III 

118TH CONGRESS 

1ST SESSION S. CON. RES. 12 

Recognizing the need for a sustainable, economically viable, and fair debt 

restructuring plan for the Puerto Rico Electric Power Authority. 

IN THE SENATE OF THE UNITED STATES 

JULY 12, 2023 

Mr. MENENDEZ (for himself and Ms. WARREN) submitted the following concurrent resolution; which was referred to the Committee on Energy and 

Natural Resources 

CONCURRENT RESOLUTION 

Recognizing the need for a sustainable, economically viable, 

and fair debt restructuring plan for the Puerto Rico 

Electric Power Authority. 

Whereas the electrical system of Puerto Rico has been fragile 

and suffered from a lack of investment for years, since 

well before Hurricane Marı ́a destroyed the system in 

2017; 

Whereas, despite local and Federal efforts to rebuild the electrical grid of Puerto Rico, that electrical grid remains extremely fragile and vulnerable; 

Whereas, in September 2022, category-1 Hurricane Fiona 

triggered an island-wide blackout for 1,500,000 customers; 


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Whereas the population of Puerto Rico, the median household 

income of which is less than 1⁄2 of that of the population 

of the poorest State, pays among the highest electric 

rates in the United States; 

Whereas the transition to renewable energy is key to reducing 

electric rates in Puerto Rico by eliminating dependence 

on imported, price-volatile fossil fuels, which constitute 

up to 60 percent of the budget of the Puerto Rico Electric Power Authority (referred to in this preamble as the 

‘‘PREPA’’), but currently only 3 percent of the energy 

on the island of Puerto Rico comes from clean sources; 

Whereas, between 1974 and 2016, the PREPA made numerous bond issuances pursuant to the Trust Agreement between the Puerto Rico Water Resources Authority and 

First National City Bank dated January 1, 1974, reaching $8,300,000,000 in outstanding bond debt; 

Whereas the PREPA is considered to have the largest debt 

of all public entities in Puerto Rico; 

Whereas the retirement system of the PREPA warned that, 

by April 2023, it would run out of funds to cover the obligations owed to its nearly 12,000 pension holders, and 

has yet to articulate a plan that ensures future monthly 

payments for retirees; 

Whereas, in July 2017, the Financial Oversight and Management Board for Puerto Rico (referred to in this preamble 

as the ‘‘FOMB’’) filed a petition pursuant to title III of 

the Puerto Rico Oversight, Management, and Economic 

Stability Act (48 U.S.C. 2161 et seq.), commencing a 

debt adjustment proceeding for the PREPA; 

Whereas, in 2019, the FOMB negotiated an agreement with 

bondholders that would have resulted in a 10- to 16-perVerDate Sep 11 2014 23:49 Jul 12, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6300 E:\BILLS\SC12.IS SC12

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cent increase over current electric rates for the following 

47 years; 

Whereas that agreement was ultimately rejected in 2022 by 

the local legislature and Governor of Puerto Rico, who 

recognized that the agreement was unaffordable and 

would impose costs that would undermine the recovery 

and future economic growth of Puerto Rico; 

Whereas, on December 16, 2022, the FOMB filed a new restructuring plan for the PREPA that proposes to reduce 

almost 1⁄2 of the debt of the PREPA and impose a ‘‘legacy charge’’ for consumers who do not benefit from subsidized electric rates; 

Whereas that plan was amended on February 9, 2023, advocating for the issuance of $5,700,000,000 in bonds, or 

$13,000,000,000 over 35 years with accrued interest, to 

partially compensate the creditors of the PREPA, including bondholders; 

Whereas the debt service on the new bonds will be paid off 

via the ‘‘legacy charge’’, which includes both fixed monthly charges and charges that depend on the consumption 

of electricity; 

Whereas the estimated ‘‘legacy charge’’ for nonexempt, residential customers would, on average, be around $19 per 

month; 

Whereas the fixed charge would be between $16 and $1,800 

per month for commercial and industrial customers; 

Whereas those charges represent an increase in monthly bills 

for average residents and small businesses of 12 to 13 

percent, on top of rates that are already double the average price for electricity in the continental United States; 


