2023 Laws of Puerto Rico › TITLE TWENTY-TWO - Public Works (§§ 1 — 1104) › Chapter 28 - Puerto Rico Energy Transformation and RELIEF Act (§§ 1051 — 1056) › Subchapter IV - Creation, Structure, Operation, Budget, and General Powers of the Puerto Rico Energy Administration and the Energy Commission (§§ 1054 — 1054rr) › § 1054x - Review of electricity rates

(a) In general.— The Commission shall be in charge of following the process established herein to review and approve the Authority’s proposed rate reviews for energy use and consumption and the use of the electric power grid. The Commission shall ensure that all rates are just and reasonable and consistent with sound fiscal and operational practices that provide for a reliable and adequate service at the lowest reasonable cost. The regulations of the Energy Commission for the rate review process shall comply with such principles.
(b) Rate review process.— In the case of the Authority, the rates in effect as of the approval of the Energy Transformation and RELIEF Act shall continue in effect until the same are reviewed by the Energy Commission in accordance with the provisions of this chapter and the Energy Transformation and RELIEF Act.
The first rate review process shall begin no later than one hundred eighty (180) days after the date on which the Commission determines through resolution that the request of the Authority is complete. The provisions of this section that, due to their nature, only apply to the Authority shall not apply to rate review requests submitted by certified companies. During any rate review process, the burden of proof shall lie on the Authority or the requesting certified company to show that such rate is just and reasonable, consistent with sound fiscal and operational practices that provide for an adequate service at the lowest reasonable cost. The Authority or the requesting certified company shall submit all the information requested by the Commission including, as applicable, but not limited to evidence and documents related to:
(1) The efficiency, capacity, and suitability of the facilities and service;
(2) direct and indirect costs related to the generation, transmission and distribution of energy, including stranded costs and costs attributable to the loss of energy due to theft or inefficiency;
(3) the expenditures related to the Authority’s debt repayment, itemizing separately the cost of bonds and other obligations that shall be part of the securitization provided in Chapter IV of the Electric Power Authority Revitalization Act;
(4) all charges and costs included under the “Fuel Adjustment” as of the effective date of this Energy Transformation and RELIEF Act;
(5) the Authority’s capacity to improve the service provided and its facilities;
(6) the conservation of energy and the efficient use of alternative energy resources;
(7) data related to the effect of special laws, subsidies, and contributions; and
(8) any other data or information that the Commission deems to be necessary to evaluate and approve rates.
(9) Citizen participation in the rate review process before the Authority.
The approved rate shall be itemized according to the terms of the new transparent bill provided in §§ 196a—196c of this title. The Commission shall approve a rate that: (i) is sufficient to guarantee payment of principal, interest, reserves, and all other requirements of bonds and other financial obligations that have not been defeased as part of the securitization provided in Chapter IV of the Electric Power Authority Revitalization Act, and reasonable costs of providing the services of the Authority; (ii) complies with the terms and provisions of the agreements entered into with or in benefit of buyers or holders of any bonds or other financial obligations of the Authority; (iii) covers the costs of the contribution in lieu of taxes and other contributions and subsidies required to the Authority under special laws; (iv) remains in effect during three (3)-year cycles at least, except for periodic adjustments authorized by the Commission as part of the rate approved, and unless the Commission motu proprio decides to conduct a review; (v) takes into consideration the operational and administrative efficiencies and savings provided in the Creditors” Agreement as reasonably estimated in good faith by the Authority and determined as of the filing date of the proposal with the Commission. As part of every rate proposal, the Authority may propose one or more itemized charges included in the energy rate so that all customers may clearly recognize the charges that they shall be paying on account of the Authority’s obligations to bondholders. These charges may be reviewed according to the amount of the financial obligations of the Authority so that they may be sufficient to guarantee the annual payment of the debts contracted with bondholders and other creditors of the Authority. In addition, the Authority shall establish separately the charge corresponding to the cost of subsidies and the contribution in lieu of taxes and those other charges that, when itemized separately, allow for greater transparency in the bill, as provided in §§ 191—217 of this title.
The Commission shall approve under the fuel adjustment and energy purchase adjustment charges only the portion of the costs directly related to fluctuations due to changes in the price of fuel and the purchase of energy, respectively, or that variable portion of the fuel and energy price that is not included in the base rate, as the case may be. No other expense or charge may be denominated nor included under the fuel adjustment or energy purchase adjustment clause.
