MBIA Inc.’s National Public Finance Guarantee is urging Puerto Rico’s federal board to consider putting a receiver in charge of the island’s bankrupt power utility after the electricity provider lost two chief executive officers last week amid an uproar over their salaries, Bloomberg News reported. The Puerto Rico Electric Power Authority needs politically independent leadership, lawyers for the bond insurer wrote to the federal board in a letter dated July 17. Management at Prepa, as the utility’s known, fell into disarray last week as its chief executive officer resigned after four months on the job and his replacement quit one day after the agency announced his appointment. National is seeking to work with the federal board to install independent management that will work on the utility’s debt restructuring and overhaul the authority. Read more.
In related news, dysfunction at Puerto Rico’s bankrupt electric utility prompted a Congressional oversight committee yesterday to invite the U.S. commonwealth’s governor to testify at a special hearing scheduled for next week, Reuters reported. The U.S. House of Representatives’ Committee on Natural Resources, which has oversight of U.S. territories, requested Governor Ricardo Rosselló or a member of his administration to appear at the July 25 hearing to discuss de-politicizing the Puerto Rico Electric Power Authority (PREPA) and a “credible plan” for its transformation. The committee on Wednesday called for the hearing in the wake of a leadership crisis at the utility that began last week. PREPA is in the process of trying to restructure itself while also restoring and upgrading the island’s electric grid. Read more.