UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

In re: PROMESA
Title III
THE FINANCIAL OVERSIGHT AND
MANAGEMENT BOARD FOR PUERTO RICO,

as representative of Case No. 17 BK 3283-LTS

THE COMMONWEALTH OF PUERTO RICO, et al. (Jointly Administered)

Debtors.

In re: PROMESA
Title III
THE FINANCIAL OVERSIGHT AND
MANAGEMENT BOARD FOR PUERTO RICO,

as representative of Case No. 17 BK 4780-LTS

THE COMMONWEALTH OF PUERTO RICO, et al.

Debtor.

COMMENTS OF THE PUERTO RICO ENERGY COMMISSION ON

"URGENT MOTION OF THE FEDERAL OVERSIGHT AND
MANAGEMENT BOARD," AND
REQUEST FOR ORDER DIRECTING FOMB AND COMMISSION
TO DEVELOP A PROTOCOL THAT ENSURES COORDINATION
AND AVOIDS CONFLICT
 Table of Contents

I. The Commission's and the FOMB's purposes are compatible

and mutually reinforcing .1

A. Because PREPA is a Commonwealth-created monopoly,

regulation of its performance by an expert, independent,
Commonwealth-accountable agency is essential. ...1

B. Given PREPA's poor financial and operational condition,

FOMB's involvement in its turnaround is essential.7

C. There is full compatibility between the Commission's

purposes and duties under Commonwealth law, and the
FOMB's purposes and duties under PROMESA ............7

II. Commission-FOMB compatibility can be preserved, and conflict

avoided, only through Commission-FOMB coordination ..8

III. To ensure the necessary coordination, an order granting the CTO

Motion should explicitly refrain from preempting, or authorizing
FOMB to preempt, the Commission's authority ...10

IV. Regardless of how it rules on the CTO Motion, the Court should direct
representatives of the Commission and FOMB to develop, and
submit to the Court, protocols that preserve compatibilities
and avoid conflict ..12

Appendix on Commission Activities.15

 To the Honorable United States District Court Judge Laura Taylor Swain:

On October 26, 2017, the Financial Oversight and Management Board for Puerto Rico

("FOMB") filed with the Court its "Urgent Motion ... for Entry of Order Confirming

Appointment and Authority of Chief Transformation Officer" for the Puerto Rico Electric Power

Authority ("CTO Motion"). The Puerto Rico Energy Commission ("Commission") takes no

position on the selection of PREPAs leadership, subject to these comments. Specifically, the

Commission asks this Court to (a) state explicitly that any approval of the CTO Motion does not

preempt the Commission's authority; and, regardless of how this Court rules on the CTO Motion,

(b) direct counsel for FOMB and the Commission to develop, for this Court's approval, a set of

protocols ensuring that the actions of each entity are coordinated and mutually supportive, and

not in conflict.

I. The Commission's and the FOMB's purposes are compatible and

mutually reinforcing

A. Because PREPA is a Commonwealth-created monopoly, regulation of its

performance by an expert, independent, Commonwealth-accountable agency
is essential.
PREPA is a monopoly. It provides life-saving service to nearly 1.5 million captive

customers. PREPA's existence, and its monopoly status, is a product of Commonwealth statutes

administered in part by the Commission. We explain here the Commissions authority, the

regulatory principles that undergird that authority, and the range of orders the Commission has

issued to carry out its authority.

The Commission's authority: The Commission is the Island's institutional expert, and

main decision-maker, on the performance of electricity marketswhether that performance is by

a monopoly like PREPA or by competitive providers of generation and other electric services.
1

Its key statute is Act 57-2014, 22 L.P.R.A. 1051 et seq., which created and empowered the

Commission after 70 years of PREPAs unregulated monopoly service. The breadth of the

Commission's duties is illustrated by these opening provisions:

"[The Commission] shall be an independent government entity in charge of

regulating, overseeing, and ensuring compliance with the public policy on energy
of the Commonwealth of Puerto Rico."
"The Energy Commission created herein shall be the key component for the
faithful and transparent execution of the Energy Reform."
"[T]he Commission --
"shall be able to guarantee the orderly and integrated development of our
electrical system, thus ensuring the reliability, efficiency, and transparency
thereof, and the provision of electric power services at reasonable prices."
"shall evaluate [PREPA's plans] regarding its obligation to efficiently
generate electric power, various operational issues, and the integration of
renewable energy, among other mandates."
"shall oversee all types of operations, processes, and mandates pertaining to
the efficiency of the energy sector of the Island."
"shall oversee [that] PREPA's debt issues are in the public interest."
"shall approve the electricity rates proposed by PREPA."
"shall require that the prices included in any power purchase agreement,
wheeling rate, and interconnection charge are fair and reasonable, consistent
with the public interest, and compliant with the parameters established by
this Commission...."
"shall... guarantee that PREPA meets its obligations to bondholders."

