- Senate will consider House amendments to the legislation
- Power provider is seeking to reduce $9 billion of debt
Puerto Rico’s House of Representatives approved legislation to allow the island’s main electric utility to restructure almost $9 billion of debt.
The lower chamber passed the bill in a 26 to 22 vote Monday following the Senate’s approval Feb. 10, according to Michelle Gonzalez, spokeswoman for House Speaker Jaime Perello. The measure now heads back to the Senate because House members amended the legislation. A special joint commission worked on the bill to create one measure for both chambers. A debt-reduction agreement between the Puerto Rico Electric Power Authority and its creditors expires Tuesday unless lawmakers pass the legislation.
The bill would allow the utility, known as Prepa, to cut its obligations in a debt exchange where bondholders accept a 15 percent loss on their securities. Savings on principal and interest payments would enable the agency to rehabilitate facilities to burn more natural gas and decrease its reliance on crude oil to produce electricity.
“This act will facilitate key aspects of Prepa’s comprehensive transformation, including our financial restructuring and attracting investment for modernizing Prepa’s operations,” Javier Quintana Méndez, executive director of Prepa, said in a statement.
Without a restructuring, Prepa is unable to pay creditor bills due July 1, Lisa Donahue, the utility’s chief restructuring officer, told a U.S. House Natural Resources Committee last month.