SAN JUAN, Puerto Rico (AP) — A key hearing over the future of Puerto Rico’s crumbling power company and its staggering $9 billion debt began Monday in federal court following years of acrimonious talks between the U.S. territory's government and creditors seeking to recover their investments.
The hearing, which is expected to last up to two weeks, will focus on a proposed debt-restructuring plan. It comes nearly seven years after Puerto Rico’s government filed for the biggest bankruptcy in U.S. municipal history after announcing it was unable to pay its more than $73 billion debt following decades of corruption, mismanagement and excessive borrowing.
Scores of protesters gathered outside the courthouse before the hearing, decrying that power bills, already among the highest in a U.S. jurisdiction, would increase again if the plan is approved, leading to an even higher cost of living in the U.S. Carribean territory.
“Every dollar we pay bondholders is a dollar that is not available for the energetic transformation that Puerto Rico urgently needs,” Juan Rosario, who previously represented consumers on the power company’s board, said before the hearing.
The island of 3.2 million people is still struggling through chronic power outages more than six years after Hurricane Maria pummeled Puerto Rico as a powerful Category 4 storm, razing its electric grid.
Officials have noted that aging infrastructure and lack of maintenance also is to blame, with Puerto Rico currently relying on generators from the federal government to help meet its energy needs.
More than 800 people have objected to the debt-restructuring plan in a document that lawyers filed in court, and more protests are expected.
The plan was crafted by a federal control board appointed by U.S. Congress to oversee Puerto Rico’s finances. In a meeting held days before the hearing, Robert Mujica, the board’s executive director, called the plan “fair and equitable.”
“We believe it’s confirmable,” he said.
That remains to be seen, with Judge Laura Taylor Swain on Monday hearing from an array of attorneys who have noted that the majority of creditors don't approve of the plan. Swain also is scheduled to hear from Puerto Rican retirees, business owners and others on Tuesday.
Previous debt-restructuring plans have been scrapped in recent years, further enflaming already bitter discussions between creditors and the government.
The debt held by Puerto Rico’s Electric Power Authority is the largest of any of the island’s government agencies and the only one that hasn’t been restructured.
Government officials have said that restructuring the debt is key to boosting Puerto Rico’s economy and attracting new investors.