2023 Laws of Puerto Rico › TITLE TWENTY-TWO - Public Works (§§ 1 — 1104) › Chapter 11 - Puerto Rico Electric Power Authority (§§ 191 — 240) › § 196 - Powers

PREPA shall be responsible for providing reliable electric power, contributing to the general wellbeing and sustainable future of the People of Puerto Rico, maximizing benefits, and minimizing the social, environmental, and economic impact. It shall offer and provide services at the lowest reasonable cost, through just and reasonable rates, consistent with sound fiscal and operational practices that provide for a reliable, adequate, and nondiscriminatory service that is consistent with the protection of the environment, as well as nonprofitable, and focused on citizen participation and its customers.
Its undertakings as a public corporation shall be characterized by efficiency, the promotion of renewable energy use, energy conservation, and efficiency, excellence in customer service, and the conservation and protection of the economic and environmental resources of Puerto Rico. PREPA shall be responsible for acting consistent with the public policy on energy of the Commonwealth of Puerto Rico, the public interest, and for complying with all the applicable rules and regulations of the Energy Commission and CEPPO.
The Authority shall rise to energy and environmental challenges by using scientific and technological advances available; incorporate the best practices in the electric power industries of other jurisdictions; make the connection of renewable energy producers to the electric power grid feasible; carry out any process needed to make the electric power generated in Puerto Rico, whether by PREPA, co-generators, or independent power producers, highly efficient and clean for a better environment and public health. PREPA shall be required to coordinate any necessary efforts with the Commission, CEPPO, and any other entity or person to achieve the purposes of §§ 191—217 of this title and of any statute related to the public policy on energy of Puerto Rico; ensure the wellbeing of consumers by promoting savings and high efficiency standards; adopt internal policies as are necessary to ensure the continuity and reliability of the electrical system; provide high quality customer service; and adopt internal policies to ensure, reduce, and stabilize permanently the costs of electricity.
The remedies available by law to require the Authority’s compliance with the mandates of §§ 191—217 of this title, the wellbeing of Puerto Rico, and the protection of customers shall not be limited in any way. The Authority is hereby granted and shall have and may exercise all rights and powers necessary or convenient to carry out the aforementioned purposes, including (but without limiting the generality of the foregoing) the following:
(a) To have perpetual existence as a corporation.
(b) To adopt, alter, and use a corporate seal, which shall be judicially noticed.
(c) To prescribe, adopt, amend, and repeal bylaws and regulations governing the manner in which its general business may be conducted and the powers and duties granted to and imposed upon it by law may be exercised and performed; as well as, with the intention of guaranteeing the safety of persons or property, to regulate the use and enjoyment of its properties and of such other properties under its administration; the use and consumption of electric power; the tampering with and manipulation of equipment, enterprises, facilities, devices, instruments, wires, meters, transformers, and objects of any other analogous nature owned by the Electric Power Authority and used in connection with the production, transmission, distribution, and use and consumption of the electric power produced by said entity. The regulations so adopted shall have force of law once the provisions of §§ 2101 et seq. of Title 3, known as the “Uniform Administrative Procedures Act of the Government of Puerto Rico”, are complied with.
(d) To have complete control and supervision of any undertaking built or acquired by it, including the power to determine the nature of and the need to incur all expenditures and the manner in which such expenditures shall be incurred, authorized, and defrayed; Provided, That all actions of PREPA’s management and employees and its Governing Board shall be subject to the provisions of the Government Ethics Act, and its highest fiduciary duties with the People of Puerto Rico.
(e) To sue and be sued, implead and be impleaded, complain and defend, in all courts.
(f) To make contracts and to execute all instruments necessary or convenient in the exercise of any of its powers.
(g) To prepare, or cause to be prepared, plans, designs, and estimates of costs for the construction, reconstruction, extension, improvement, enlargement, or repair of any undertaking or any part or parts thereof, and from time to time to modify such plans, designs, and estimates.
(h) To acquire in any lawful manner including, but without limitation, acquisition by purchase, whether by agreement or by the exercise of the power of eminent domain, lease, bequest, devise, gift, and to hold, maintain, use and operate any undertaking or parts thereof.
