	

the	relief	granted	herein.

Dated: ,	2018

SO	ORDERED:

The	Honorable	Laura	Taylor	Swain

United	States	District	Judge

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