Regulatory principles: In carrying its statutory duties, the Commission, like most utility

regulatory agencies, applies the following principles, among others:

a. The purpose of regulation is performance. Utility regulators aim to induce

performance comparable to what effective competition would produce: reliable, innovative

service at reasonable cost. That regulatory purpose is the same whether the task is to regulate a

provider of monopoly services, or to convert a monopoly market into one or more competitive

2

markets. To induce performance, regulators define standards, assign consequences for meeting

or failing those standards, and then enforce those standards. By taking these steps, regulators

align market participants self-interest with the public interest. Effective regulators envision the

products and services that best serve customers, then design and oversee the market structures

and regulatory inducements most likely to produce, cost-effectively, that mix of products and

services.

b. In determining what costs are reasonable costs, the key criterion is economic

efficiency. A utility cost is reasonable only if it is the least-cost alternative among all feasible

alternatives. By knowing those alternatives and applying the least-cost test, professional

regulators induce economic efficiency. They do so as well by allocating costs to cost-causers

and benefits to benefit-creators. Whether the market is a monopoly market or a competitive

market, they base rewards and penalties not on incumbency, not on political connections, but on

meritobjectively and expertly determined.

c. Utility regulatory decision-making requires a composite of professional

disciplines. Whether the issue is rates, reliability, safety or innovation, regulatory decision-

making requires access to and inputs from the professional disciplines of engineering,

economics, finance, accounting, management and law. To gather and combine these disciplines,

the Commission uses procedures that elicit fact-based presentations from diverse experts and

customer representatives, subjecting those presentations to detailed discovery and transparent

questioning. Often the submissions are under oath. Procedural formality varies as resources and

time considerations demand. At bottom: Facts and expertise, applied openly, bounded by

statutory and constitutional principles and subject to judicial review, are the ingredients the

Commission uses to induce cost-effective performance.

3

 These principles are evident in the Commission's many orders. Three are key.

Transition Charge: In June 2016, the Commission approved, under Act 4-2016, 22

L.P.R.A. 1071 et seq., a mechanism designed to reduce the costs to customers of PREPA's

repayments to certain bondholders. In light of those bondholders' agreement to reduce, and defer

payment of, a portion of PREPA's debt obligations, the Commission approved a "Transition

Charge" to be backed by the Commonwealths full faith and credit. Although the Transition

Charge order has been superseded by events,1 its effect, once the magnitude of the Transition

Charge was calculated and approved, would have been to reduce investor uncertainty by moving

dollars from ratepayers directly to the bondholders.

Integrated resource plan (IRP): In September 2016, the Commission approved an

integrated resource plan for PREPA.2 The IRP order approved, among other things, (a)

temporary, limited spending on the Aguirre Offshore Gas Port; (b) the permitting, maintenance,

development and retirement for various fossil units; and (c) certain investments in transmission

and distribution necessary for system stability and operability. The IRP order also required a

detailed audit of renewable energy contracts, a competitive bidding process for certain new

renewable energy projects, and certain investments in energy efficiency.

1
The Transition Charge was tied to the then-existing Restructuring Support Agreement
(RSA). The FOMB initiated the PROMESA Title III proceeding on the date the RSA expired, and
the RSA was not extended.

2
Section 1.3(ee) of Act 57-2014, 22 L.P.R.A. 1051a, defines an IRP as a plan that
considers all reasonable resources to satisfy the demand for electric power services during a
specific period of time, including those related to the offering of electric power, whether existing,
traditional, and/or new resources, and those related to energy demand, such as energy conservation
and efficiency or demand response and localized energy generation by the customer.
4

 Rate decision: In January 2017, the Commission issued the first-ever order in which

PREPAs $3.5 billion in annual costs were reviewed, and rates established, by an independent

and expert regulatory body. While granting PREPA nearly all the dollars it requested (for both

capital and operating expenditures), the order detailed the extent of system deterioration; the

history of counterproductive political involvement in financial, operational and rate deficiencies;

and the absence of disciplined budgeting and spending.