(i) To acquire in the manner set forth in subsection (h) hereof, produce, impound, develop, manufacture, treat, hold, conserve, use, transmit, distribute, supply, exchange, sell, rent and otherwise dispose of, water, electric energy, equipment, and such other things, supplies and services as the Authority shall deem necessary, proper, incidental, or convenient in connection with its activities; Provided, That in disposing at wholesale of electric energy the Authority shall give preference and priority as to supply to public bodies and cooperatives.
(j) To acquire in the manner set forth in subsection (h) hereof and to hold and use any property, real, personal, or mixed, tangible or intangible, or any interest therein, deemed by it to be necessary or convenient for carrying out the purposes of the Authority, and (subject to the limitations contained in §§ 191—217 of this title) to lease as lessor, or exchange, any property or interest therein at any time acquired by it.
(k) To construct or reconstruct any undertaking or any part or parts thereof, and any additions, improvements, and extensions to any undertaking of the Authority by contract or contracts, or under, through, or by means of its own officers, agents, and employees.
(l) To determine, fix, alter, charge, and collect reasonable and just rates, fees, rents, and other charges subject to the Commission’s approval, for the use of the facilities of the Authority, or for electric power services, or other commodities sold, leased, or provided by the Authority, that are sufficient to cover reasonable expenses incurred by the Authority in the development, improvement, extension, repair, conservation, and operation of its facilities and properties, and for the payment of the principal of and interest on its bonds, and for fulfilling the terms and provisions of such agreements entered into with or for the benefit of purchasers or holders of any bonds of the Authority and other creditors.
When charges contained in a bill include three (3) or more past due invoices for services that, due to error or omission of the Authority, were not previously billed, the Authority shall offer a reasonable payment plan to the customer according to his/her financial capacity. Such payment plan may be extended for up to twenty four (24) months.
The Authority shall have a maximum term of one hundred twenty (120) days from the date of issue of the electricity bill to notify customers of errors in calculation. Once said term elapses, the Authority may not claim retroactive charges for said calculation errors, such as those of an administrative or operational nature, or for an erroneous reading of electric power service consumption meters. This shall only apply to residential customers; it shall not apply to commercial, industrial, or institutional customers, or any other kind of customer, or to periodic charges or adjustments included in the rate approved by the Commission or the Transition Charges of the securitization structure. In those cases where customers keep the meters out of the readers’ visual reach, or in an event of force majeure, such as hurricanes, among others, which prevent the reading of meters, this measure shall not apply to electricity bills issued based on consumption estimates. Likewise, it is hereby prohibited to report delinquent accounts of residential customers to credit bureaus as a collection or payment demand, except in the case of undisputed accounts from customers whose balance and recurrence of nonpayment, after more than two demands for payment have been made, and after all the collection mechanisms usually employed by any business when their customers fail to pay for services have been exhausted, show their intent not to meet their payment obligations with the Authority or otherwise imply their intent to defraud the Authority.
Every bill sent by the Authority to its customers shall advise them of their right to dispute a bill (except for the Transition Charges of the securitization structure) and request the Authority to conduct an investigation. The Authority shall provide, on its website and at every regional and commercial office, information about the procedure, terms, and requirements to dispute a bill and request the Authority to conduct an investigation, and subsequently resort to the Commission to request review of the Authority’s decision. Likewise, on its website and at every regional and commercial office, the Authority shall provide information about the procedure, terms, and requirements to request the Commission to review any of the Authority’s decisions regarding customer bills.
(ll) Every time an electric power service interruption is programmed by PREPA within at least fifteen (15) days in advance, in one or more areas, it shall notify the public of such service interruption within at least forty-eight (48) hours in advance for those customers who will be affected. PREPA shall publish such notification on its website, the social media, and any other communications media.
