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Committee warns potential tariff uptick if AS plant exits operations; negotiators outline mitigation steps
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Summary
Legislators were told a financial failure or withdrawal of the AS generating plant could raise retail rates by roughly 1–5 cents per kWh and that ongoing negotiations, repairs and new-unit purchases are being pursued to limit impacts.
During the second part of the hearing the committee shifted to tariffs and legacy debt. Josué Colón (Director Ejecutivo, as introduced on the record) and negotiado representatives described a fiscal and operational problem at the AS plant tied to ash-disposal costs and other verified shortfalls. They said the plant's contract and legislative expiration remains in 2027 but that if the plant stopped operating for financial reasons the island would face a reliability and cost shock.
Why it matters: Negotiado testimony estimated a potential rate impact between "uno y cuatro centavos" and fiscal exposure that could aggregate near $900 million depending on dispatch and season. Legislators pressed negotiators on whether short-term reconciliations or long-term debt settlements would shift costs to customers and how legacy charges might be structured.
Key facts: The negotiado explained the quarterly fuel-cost reconciliation proceeded but the commission chose not to return an approximately $20 million surplus because projections showed fuel costs trending up; the choice was justified as stability for customers. Negotiado and authority staff detailed mitigation steps: repairs to existing units, planned acquisition of eleven new units (noted for availability in 2025) and a public–private process seeking a ~350 MW conventional plant to shore up medium-term capacity.
Exchanges: Senators asked how legacy charges and debt-service components have been handled historically; regulators explained an earlier tariff design earmarked roughly 20% to debt service but those funds had been reallocated over time. The panel stressed that final tariff structure decisions rest with the negociado after any settlement or plan of adjustment is resolved in court or by the fiscal board.
Quotes: "En los próximos meses...definitivamente va a tener un impacto adverso que pudiera tener un impacto de cerca de novecientos millones...y [eso] pudiera estar entre uno y cuatro y entre uno y cinco centavos" — Josué Colón (Director Ejecutivo).
Ending: The negotiado reiterated tariff design is a regulatory process and said any estimates should be treated as preliminary until a plan of adjustment (or settlement) is finalized; the committee asked for additional modeling and documentation to evaluate short- and medium-term scenarios.