In the rate order's crucial Part Four, the Commission addressed the problem of PREPAs

imprudent costs. The Commission explained that because PREPA was a non-profit,

government-owned entity, the conventional regulatory treatment of imprudent costsrequiring

their absorption by shareholders rather than imposing them on ratepayersis unavailable

because a non-profit company has no private shareholders. In the non-profit context, unless all

costs are recovered from ratepayers the utility will have insufficient revenues to operate;

disallowing costs from rates is cutting off ones nose to spite ones face. Given this constraint,

the only way to protect ratepayers from imprudent costs is to prevent PREPA from incurring

them to begin with. The Commission therefore required PREPA to submit an annual budget

before spending its money. That way, the Commission could prevent imprudent expenditures

before they are incurred. (PREPA had proposed an annual true-up process that amounted to

We spend it, we tell you about it, you make ratepayers pay it the very absence of

accountability that Act 57-2014 was enacted to fix.)

Recognizing that its own budget review process needed to be coordinated with the

PREPA Boards review process, the Commission directed PREPA to provide options for such

coordination. PREPA has not done so. Instead, it sought Commonwealth court review of the

Commissions rate order (not, of course, the portion granting PREPA nearly all the dollars it

5

requested, but the portion requiring this budget review feature). The Puerto Rico Fiscal Agency

and Financial Advisory Authority, supported by FOMB, filed with this Court on September 5,

2017, a Notice of Removal removing that appeal to this Court.3

As explained in Part III below, the Commission recognizes the overlap between its

budget review requirementsnecessitated by the Commission's statutory obligation to protect

ratepayers from imprudent costs and make rates just and reasonableand the FOMB's need to

review and approve budgets. There are ready ways to coordinate these two efforts so that each

strengthens the other while avoiding duplication of effort. The purpose of these Comments is to

cause that coordination to occur.

Other orders: The Commission has approved the format for a simplified customer bill so

that customers better understand the bases for their charges. It also has initiated a performance

proceeding to examine all components of PREPA's activities. These efforts and others are

summarized in the Appendix.

All these activitiesconducting integrated resource planning, establishing special

charges to satisfy bondholder concerns, setting rates, auditing performanceare the central

purposes of utility regulation, as carried out by commissions throughout the Mainland and, in

fact, the world. The Puerto Rico Energy Commission is the institution authorized to carry out,

and expertly capable of carrying out, these activities in Puerto Rico.

3
See Docket No. 279.
6

 B. Given PREPA's poor financial and operational condition, FOMB's
involvement in its turnaround is essential
PROMESA section 101(a) makes the FOMB's purpose plain: "to provide a method for a

covered territory to achieve fiscal responsibility and access to the capital markets." There is no

question that given PREPA's centrality to Puerto Rico's economy, and given PREPA's financial

and operational condition, FOMB must play role in achieving PREPA's fiscal responsibility and

its access to capital markets.

C. There is full compatibility between the Commission's purposes and duties

under Commonwealth law, and the FOMB's purposes and duties under
PROMESA
The Commission's and FOMB's purposes aim for the same results: financial solvency,

capital attraction, operational discipline, prudent expenditures and responsive customer service.

To achieve its purposes, FOMB proposes to install its appointee as PREPAs chief executive.

Regardless of who leads PREPA, an independent regulator is necessary to ensure that PREPA's

actions are consistent with its Commonwealth statutory duties. A monopoly entity created and

protected by Commonwealth law must be accountable to Commonwealth law, regardless of who

manages that entity.

This legal logic is supported by practical logic. Management is distinct from regulation.

A utility regulatory commission does not make utility management decisionsalthough its

principles and procedures necessarily influence, and even constrain, those decisions. And utility

management, especially in a monopoly setting, cannot make regulatory decisions, because only

regulatory decisions can instill the objective discipline that is missing in the absence of

competition. If Mr. Zamot leads PREPA, he will not be independent of PREPA. Like any CEO

of a utility subject to Act 57-2014, he will cause PREPA to take actions that are subject to Act

57-2014. Indeed, the Commission stands ready to assist Mr. Zamots acclimation to the electric

7

industry, including the central role that regulation plays in the electric industry. The better he

understands how his new duties leading PREPA fit with the Commission's authority over

PREPA, the smoother this executive transition will be. Planning that acclimation can be part of

the coordination efforts we ask the Court to order in Part IV below.