The Commission shall issue an order establishing the Authority’s rate in the format of the new transparent bill established in §§ 196a—196c of this title. Every rate modification request approved by the Commission shall comply with subsection (c) of said section.
During the rate review process and every three (3) years after the first rate review process, or more frequently, if the Commission deems it necessary, the Commission shall establish a mitigation plan to ensure that the costs it deems to be inconsistent with the industry practices, such as energy theft, account receivables, and losses attributable to the inefficiency of the electrical system are adjusted to the industry’s standards. The Authority shall comply with the mitigation plan within a term that shall not exceed three (3) years, to be determined by the Commission. The Commission shall periodically review the Authority’s compliance with the mitigation plan and publish the progress of the mitigation plan on the Commission’s website.
(c) Rate modification.— Every rate modification request previously approved by the Commission shall be filed with the Commission. The request shall state the grounds for the modification, the effect of such modification on the revenues and expenditures of the Authority or requesting certified company, and any other information requested by the Commission through regulations or request. The Commission may initiate, motu proprio, or at the request of the Independent Consumer Protection Office or any other interested party, the rate review process when it is in the best interest of customers. Any modification to a rate proposed the Authority or a certified electric power company, whether to increase or decrease the same, shall undergo an evidentiary and a public hearing process to be held by the Commission to determine whether the proposed change is just and reasonable and consistent with sound fiscal and operational practices that provide for a reliable and adequate service, at the lowest reasonable cost. The Commission shall provide an opportunity to allow the participation of ICPO, CEPPO, the citizens, and interested parties in the process. The review and the order issuance processes shall not exceed one hundred eighty (180) days from the Commission’s determination by resolution that the Authority’s request is complete; provided, however, that the Commission may extend the review process for an additional term that shall not exceed sixty (60) days. At the Authority’s request, the Commission may approve a rate modification due to emergency circumstances, as provided in §§ 261—261e of this title. These emergency rates shall not be considered temporary rates as provided in §§ 196a—196c of this title, or in § 1054xof this title, and shall remain in effect while the emergency lasts, up to a maximum term of one hundred eighty (180) days after the adoption thereof.
(d) Temporary rate.— Within thirty (30) days after the filing of the rate modification request, the Commission may make, motu proprio, or at the request of the Authority or requesting certified company, a preliminary evaluation to determine whether a temporary rate should be established. The Commission shall exercise its discretion in establishing the temporary rate, unless the Authority or requesting certified company contests the establishment of the temporary rate or the amount thereof, in which case the Commission shall decide whether it shall revise the amount of the temporary rate or desist from establishing the same. If the Commission establishes a temporary rate, such rate shall take effect sixty (60) days after the date of approval of the temporary rate, unless the Commission determines, at the request of the Authority, that the temporary rate should take effect earlier, but never within less than thirty (30) days after the approval of the temporary rate. Said temporary rate shall remain in effect during the period of time needed by the Commission to evaluate the rate modification request proposed by the Authority or requesting certified company and up to the date on which the new bill is implemented, which shall not exceed sixty (60) days after the approval thereof.
(e) Rate modification approval.— If after the public hearing process the Commission determines that the proposed change is just and reasonable, it shall issue an order to such purposes and notify the change on its website, along with the new rate and an itemization of the rate structure. The newly approved rate shall take effect sixty (60) days after the effective date of the order. The Commission may extend or reduce such term at the request of the Authority or requesting certified company. If the Commission determines that the proposed rate change is unjust or unreasonable, it shall issue a duly grounded order stating so. In such case, the rate modification object of the request shall not proceed and the rate whose modification was sought shall continue in effect. Upon issuing a final order after the rate review process, the Commission shall direct the Authority to adjust customers” bills so as to credit or charge any discrepancy between the temporary rate established by the Commission and the rate approved by the Commission.
(f) Inaction of the Commission.— If the Commission fails to act on a rate review request within thirty (30) days after the filing thereof, the modified rate object of the request shall take effect immediately as a temporary rate, unless the Authority requests that a temporary rate should not be established due to the reasons stated in its request. The Commission shall continue the review process and shall issue the corresponding order within the term specified in this section. If the Commission fails to approve or reject within the term of one hundred eighty (180) days after the date on which the Commission notifies its determination by resolution that the request of the Authority is complete, the rate proposed by the Authority or the requesting certified company shall become final.
(g) The Commission shall publish on its website an itemization of all rates or changes approved or modified.
History —May 27, 2014, No. 57, § 6.25; Feb. 16, 2016, No. 4, § 18.