Board rejects rate increase to help restructure debt of Puerto Rico power company The executive director of a federal control board that oversees Puerto Rico’s finances said that it is “impossible” for the U.S. territory to pay the $8.5 billion bondholders are demanding in a bankruptcy case involving the island's power company.
The board remains in contentious mediation with creditors as it tries to restructure the only outstanding debt that remains since Puerto Rico declared in 2015 that it could not afford to pay its more than $70 billion public debt load and then filed for the biggest U.S. municipal bankruptcy in history two years later.
Mujica noted that officials don’t yet know where they would obtain funding for the $2.6 billion they’re offering, but warned it shouldn’t come from an increase in electric rates given already high power bills and the fragile state of Puerto Rico’s grid.
Luma Energy, which oversees the transmission and distribution of power in Puerto Rico, says the grid needs up to $25 billion in federal funding through fiscal year 2034 to fully rebuild and maintain the system.
Robert Mujica Jr. unveiled a new fiscal plan for Puerto Rico's Electric Power Authority on Tuesday, stating that the government can pay creditors $2.6 billion.
