PREPA

EL RSA DE LA AEE, EL IMPUESTO AL SOL Y LA LEGISLATURA

Los bonistas de la AEE le solicitaron a la Juez Swain que se le ordene a la Junta la radicación del plan de ajuste consistente con el Restructuring Support Agreement (RSA) en o antes del 15 de abril de 2022. Solicitan además, que se ordené mediación para tener un plan B para aprobar el mismo si la legislatura no quiere aprobar la legislación habilitadora. Mencionan que la economía de PR ha mejorado y por ende las condiciones de la AEE mejoraron.

El president de la Cámara se opuso a ello, diciendo que no pueden obviar la Legislatura y la prensa anunció report que el Presidente de misma quiere modificaciones al RSA para que sea menos oneroso a los consumidores. El Presidente del Senado dijo iba a contestar la moción de los bonistas pero no lo hizo.

La Junta se opuso a la petición de los bonistas. Menciona que la economía ha mejorado pero no la AEE, extraño pero eso es lo que dicen. La moción también da a entender que tal vez se tenga que negociar nuevamente el RSA si los consumidores pierden en este momento ventajas y continuar la litgación de ciertos bonos. Este párrafo resume la posición de la Junta:

As discussed above, if legislation is not forthcoming, the value of the RSA to PREPA will be significantly reduced, and the Oversight Board will have to consider other options to restructure PREPA while achieving the mandates of PROMESA. In any mediation, the Oversight Board should have full flexibility to negotiate with all its stakeholders on a plan of adjustment for PREPA. (Enfasis suplido)

Notarán que menciona lo que la Junta hará sin mencionar a los bonistas ni la Legislatura. Los bonistas tienen hasta el lunes para hacer una replica.

Durante la reunion de la Junta del viernes, sin embargo, tres miembros de la Junta reanudaron su apoyo al RSA y negaron que hubiera un impuesto al sol. El gobernadora si entiende que lo hay e indicó que debe mejorarse. El president de una asociación de energía renovable se expresó en contra de cualquier cargo que grave el hecho que un consumidor venda la energía que genera a la aee. ¿Quien tiene la razón? Veamos. El RSA, página 97 del PDF, I-A-1 define “Customer” como:

. . . a service location or premise that (a) is connected to the System, (b) uses or leases any part of the System, (c) is connected to a microgrid, municipal utility or electric cooperative that is connected to or uses the System, or (d) benefits from any agreement that requires the System to provide the Customer electricity under any condition, including without limitation, an obligation to provide power on a standby, maintenance, emergency, or similar basis. (Enfasis suplido)

La nota al case 18 de la misma página y la siguiente dice:

For the avoidance of doubt, consistent with utility industry standards, the term “Customer” refers to a service location or premises, and not to an actual person. Furthermore, a Customer shall not include any permanently disconnected service location or premise that does not benefit from any agreement that requires the System to provide the Customer with electricity under any condition, including without limitation, an obligation to provide power on a standby, maintenance, emergency, or similar basis. For the purposes of this definition, “permanently disconnected” means any service location or premises, including one connected to a microgrid, municipal utility or electric cooperative, not capable of receiving any electricity from, delivering electricity to, or being synchronized with, the System, including, but not limited to, for standby, maintenance, emergency, or similar purposes, or providing electricity to the System. With respect to a microgrid, “permanently disconnected” means a microgrid, municipal utility or electric cooperative permanently operating solely in island-mode and without any agreement that requires the System to provide the microgrid, municipal utility or electric cooperative electricity under any condition, including without limitation, an obligation to provide power on a standby, maintenance, emergency, or similar basis. Notwithstanding the foregoing, a microgrid, municipal utility or electric cooperative permanently operating solely in island-mode shall not be considered “permanently disconnected” if it uses or leases any part of the System. (Enfasis suplido)

A la página 98 del PDF, I-A-2, se define “Consumption” como”:

“Consumption” means, for any given time period, the amount of electricity consumed by a Customer, regardless of the source of such electricity, including thermal, solar, wind, geothermal or other renewable or recyclable sources, whether owned by PREPA or any successor, lessor or concessionaire, an independent power producer, municipality, cooperative or a Customer. (Enfasis suplido)

Claramente esto no es un impuesto al sol. Por el otro lado, el RSA le hace posible a la AEE facturar a aquellos que generan su propia energía por la misma, siempre y cuando estén conectados al Sistema de la AEE. En otras palabras, la AEE te va a cobrar a los que generan su propia energía por consumer la misma.