(m) To provide free access to PREPA’s website to all of its customers, so that they may obtain information related to their bill, such as the reading of the meter at the beginning and at the end of the billing cycle, dates and number of days in the billing cycle, and meter constant, the rates, the date of the next reading, as well as any other information that enables the verification of the reading, and to pay bills, examine the consumption history and the usage pattern. PREPA shall make available to its customers information of the electric power infrastructure, including information regarding generators and co-generators, so that customers may be able to evaluate the status of the electric power infrastructure and PREPA as public instrumentality. PREPA documents and information shall be made available to those customers who so request, except for (1) confidential information in accordance with the Rules of Evidence; (2) information related to collective bargaining, labor-related disputes, or issues related to personnel such as appointments, evaluation, disciplinary actions, and dismissal; (3) ideas with regard to the negotiation of potential PREPA contracts or a determination to rescind or terminate contracts in effect; (4) information of strategies regarding lawsuits of PREPA; (5) information of internal investigations of PREPA while these are being conducted; (6) aspects regarding the intellectual property of third parties; (7) trade secrets of third parties; (8) issues that PREPA should keep confidential in accordance with any confidentiality agreement; or (9) matters of public security involving threats against PREPA, its property or employees. PREPA shall disclose and provide the people with access to the Trust Agreement, with all its amendments as well as the annual reports of consulting engineers.
Likewise, PREPA shall provide continuous access to and make available to customers any public information of PREPA. In compliance with this duty, in addition to the original copy of the documents where such information appears, PREPA shall publish and make available to customers documents that organize and provide such information in a manner that facilitates the handling thereof by persons without expertise in the disciplines addressed therein may understand them. PREPA’s public information shall include, but not be limited to, its monthly financial report, including data per sector, the price per type of fuel and the average, the cost per kilowatt-hour of each sector (residential, industrial, and commercial) during the three (3) preceding months, the production cost per kilowatt-hour, PREPA’s operating expenses of the last month, and the generation distribution per type of technology and fuel. The monthly financial reports shall be published on PREPA’s website in accordance with the provisions of this section on or before thirty (30) days after the month included in the report concludes. All the public information of PREPA shall be available in Spanish and English.
PREPA shall also publish and explain on its website an itemization of the charges included in the bill and the legal basis for each one of them. In addition to other means of communication, PREPA shall use the social media and electricity bills to notify the availability of information and the means to obtain access thereto.
PREPA shall provide citizen participation mechanisms at each one of its regions, and establish a continuing education program for its employees and customers to promote energy conservation and efficiency, subject to the rules established by the Commission. To such purposes, PREPA may enter into collaboration agreements with other public entities, civic entities, and non-governmental organizations, and other institutions interested in facilitating the coordination and reducing the costs of the continuing education programs and the mechanisms to allow and promote citizen participation. The Executive Director shall adopt standards, rules or regulations as are necessary to achieve the purposes set forth in this subsection and to guarantee the confidentiality of the accounts of every natural or juridical person.
Likewise, PREPA shall provide free access to a separate website for the Energy Control Center, where daily statistical and numerical information shall be provided to constantly inform the citizenry about energy-related issues, including, but not limited to the daily peak demand, the daily supply per power plant or facility, and any other information or data that the Commission may deem necessary, in connection with the management of the electric power grid and the operations of electric power transmission and distribution in Puerto Rico.
(n) To appoint executive officers and those officials, agents, and employees and vest them with such powers and duties, and to fix, change, and pay such compensation for their services as the Authority may determine.
(o) To borrow money, make and issue bonds of the Authority for any of its corporate purposes, and to secure payment of its bonds and of any and all other obligations by pledging or placing a lien on all or any of its contracts, revenues, and income only; provided, however, that the Authority may place liens on real or personal property as necessary to comply with federal regulations that allow for the financing or guarantees of the United States Government through any of the agencies thereof to be able to participate in federal programs. No lien whatsoever may be placed on the assets of the Authority insofar as the Trust Agreement with the bondholders or other agreements with the creditors of the Authority do not allow. Except for the bonds and other financing instruments related to the Authority’s restructuring pursuant to the agreements entered into with the creditors of the Authority, whose debt parameters shall be governed by the provisions of Chapter IV of the Electric Power Authority Revitalization Act and the Creditors’ Agreement, before borrowing any money or issuing bonds for any of its corporate purposes, the Authority shall require the Commission’s approval showing that the proposed financing shall be used to fund projects and defray the costs associated therewith in accordance with the Integrated Resource Plan and the Energy RELIEF Plan.