II. Commission-FOMB compatibility can be preserved, and conflict

avoided, only through Commission-FOMB coordination
With careful coordination, both upfront and continuous, there are numerous ways for the

Commission and the FOMB to support each other's essential roles and duties. Consider the CTO

Motion at para. 36:

A restructuring will only be successful if all its components are coordinated.

PREPA's restructuring needs to include the right activities and expenses (as
approved by the Oversight Board in the certified budget per PROMESA 202);
the right transformation plan and fiscal measures (as approved by the Oversight
Board in the certified fiscal plan per PROMESA 201); and the right way to
implement PREPA's transformation and right size PREPA's debt. Thus, no party
in interest can take any action that in any way contradicts an approved fiscal plan
or that will impede the implementation of the transformation as part of a Plan.
PROMESA 204.

The "right activities and expenses" are those which produce rates that satisfy Act 57-2014's "just

and reasonable" standard. The "right transformation plan" is the one that aims to produce the

market structures, and induce the investments, that will most cost-effectively produce the mix of

products and services the Commonwealth needs and which its ratepayers can affordas

determined through the types of objective inquiry that Act 57-2014 requires the Commission to

carry out (and that all utility regulators carry out). The "right ... fiscal measures" will reflect cost

savings and waste avoidance measures that the Commission has approved after comparing

alternatives according to transparent criteriaagain, as required by Act 57-2014 and as all

regulators do. The "right size [of] PREPA's debt" will reflect the capital expenditures that the

8

Commission has deemed consistent with the transformation plan developed after hearing from

experts and affected entities.4

We do not mean to draw a "line in the sand; i.e., to signal an intent to challenge any

attempt to preempt. We mean instead to illustrate the roles that all state-level regulators play,

and the role that Commonwealth statutes require this Commission to play. We know what

PROMESA section 4 says: The provisions of this Act shall prevail over any general or specific

provisions of territory law, State law, or regulation that is inconsistent with this Act. This

language signals conflict preemption, not occupation-of-the-field preemption. PROMESA also

states, at section 503(b)(1)(D), that if the Commission determines, per a PROMESA-

established deadline, that an Energy Project will adversely affect an approved Integrated

Resource Plan, then the Energy Commission shall provide the reasons for such

determination and the Energy Project shall be ineligible for Critical Project designation.

Congress did not intend to eliminate the Commission; it intended to avoid conflict between

FOMB and the Commission. We fully recognize that some of the Commissions

responsibilities overlap with FOMBs. It is the necessity of addressing that overlap that leads

us to ask this Court to order coordination between the Commission and FOMBthereby saving

this Court the trouble, and all affected entities the uncertainty, associated with hearing and

resolving preemption claims.

4
The quoted passage refers to the "certified fiscal plan." The specific fiscal plan certified
for PREPA has, understandably, some distance to go before it can guide PREPAs decisions. It
will need specific tasks, deadlines and executives responsible; budgets associated with those tasks;
and enforceable milestones for projects, among other measures. The Commission looks forward
to addressing these matters with PREPA and FOMB.

9

 The Commission is preparing an internal document that identifies all areas of possible

overlap, and describes how coordination can occur to combine the Commission's technical

expertise and legal duties with the FOMB's powers and duties. Moreover, in the past week the

Commissions Chairman has approached his FOMB counterpart to begin that coordination. (A

contact from the Commissions counsel to FOMBs counsel last May did not bear fruit.)

Coordination is the answer.

III. To ensure the necessary coordination, an order granting the CTO

Motion should explicitly refrain from preempting, or authorizing
FOMB to preempt, the Commission's authority
While PROMESA section 4 states an intent to preempt inconsistent territory law,

Congress could not have intended, merely by virtue of enactment, to eliminate the entire Puerto

Rico legal structure designed to discipline the PREPA monopoly. That result would return us to

the unregulated monopoly conditions that so poorly served our citizens and led to Act 57-2014s

enactment.5 Section 4 of PROMESA intends conflict preemption, not occupation-of-the-field

preemption.

