Oversight Board report suggests range of changes for Puerto Rico utility

first_img FacebookTwitterLinkedInEmailPrint分享Bond Buyer ($):The official Puerto Rico Oversight Board report on the territory’s debt recommended changes in budgeting, rating and bond issuance practices, but said it was generally too late to punish anyone over the sale of debt that led to the biggest municipal default.The Oversight Board released the 608 page report on Monday evening, almost a year after hiring Kobre & Kim to do the research and create it, consistent with a requirement of the Puerto Rico Oversight, Management, and Economic Stability Act. Board Members Arthur González, Ana Matosantos, and David Skeel oversaw the process. Concerning the public utilities, the report said that if they are to remain public entities their boards should be altered to be a mix of independent and governor-appointed members. The members should have longer terms and terms staggered across administrations. The boards should create audit committees of their members. The committees should exclude uncollected revenues from rate covenant calculations.Further, the report says that the utilities should be required to disclose their use of bond proceeds. It noted that from 2010 to 2013 there was a several hundred million dollar discrepancy between what Puerto Rico Electric Power Authority bond proceeds were supposed to be used for and what they were actually used for.There should be independent rate boards for both the utilities and these boards should make regular and predictable changes to the rates. Finally with regard to the utilities, an independent fiscal agent should be empowered to implement the public utilities’ respective fiscal oversight agreements “in a way that requires compliance with rate covenants.”More ($): Puerto Rico debt report makes slew of recommendations, says it’s too late for punishment Oversight Board report suggests range of changes for Puerto Rico utilitylast_img

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