(p) To make and issue bonds for the purpose of funding, refunding, purchasing, paying, or discharging any of the outstanding bonds or obligations issued or assumed by it or any bonds or obligations the principal or interest of which is payable in whole or in part from its revenues.
(q) To accept grants from, and enter into contracts, leases, agreements, or other transactions with, any federal agency, the Commonwealth of Puerto Rico, or political subdivisions of the Commonwealth of Puerto Rico, and to expend the proceeds of any such grants for any corporate purposes.
(r) To sell, or otherwise dispose of, any property of any kind, real, personal, or mixed, or any interest therein, that in the judgment of the Board is no longer necessary for carrying on the business of the Authority or for effectuating the purposes of §§ 191—217 of this title.
(s) To enter into any lands, bodies of water, or property, to make surveys, soundings, and studies to effectively carry out its duties under §§ 191—217 of this title, without other alternatives, upon written notice with at least five (5) days in advance to the owners or holders as provided in §§ 191—217 of this title. Such entrance shall be made at a time most convenient to the owner or holder of the premises in question, and must be made within the shortest time possible so that the use and enjoyment thereof by its owner or holder is not unduly affected;
(t) To assign and transfer surplus personal property, free of charge, to other government entities or municipalities, subject to compliance with any conditions established in the applicable rules and regulations.
(u) To take actions or measures necessary or convenient to exercise the powers granted to it under §§ 191—217 of this title or by any other act of the Legislative Assembly of Puerto Rico, or of the Congress of the United States. PREPA may establish business models to ensure that the electricity infrastructure of Puerto Rico is supported by sufficient capital to maintain the reliability and safety of the electric power service in the Island and a better quality of electric power service to its customers. Such model may also include seeking new electricity markets in nearby jurisdictions. Provided, however, That PREPA shall have no power at any time or in any manner to pledge the credit or taxing power of the Commonwealth of Puerto Rico or any of its political subdivisions, nor shall the Commonwealth of Puerto Rico or any of its political subdivisions be liable for the payment of the principal of or interest on any bonds issued by PREPA, or of the interests of same.
(v) To create, whether in the Commonwealth of Puerto Rico or any other jurisdiction, or enter into contracts with companies, partnerships or subsidiary corporations, for profit or nonprofit, affiliated to or associated with, for purposes, among others, of developing, financing, building, and operating industrial projects and other infrastructure directly related to the maximization of the PREPA’s electricity infrastructure (to have a stable electrical system with the latest technology, clean, reliable, and highly efficient), and acquiring, holding, and disposing of securities and shares, contracts, bonds, or other interests in other companies, entities or corporations, and exercising any and all powers and rights that such interest allows, provided that, in the Board’s judgment, such action is necessary, appropriate or convenient to attain PREPA’s purposes or to exercise its powers, and to sell, lease, assign, or otherwise convey any property of PREPA or to delegate or transfer any of its rights, powers, functions, or duties, to any such companies, entities or corporations that are subject to its total or partial control, except the right of eminent domain. The foregoing shall be carried out without impairing the functions that other public corporations and/or government agencies of the Commonwealth of Puerto Rico currently have.
(w) Not later than May 31st of each year, the Executive Director of PREPA shall submit a report to the Governor, the Commission, and both Houses of the Legislative Assembly of the Commonwealth of Puerto Rico, stating the measures taken by PREPA during the preceding calendar year to address the emergencies that may arise with respect to the upcoming hurricane season and other atmospheric disturbances, including floods that may affect the electrical system of the Island. Likewise, said report shall present the adopted plans or protocols to be followed in case of fires in facilities or establishments of PREPA. It shall also include any preventive measure identified for the conservation of the power lines in the event of an earthquake. The report shall include, but not be limited to, the following information:
(1) Improvements to PREPA’s Revised Operating Plan for Emergencies due to Atmospheric Disturbances;
(2) development of an emergency plan to face a possible earthquake, from which the Island is not free;
(3) adopted plans or protocols to be followed in case of fire in PREPA’s facilities or establishments;
(4) status of the tree trimming program in order to protect power transmission lines. PREPA shall work on said program in conjunction with the Department of Natural and Environmental Resources in order to protect our trees and prevent them from being damaged;
(5) decision-making protocol and process to enforce the shutting down of the electrical system;
(6) trainings offered to PREPA’s essential personnel to qualify it on the procedure to be followed in case of emergencies arising from atmospheric disturbances, fire in facilities or establishments of PREPA, or earthquakes, as well as a certification attesting that all the personnel conducting supervisory functions in the operating areas has been duly advised on the norms of the operating emergency plan in effect; and
(7) contingency plans to address the situation after a storm, hurricane, fire in the facilities or establishment of PREPA, or an earthquake directed to normalizing or reestablishing the electrical system as soon as possible, keeping in mind and giving priority to hospitals, elderly homes, and schools, as well as to non-profit agencies and corporations that provide services to the needy of the Island.