This Court already has implied that PREPA cannot set rates without regulatory

permissionpresumably from the Commission. The CTO Motion states (at para. 41,

paraphrasing and quoting this Court): "As this Court reasoned in its rejection of the lift stay

5
As Act 57-2014s Statement of Motives states:

After more than seventy (70) years of its creation, and more than three decades of
having achieved the total electrification of the Island, PREPA has become a
monopoly that regulates itself; sets its own rates without actual oversight; incurs
operational, managerial, and administrative deficiencies whose actual cost, at the
end of the day, is borne directly by customers; and whose governance lacks
transparency and citizen participation. All of the above contributes to Puerto Rico
being among the top U.S. jurisdictions with the highest energy cost.
10

motion, a receiver could not be appointed because 'permission to require the appointment of a

receiver to manage PREPA's operations and seek the approval of rates higher than those PREPA

has thus far chosen to chargeis facially inconsistent with Section 305 of PROMESA [and

cannot be ordered by the court] absent the Oversight Board's consent, which has not been given

here.'" (emphasis added) "Seek the approval" by whom? Regardless of who runs PREPA,

PREPA may not lawfully set rates for 1.5 million customers unilaterally. That job is the

Commissions.6 To set rates, the Commission must find that the costs to be recovered through

those rates are reasonable costs. And to sure that PREPA's costs are reasonable costs, the

Commission must use its objectivity, its expertise and its statutory procedures. There is no

practical or legal way to remove the Commission from its rate-setting role.

Congress did not intend FOMB to remain in Puerto Rico permanently, or even

indefinitely. Its very job is to work itself out of a job. Once FOMB's departs, an independent,

professional regulator will be necessary to ensure that any providers of monopoly services, and

any markets opened for competition, operate cost-effectively. That independent regulator is the

Commission. Reducing the Commission's powers now, intentionally or inadvertently, causing

the Commonwealth's regulatory muscles to atrophy, will make it difficult for regulatory rigor to

return once FOMB departs, thus undermining FOMBs own purpose.

6
There is an Act 26 Committee, created as a result of Act 26-2017, 2017 P.R. Stat. 26,
with the power to set the rates of all Commonwealth Government entities, including public
corporations. Act 26-2017 did not, however, affect the Commissions authority. Moreover, the
Act 26 Committee has taken no action affecting PREPAs rates. On all rate matters, PREPA has
properly approached the Commission, not the Act 26 Committee. The Commissions expectation,
and its operating assumption, is that it will carry out its rate-setting duties as Act 57-2014 requires;
and that if the Act 26 Committee wishes to adjust those Commission-set rates it will do so. These
intra-Commonwealth facts do not affect the Commission-FOMB relationship at issue before this
Court.
11

 In short, there is every reason to cause the Commission and FOMB to mesh their roles.

There is no good reason to eliminate the Commission's role; no good reason to return Puerto

Rico to the pre-2014 days of a monopoly not subject to the discipline of an independent

regulator.

The Commission interprets FOMBs Motion as seeking for Mr. Zamot a set of

responsibilities and authorities as broad as, but no broader than, those which PREPA and its

management already have under existing Commonwealth law. Nothing in PROMESA

authorizes FOMB to expand the activities of PREPA beyond those authorized by

Commonwealth law. If FOMB instead intends its CTO Motion to seek authority for Mr. Zamot

without any PREPA accountability to the Commission (a position the Motion does not take,

although the absence of any references to the Commission and Act 57-2014 raised our

eyebrows), we ask that FOMB make its position clear. If FOMB does so, we then ask this Court

to direct the parties to brief this question. But far more productive, in the short and long term,

would be for the Court to (a) hold that preemption is not necessary at this time, because potential

conflicts are avoidable and coordination is beneficial; and (b) direct counsel for FOMB and the

Commission to develop protocols that preserve, and mutually reinforce, the duties and powers of

each; and then, if necessary, to present any remaining areas of disagreement to the Court for

resolution. The latter point is discussed next.

