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Prepa Yet To Amend 11% Rate Discount For New Companies And Expansions

Final Approval Could Be Delayed Until February 2003


October 24, 2002
Copyright © 2002 CARIBBEAN BUSINESS. All Rights Reserved.

The Puerto Rico Electric Power Authority (Prepa) is just getting around to holding public hearings regarding a rate amendment that would give companies establishing or expanding operations on the island an 11% discount on industrial electricity rates.

Public hearings will be held in late November to outline the qualifications required for plants to be eligible for the special rate.

Prepa Executive Director Hector Rosario announced in March that the agency was reserving a 50-MW (megawatt) power generation block to provide discounted energy rates over a five-year period. Considering that an average company uses about 1,500 kW (kilowatts), about 33 companies could benefit from the discount. At the time, Rosario said energy savings could amount to $3.6 million annually.

"In July, Prepa’s board approved a preliminary draft with the stipulations for companies to qualify for the 11% energy rate discount," said Prepa spokeswoman Virginia Gomez. "We expect to hold public hearings in late November, after which a public examiner will prepare the final document and register the new rate with the Puerto Rico State Department. The final approval of the amended rates should take 30 days from the time the public hearings are held and be fully implemented by February 2003, at the latest."

Besides the 11% discounted rate, Prepa had said it would provide a single bill for companies with multiple plants or subsidiaries in Puerto Rico. Prepa’s Planning Office would also carry out a study on how to provide further energy rate reductions so the island can compete with other countries’ low power rates.

"Single billing for multiplants in Puerto Rico and further rate reductions are part of our work plan," said Prepa Planning Office Director Hector Alejandro. "But our immediate priority is to implement the 11% discounted rate as soon as possible."

Puerto Rico Manufacturers Association (PRMA) President Manuel Cidre also announced that his organization would meet periodically with Prepa regional administrators to develop a plan to alleviate the problems caused by power failures to manufacturers. As part of the initiative, the PRMA would serve as a contact between Prepa and its members.

A CARIBBEAN BUSINESS last year on the costs of doing business on the island showed that energy rates in Puerto Rico exceeded those in the U.S., Ireland, Mexico, and Singapore.1 (CB May 10, 2001)

  In cents per KwH (kilowatt-hour) % Difference between P.R. and country
Puerto Rico 9.3 to 15.4 (12.3 average) ---
U.S. (national average) 4.5 to 8.3 107% to 86%
Ireland 6 105%
Mexico 5 to 6 86% to 157%
Singapore 7.2 to 9.1 29% to 69%

1 Only the Dominican Republic’s energy rate of $0.18 per KwH exceeded (by 46%) Puerto Rico’s $0.123 average cost per KwH.

This Caribbean Business article appears courtesy of Casiano Communications.
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