(x) The Executive Director or the official to whom he/she delegates shall be empowered to issue administrative fines to any natural or juridical person that:
(1) Violates the provisions of §§ 191—217 of this title or the regulations adopted thereunder by PREPA, or violates the permits, licenses or authorizations issued by PREPA. Administrative fines in connection therewith shall not exceed ten thousand dollars ($10,000) for each violation; Provided, that for each day the violation continues, it shall be considered a separate violation. If the noncompliance with the provisions of §§ 191—217 of this title and/or the regulations adopted thereunder by PREPA involves the misuse of electric power or materials or equipment as defined by PREPA through regulations, the administrative fine may amount up to fifty thousand dollars ($50,000) for each violation. If the economic benefit derived from such misuse exceeds fifty thousand dollars ($50,000) the administrative fine may amount up to one hundred thousand dollars ($100,000) for each violation; Provided, That in both cases, each day the violation continues it shall be considered a separate violation.
(2) Fails to comply with any resolution, order, or decision issued by PREPA. Administrative fines in connection therewith shall not exceed ten thousand dollars ($10,000) for each violation; Provided, That for each day the violation continues, it shall be considered a separate violation.
(3) Alters, in whole or in part, the electrical system or facility to such extent that the actual consumption cannot be measured properly and/or makes an installation designed to prevent the correct measuring of energy consumption. Administrative fines in connection therewith shall not exceed fifty thousand dollars ($50,000).
PREPA shall establish, by regulations, the standards and procedures to impose the administrative fines established in this subsection. The fine to be imposed shall be based on: the severity of the violation, the length of time over which the violation occurred, repetition of the violation, the economic benefit derived from said violation, and the misuse of electric power or materials or equipment, and the risk entailed or damages caused to health and/or safety as a result of such violation.
The administrative penalties assessed based on the misuse or alteration of the electrical system to prevent the correct measuring of energy consumption shall be covered into PREPA’s Theft and Misuse Division for its exclusive use. PREPA shall maintain a stringent energy theft and misuse program and publish on its website quarterly reports on the efforts made and the results of such program. PREPA shall file an annual report with the Legislative Assembly, the Governor, and the Commission stating in detail the fines assessed under the provisions of §§ 191—217 of this title and the use given thereto.
(y) When PREPA has evidence that the person who tampered with the meter or the electric system and/or has made an illegal installation is an expert electrician or an engineer, as provided in subsection (x) of this section, the Executive Director or the official whom he/she designates shall immediately refer such evidence and/or documentation to the corresponding governing bodies in order for them to impose the appropriate disciplinary measures as set forth in their respective regulations and in §§ 191—217 of this title.
(z) The Executive Director or the official designated by him/her shall adopt regulations for the collection of past-due debts and the establishment of payment plans, which shall be established within ninety (90) days after the approval of this act, with reasonable and feasible terms for the agencies, instrumentalities, and public corporations. The regulations shall also consider the suspension of the electric power service to the agency, instrumentality or public corporation in default in the case of noncompliance with the payment plan or any undisputed bill outstanding for over sixty (60) days, except in Essential Public Service Facilities for citizens. In the case of debts of municipalities due to consumption, the computation, billing, collection, payment plans, and service suspension shall be governed by the provisions of § 212 of this title and the regulations adopted by the Energy Commission on the contribution in lieu of tax and the excess consumption of said contribution.