IV. Regardless of how it rules on the CTO Motion, the Court should direct
representatives of the Commission and FOMB to develop, and submit to
the Court, protocols that preserve compatibilities and avoid conflict
Puerto Rico's electric future, in the short and long terms, depends on the Commission and

FOMB both exercising their respective authorities. To support and strengthen the efforts of

each, they must coordinate. The areas to coordinate cover all actions affecting restoration and

12

transformation, including but not limited to: budgeting, rate-setting, integrated resource

planning, contracting and finance. If the Commission and FOMB succeed, they will have

modeled the type of Commonwealth-FOMB cooperation necessary to give confidence to

bondholders, businesses, and citizens of Puerto Rico in particular and of the United States as a

whole. To that end, the Commissions Chairman last week sent to FOMB's Chairman a draft

memorandum of understanding in which these two individuals direct their counsel to design

solutions. (A separate Commission effort in May 2017 to involve FOMB and its outside counsel

in discussions did not bear fruit.)

To give this effort both momentum and accountability, we ask the Court to find as

follows:

1. The cost-effective restoration and transformation of Puerto Rico's electricity

industry requires the involvement of both the Commission and FOMB.
2. There are likely multiple ways for the two entities to coordinate their activities
and duties to support each other's efforts.
3. There is no inherent conflict between the objectives and details of both statutes;
thus a finding of preemption at this time is unnecessary.

In addition, we ask the Court to order counsel for FOMB and the Commission to develop a

memorandum of coordination that achieves the objectives of both statutes to the maximum

extent practicable, to be filed with this Court no later than November 20, 2017. We ask the

Court also to direct that should such efforts fail, or should some matters be resolved but others

not be resolved, each entity shall submit to the Court, by November 29, 2017, its proposal for

coordination, with each such proposal designed to achieve the objectives of both statutes.

13

 Dated: November 3, 2017 Respectfully submitted,
San Juan, Puerto Rico
PUERTO RICO ENERGY COMMISSION

By its attorneys:

/s/ Alejandro J. Figueroa-Ramrez

/s/ Tania M. Negrn-Vlez

Puerto Rico Energy Commission

268 Muoz Rivera Ave., Suite 702
Sam Juan, PR 00918
Tel: (787)-523-6262
Email: afigueroa@energia.pr.gov
tnegron@energia.pr.gov

/s/ Scott Hempling

(pro hac vice admittance pending)

Scott Hempling Attorney at Law, LLC

417 St. Lawrence Dr.
Silver Spring MD 20901
(301) 754-3869
shempling@scotthemplinglaw.com

Attorney for the Puerto Rico Energy

Commission

14

APPENDIX

DOCKET DESCRIPTION
SUBJECT
NUMBER
The rate case is an examination and subsequent ruling on PREPA's first petition for permanent rates before an independent
CEPR-AP- regulatory body. In its review, the Commission sought to obtain the most thorough picture of PREPA's finances and
Rates 2015-0001 costs, so as to establish a rate structure consistent with both PREPA's current financial and operational situation, and to
carry out the Commission's and PREPSAs duties to further Puerto Rico's energy public policy.

As part of its rate review petition, PREPA included a petition for provisional or temporary rates to be applied to its
Provisional CEPR-AP- customers for the duration of the rate case before the Commission and until the application of the final set of rates
Rate Order 2015-0001 approved by the Commission.

The rate case established PREPAs total revenue need but, because of the tight statutory deadline, did not address major
questions about how to allocate PREPAs revenue needs among customer groups (revenue allocation); and for each
Revenue CEPR-IN-2017- customer, between the fixed charge and the variable charge (rate design). This separate investigation is intended to
Allocation & 0001 complete that work. It includes dealing with the adequacy and completeness of the information and data used by PREPA
Rate Design to determine revenue allocation and rate design. In this investigation, the Commission seeks to determine and gather the
information necessary to determine the revenue allocations and rate designs that are consistent with economic efficiency,
and just and reasonable rates.

Parallel to the rate proceeding, the Commission carried out a proceeding to establish the content and format of PREPA's
New "New Transparent Bil,l" pursuant to 6B(C) of Act No. 83. PREPA's new transparent bill, which will enter into force
Transparent CEPR-AP- along with PREPA's new rates, will itemize specific cost categories, such as subsidies, contribution in lieu of taxes,
Bill 2016-0002 the Transition Charge, and fuel costs; so that customers will have clearer picture of the key components of their monthly
electric service bill.