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Whereas, according to estimates by small business representatives in Puerto Rico, once the increases in energy bills 

under the current restructuring plan are enforced, nearly 

12,000 small businesses would be forced to close, a number 3 times higher than in 2020, a year marked by the 

onset of the Coronavirus Disease 2019 (COVID–19) pandemic; 

Whereas, according to the 2017 testimony of Andrew Wolfe, 

an economic expert representing the FOMB, those increases would ‘‘eventually contribute to a downward economic spiral that would result in Puerto Rico returning 

to a path of declining economic activity, which would in 

turn adversely impact the demand for electricity and in 

the end lead to another debt service payments crisis for 

PREPA’’; 

Whereas the FOMB proposes to raise electric rates in Puerto 

Rico in spite of a prior economic analysis of the FOMB 

showing that electric rates in Puerto Rico are 

unsustainable at current levels; 

Whereas, in 2022, Congress passed the Puerto Rico Recovery 

Accuracy in Disclosures Act of 2021 (Public Law 117– 

82; 48 U.S.C. 2178) to impose disclosure requirements 

on all of the advisers and consultants of the FOMB, closing the loophole in the Puerto Rico Oversight, Management, and Economic Stability Act (48 U.S.C. 2101 et 

seq.) that has disadvantaged the people of Puerto Rico 

in the debt restructuring process for the island; 

Whereas, in 2022, the Wall Street Journal reported that 

stakeholders hired to consult on the bankruptcy proceedings for Puerto Rico initially failed to disclose connections to companies involved in the PREPA debt reVerDate Sep 11 2014 23:49 Jul 12, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6300 E:\BILLS\SC12.IS SC12

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structuring deal, raising the potential for conflicts of interest; 

Whereas the latest restructuring plan for the PREPA filed by 

the FOMB does not represent a ‘‘durable solution for 

Puerto Rico’s fiscal and economic crisis [including] permanent, pro-growth fiscal reforms’’, as instructed by 

Congress in title VII of the Puerto Rico Oversight, Management, and Economic Stability Act (48 U.S.C. 2241); 

Whereas, in June 2023, the United States District Court for 

the District of Puerto Rico suspended the proceedings to 

evaluate and confirm that latest restructuring plan; and 

Whereas, on June 23, 2023, the FOMB filed a 2023 Certified Fiscal Plan for the PREPA acknowledging that the 

latest proposed restructuring plan is not sustainable, and 

announced that it would present an amended restructuring plan for the PREPA by July 14, 2023: Now, 

therefore, be it 

1 Resolved by the Senate (the House of Representatives 

2 concurring), That Congress— 

3 (1) recognizes that the debt adjustment pro4 ceeding for the Puerto Rico Electric Power Author5 ity (referred to in this resolution as the ‘‘PREPA’’) 

6 has been and continues to be of great interest to 

7 Puerto Ricans and to Congress; 

8 (2) recognizes that the continuity of 

9 unsustainable electric rates will result in— 

10 (A) accelerated out-migration from the is11 land of Puerto Rico; and 


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1 (B) business closures and unemployment 

2 in Puerto Rico; 

3 (3) recognizes that the continuity of 

4 unsustainable electric rates will further shrink the 

5 demand-base and revenues of the PREPA, increas6 ing pressure on the electrical system to cut labor 

7 and maintenance costs and inhibiting the reconstruc8 tion of the system and the transition to renewable 

9 energy; 

10 (4) urges the Financial Oversight and Manage11 ment Board for Puerto Rico to put forth a restruc12 turing plan for the PREPA that— 

13 (A) is economically viable for the PREPA, 

14 customers of the PREPA, and PREPA retirees; 

15 (B) allows for the rehabilitation of the 

16 electrical system of Puerto Rico; and 

17 (C) does not impose additional increases to 

18 electric rates for residents, business owners, 

19 and users of the electric grid; and 

20 (5) reaffirms the intent of Congress to create 

21 ‘‘durable solution[s] for Puerto Rico’s fiscal and eco22 nomic crisis’’ through the adoption of ‘‘permanent, 

23 pro-growth fiscal reforms’’, as stated in title VII of 


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1 the Puerto Rico Oversight, Management, and Eco2 nomic Stability Act (48 U.S.C. 2241). 

Æ 


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