The Puerto Rico Oversight Board is clashing with the Puerto Rico legislature on the privatization of the island’s electrical transmission and distribution system.
Board Executive Director Natalie Jaresko on Saturday sent a letter to the leaders of Puerto Rico House of Representatives and Puerto Rico Senate telling lawmakers the board would give them until 11:59 p.m. on Wednesday to approve the money for LUMA Energy to run the system. If the legislature does not approve the money by then, the board “shall certify the budget” for the funding, Jaresko wrote.
Under the Puerto Rico Oversight, Management, and Economic Stability Act the board has the legal right to approve budgets without the legislature or governor’s agreement.
Jaresko was responding to a letter from House Speaker Rafael Hernández Montañez sent Friday that said the legislature could not approve a measure that would allow LUMA’s operations to begin.
The board and the local government picked LUMA to run the transmission and distribution system in June 2020. Since then, LUMA has been preparing to assume the reigns of the system on June 1.
The leaders to whom Jaresko wrote — Hernández Montañez and Senate President José Dalmau Santiago — did not respond to a request for a comment.
On May 5 Puerto Rico Gov.
In another development that may lead to further tensions between the legislature and board, on May 1 the Puerto Rico House of Representatives voted 27 in favor and 3 against on House Bill 3, which would repeal most of a 2017 labor law reform.
House Bill 3 will revert the probationary period for all employees to three months, instead of the automatic 12 months for white collar workers and nine months for all other employees. It would establish a mandated severance for workers with one to 15 years of service who are unjustly terminated of three-months plus two weeks of pay for each full year of service. Those with more than 15 years of service would get more generous terms.
The bill would also restore a presumption that terminations are unjust unless proven otherwise. It would increase the mandated accrual of paid vacation and sick leave to employees to a total of 15 days a year and it would make the island’s labor law more friendly to labor in other ways.
Since the spring of 2017 the board has been trying to free the labor market and make its regulation like that found in the 50 states. The board believes a freer labor market will lead to greater economic growth for the island and thus more revenues for the government’s General Fund and for its public authorities. The board assumes certain labor market reforms in its fiscal plan estimates of government revenues.
The board is considering the House of Representative’s vote for House Bill 3 and has not yet responded to it, a spokesman said.
