Board: “Approved with Observations” on the LUMA T&D extension; 71.04 million from Dec. 1, 2022

On Nov. 29, 2022, FOMB general counsel Jaime A. El Koury wrote Fermín Fontanés Gómez that the Board had reviewed the amendment to the Puerto Rico Transmission and Distribution System Supplemental Terms Agreement of June 1, 2021 and concluded “Approved with Observations.” Approved is not disbursed. The review is limited to PROMESA section 204(b)(2) and does not cover the contracting legal file. LUMA took interim T&D operational control on June 1, 2021. The only remaining conditions for the Service Commencement Date and the 15-year O&M term are PREPA’s Title III exit and LUMA’s acceptance of a confirmed Plan of Adjustment. The amendment extends the Supplemental Agreement until those conditions are met or waived. Extension of the supplement is not the 15-year term. A remaining condition is not Title III exit. PREPA’s certified FY2023 budget assigned 121,785,000 dollars — 121.8 million — of which 71,041,250 — 71.04 million — would be spent from Dec. 1, 2022 under Operator Service Fees. Assigned is not spent. Those metrics do not turn the approval into a disbursement or into the 15-year term.

Source: Junta de Supervisión Fiscal. https://docs.oversightboard.pr.gov/n/id6ek3qs8yrm/b/CR_PUBLIC/o/2802_CRPLetterP3A-LUMASupplementalAgreementExtensionNovember292022(002).pdf