Puerto Rico’s Power Authority Effectively Files for Bankruptcy<br />The government said the move to, in effect, file for bankruptcy was the only way to reduce the existing debt of the Puerto Rico Electric Power Authority<br />“to a sustainable level.” The utility, known as Prepa, had previously negotiated an out-of-court deal to reduce its bond payments by about 15 percent.<br />By MARY WILLIAMS WALSHJULY 2, 2017<br />Puerto Rico’s troubled power company defaulted on a deal to restructure roughly $9 billion in bond debt<br />and sought court protection from its creditors, the government said on Sunday.<br />Bill Fallon, the chief executive of National Public Finance Guarantee Corporation, a bond insurer, called the move “improper” and warned<br />that it “would leave Prepa years away from attracting the private investment necessary to modernize.”<br />Electrical power has long been a drag on the island’s economy.<br />In addition, there are longstanding accusations that Prepa’s fuel-purchasing office for many years bought dirty oil sludge as<br />fuel, charged consumers the much higher price of cleaner distillates, and then created a slush fund with the difference.
