In re: Puerto Rico Electric Power Authority Rate Review

Analysis Group worked with the Puerto Rico Electric Power Authority’s (PREPA’s) legacy bondholders in PREPA’s rate review before the utility’s regulator, the Puerto Rico Energy Bureau (PREB). PREPA serves the entire island and its 3.2 million residents. The utility filed for bankruptcy in 2017 to restructure approximately $9 billion in debt – the largest municipal utility bankruptcy in US history. The rate review represented the first reset of PREPA’s electricity base rates since 2017, and PREPA submitted a multi-billion-dollar operational and capital budget for the fiscal years 2026-2028.

An Analysis Group team led by Managing Principal Brian Gorin and Vice Presidents Charles Wu and Lindsay Greenbaum supported industry experts Patrick Hogan and Anthony Hurley, who assessed PREPA’s proposed expenses, the executability of a proposed capital budget, and the use of federal funding. The team also supported Analysis Group Senior Advisor Susan Tierney, who opined on rate design and mechanisms for potential future payment of legacy debt. The three experts each submitted written testimony and testified at the rate review hearings.

In its final rate order, PREB extensively cited the work of Analysis Group’s experts in its decision to reduce expenses borne by ratepayers and reclassify expenses to federal funding pathways. PREB also instituted a placeholder legacy debt rider, a measure recommended by Dr. Tierney, as it would “allow [PREPA] to begin collecting funds to make legacy debt payments in a more expeditious manner” once the bankruptcy was resolved.