(aa) The Executive Director shall evaluate the convenience of adopting a program whereby customers may pay a fixed amount in advance, and that such amount be credited to the customer’s monthly bill, granting a discount, to be determined by the Board on the total amount of each pre-paid bill until the funds paid in advance are exhausted. The Executive Director shall also assess the convenience of applying said program to the agencies, public corporations, boards, or any other instrumentality or entity of the Commonwealth of Puerto Rico, so that the budget set aside to defray the electric power costs of said entities shall be remitted to PREPA at the beginning of the fiscal year, and the monthly bill of such entities shall be credited on such basis, granting a discount established for payments made in advance.
(bb) Develop and maintain an integrated resource plan in accordance with the parameters and requirements established by the Commission as provided in § 196c of this title.
(cc) Formulate, adopt, amend, and repeal rules and regulations as necessary or convenient to exercise and carry out its powers and duties.
(dd) Conduct competitive request for proposals processes or execute Public-Private Partnership agreements, in accordance with §§ 191--217 of this title, to develop, finance, build, operate, and provide maintenance, in whole or in part, to the electric power grid and the power plants and other facilities and infrastructure thereof, as well as to promote new generation, transmission, distribution, customer service optimization projects and any other necessary project consistent with the Integrated Resource Plan.
(ee) Any sum owed by the Authority to any agency, instrumentality, or public corporation of the Government of the Commonwealth of Puerto Rico may be credited to any outstanding debt of such agency, instrumentality, or public corporation with the Authority; provided, that such credit does not violate the Trust Agreement with the bondholders.
(ff) Conduct investigations and credit verifications on every new customer who wishes to open an account with the Authority. The Authority may not deny service to a customer for having bad credit, insofar as such customer or entity controlled by said customer does not have an outstanding debt with the Authority under other contracts; however, the Authority may require a deposit or special bond for service requests. The Authority shall approve regulations to establish the guidelines to post bonds or deposits that shall apply accordingly to each class of customer, whether residential, commercial, or industrial. The bond or deposit required to a customer shall not exceed twice the amount of the bond or deposit that would be required to the same customer if he/she would not had bad credit.
(gg) As a temporary mechanism to facilitate the development and financing of new sustainable renewable energy power stations, as such term is defined in §§ 8121 et seq. of Title 12, the Authority may establish one or more individual and restricted accounts in financial institutions of Puerto Rico, where the Authority shall deposit an amount equal to the cost of energy that each newly-built power plant is estimated to deliver, one month in advance, in accordance with the financial terms of the agreement executed for such purposes. The obligation of the Authority to deposit such funds shall begin once the sustainable renewable energy power station is interconnected with the Authority’s power grid. Funds shall be controlled exclusively by the financial institution where they are deposited and the Authority shall have no right to withdraw any portion thereof, except as specified below. Any entity that enters into a contract with the Authority to supply electricity from a sustainable renewable energy power station may offer that portion of the funds thus deposited corresponding to the payment of the electricity delivered by the same as a security or collateral for its obligations, including the creation of a lien thereon. The Authority shall authorize the disbursement to the entity with which it entered into contract or to the third party designated by the same, in accordance with the terms of the contract executed for such purposes. Any balance in the restricted account twelve (12) months after it was opened, and on every anniversary thereof, shall be refunded to the Authority. This temporary mechanism shall be discontinued once most credit rating agencies have awarded the Authority investment-grade rating.
History —May 2, 1941, No. 83, p. 684, § 6; Apr. 8, 1942, No. 19, p. 330, § 1; June 28, 1969, No. 112, p. 318; Dec. 8, 2002, No. 272, § 1; Aug. 18, 2003, No. 189, § 1; Sept. 16, 2004, No. 370, §§ 1, 2; Oct. 4, 2006, No. 223, § 1; July 30, 2007, No. 86, § 1; Sept. 27, 2007, No. 131, § 1; Oct. 1, 2007, No. 138, § 1; Dec. 7, 2009, No. 162, § 1; Dec. 11, 2011, No. 238, § 1; May 27, 2014, No. 57, § 2.6; Feb. 16, 2016, No. 4, § 8.