¿Que quiere decir todo esto? El plan de ajuste y por ende la quiebra de la AEE esta en “flux”. Nadie sabe que va a hacer la Juez Swain. ¿Habrá mediación para llegar a un plan b sin la Legislatura o habrá mediación sobre cambiar el RSA? Yo me incline a pensar que la Juez Swain va a ordenar mediación sobre todas las cosas, pero por un período bien corto, ordenándole a la Juez Houser a que le informa en X número de días si se puede lograr un acuerdo.

Si se logra un acuerdo rápido, todo bien. Pero, ¿y si no? Los bonistas puede solicitar la desestimación del Título III bajo la sección 930 de Quiebras. Podrían además, pedir el levantamiento del stay para que otro juez decida sobre el nombramiento de un “receiver” que podría tener el poder de aumentar la tarifa. Digo podría porque ese poder se transfirió al Negociado de Energía, PERO como estaba bajo la ley vieja y el acuerdo de 1974, el argumento sería que esta transferencia es un menoscabo de las obligaciones contractuales. En otras palabras, más litigación, costos e incertidumbre sobre la AEE. Mi recomendación es que todos los “stakeholders” en este asunto busquen abogado conocedor de PROMESA y Quiebras. Esto puede ser para largol.

THE TREASURY, PREPA AND CREDIT UNIONS

 

 

In its response to Senator Orrin Hatch’s letter, which I discussed here, the US Treasury included confidentiality agreements it had with PREPA and COSSEC, the PR agency that acts like the FDIC of credit unions, called “cooperativas” in PR.

 

What is interesting is that ENDI reported that PREPA did not know of these arrangements. Why did the Treasury execute these agreements? According to the PREPA confidentiality agreement:

 

the Parties desire to engage in discussions in connection with the Recipients [the Treasury] of the Company’s [PREPA] financial condition and strategic alternatives relating to the Company’s operation and indebtedness (the Evaluation) . . .” Clearly this means that the US Treasury wanted information in order to evaluate its actual condition. The question is why?

 

The Treasury also executed a confidentiality agreement with COSSEC. The agreement’s states that:

 

This the information concerns the business conditions in the Commonwealth and the financial condition of COSSEC and cooperativas. . . We understand the Treasury will use this Non-public Information in connection with monitoring developments in the Commonwealth of Puerto Rico . . . COSSEC understands and consents to Treasury’s use of Non-public Information in analytical documents, such as documents projecting financial conditions in the Commonwealth. COSSEC understands and agrees that Treasury may also provide such Treasury documents and Non-public to other federal entities as part of the federal government’s efforts to monitor financial developments in the Commonwealth.

 

Again, the question is why? The obvious answer is that Treasury needed this confidential information to determine what it was going to do in PR, what decisions it was going to force on Governor García Padilla and the PR Government. We must remember that Jim Millstein was a Treasury official during President Obama’s first administration and unbeknown to most, is intimately related to PREPA’s restructuring efforts. Again, Mr. Millstein is the person in charge not only of PREPA’s restructuring, but also of PR’s debt in general. It does not take a genius to know that Treasury is calling the shots in PR.

The $869 Million Millstein Question

 

Screen Shot 2016-04-10 at 10.31.08 PM

In one of my previous blog post, I discussed that PREPA had made a deal with Free Point Commodities, LLC, to buy fuel for its plants and that Stone Point Capitol has investments in Free Point Commodities, LLC, AND in Millstein & Co., Jim Millstein is also is the Chief Executive Officer of Millco Advisors, LP, and Millstein & Co., which raises several flags.

 

Both Bloomberg and Business Wire have reported that Jim Millstein is involved in the restructuring of PREPA. In addition, sources tell me half of the meetings dealing with the PREPA restructuring have been in his office.

 

Upon further investigation, the timing of the Stone Point Capitol investment in Millstein & Co. is disturbing. In July 9, 2015, both parties announced that the former had acquired a minority interest in the latter. It also states “Millstein & Co. will use proceeds of the investment to bolster its principal investment business.” This means the transaction brought actual cash to Millstein.

 

On August 24, 2015, PREPA announces that it has reached a $869.6 million deal with Free Point Commodities, LLC. We all know that negotiations for such a huge contract take much more than 46 days so when Stone Point Capitol purchased an interest in Millstein & Co., these negotiations with its subsidiary were ongoing or about to begin.

 

Question is, what involvement, if any, did Jim Millstein have in the negotiations of such an important fuel contract? Did the purchase of an interest in Millstein & Co. have anything to do with the contract negotiations of this contract? The people of PR have a right to know what are its advisors up to. Explanations are in order.