Through this proceeding, the Commission enabled the PREPA Revitalization Corporation ("PREPARC") to set in motion
a series of financial transactions with participating PREPA bondholders by which PREPA's overall "legacy" debt is
Transition reduced, in exchange for the establishment of a "Transition Charge", which will be billed to customers along with their
Charge monthly electricity bills in order to cover the repayment of PREPA's legacy debt. Under Act 4-2016, the amount will be
CEPR-AP- determined by a Commission-approved "Adjustment Mechanism". The Commission's final decision modified
2016-0001 PREPARC's proposed charge by making it a volume-based charge rather than a fixed charge, as well as establishing key

15

 exceptions for certain net metering and fixed block customers, upholding the provisions of Act 114-2007 and Act 22-
2016.

In an Integrated Resource Plan (IRP) proceeding, required periodically by Act 57, PREPA submits for the Commission's
evaluation and approval a comprehensive, long-term plan for the use of all existing and future resources PREPA intends
Integrated CEPR-AP- to deploy in order to meet the demand for electric service, over a 20-year planning period. The IRP includes an assessment
Resource Plan 2015-0002 of the planning environment, a detailed study of a range of future load forecasts, existing generation and demand
(IRP) resources, current investments in conservation technology, existing transmission and distribution facilities, and the
relevant forecasts and scenario analyses in support of the selected plan.

This proceeding is a far-reaching inquiry into PREPA's overall performance as an electric utility. Informed by its IRP
PREPA's CEPR-IN-2016- and rate rulings, its overall regulatory body of work, as well as ample stakeholder input, the Commission is in the process
Performance 0002 of gathering the necessary information with regard to PREPA's current performance, in order to regulate a set of
performance metrics for PREPA across several key indicators.

Aguirre Site Stemming from key questions raised by the Commission and stakeholders during the IRP proceeding, the Commission
Economic CEPR-AP- seeks to ascertain whether PREPA's reliance on the Aguirre Offshore Gas Port (AOGP) project as part of its proposed
Analysis 2017-0001 IRP is economically beneficial to PREPA's ratepayers.

This investigation responds to a petition by the Independent Consumer Protection Office, which brought to the
Commission's attention several concerns raised by a number of customers of Sunnova Energy Corporation, regarding
Sunnova CEPR-IN-2016- their dissatisfaction with Sunnova's services pursuant to its long-term power purchase contracts for rooftop solar. Within
Investigation 0001 this investigation, the Commission has issued a series of information requirements to Sunnova in order to better
understand its business model and determine its place within the broader regulatory framework for electric service
providers other than PREPA.

In this proceeding, the Commission addresses a complaint by PV Properties, Inc., who alleges that PREPA is in violation
of the provisions of Act 82-2010 with regard to the latter's refusal to purchase the Renewable Energy Certificates (RECs)
PV Properties CEPR-QR- that the former has offered for sale. This complaint raises, among others, questions concerning the nature and scope of
v. PREPA 2017-0001 Act 82-2010 in shaping and creating a market for RECs in Puerto Rico, the role of the Commission in enforcing said
Act's provisions on this matter, and the interaction between the RECs market and PREPA's Renewable Portfolio Standard
(RPS) obligations.

Hurricane The Commission initiated this investigation in order to assess the overall state of Puerto Rico's electric system after
Mara CEPR-IN-2017- Hurricane Mara's strike on September 20, 2017. With the information gathered in this proceeding, the Commission will
Investigation 0002 determine the appropriate short-term regulatory actions necessary to facilitate the restoration of Puerto Rico's electric

16

 power system and, more importantly, the longer-term actions that will enable its reconstruction into a more robust,
efficient, and resilient system.

Pursuant to its mandate under Act 114-2007, the Commission established the standards by which PREPA must abide in
Net Metering CEPR-MI- regulating the interconnection of net metered customers into its grid. In the face of questions concerning PREPA's
Regulation 2014-0001 compliance with its statutory obligations, the Commission's orders in this docket have enforced and ensured PREPA's
Standards compliance with Puerto Rico's public policy promoting net metering and distributed generation.

The Commission presides over disputes that customers have with charges on electric service bills, as well as the consumer
Customer Bill Multiple protections the law affords consumers. The Commissions process include an initial informal procedure before the
Disputes electric service company (pursuant to the Commission's regulations), and a latter formal review procedure before the
Commission.

17