A suit by the Puerto Rico Senate against the transfer of the island electrical system’s transmission and distribution system has itself been transferred to the federal Puerto Rico bankruptcy court.
On Thursday the Puerto Rico Electric Power Authority and Fiscal Agency and Financial Advisory Authority transferred the case to the PREPA bankruptcy in the United States District Court for the Puerto Rico District. Judge Laura Taylor Swain is overseeing the bankruptcy.
PREPA and FAFAA told Swain the case can be heard in her court because it is related to the bankruptcy. They said LUMA Energy’s takeover of PREPA’s transmission and distribution systems, which started Tuesday, was integral to the electric authority’s transformation.
“The civil action’s request to nullify the [Operations & Maintenance] Agreement would not only alter PREPA’s rights with respect to the O&M Agreement itself, but affect nearly every conceivable aspect of PREPA’s restructuring, its relationship with its creditors and other stakeholders and the administration of PREPA’s Title III [bankruptcy] case,” PREPA and FAFAA told the court. “Accordingly, the civil action is related to PREPA’s Title III case.”
PREPA and FAFAA’s actions effectively transfers the case immediately to the federal court. However, either the plaintiffs — Senate President José Dalmau Santiago and Puerto Rico Senate — or Judge Swain could take steps to move it back to lower court.
Dalmau Santiago
In response to the suit the judge in the San Juan Court of the First Instance asked the plaintiffs to explain their standing and to address the relevance of the federal PREPA bankruptcy and the approved PREPA fiscal plan.
On Wednesday the plaintiffs submitted a response, in which they told the judge that they had legal standing. They said the Supreme Court had said in matters of public interest and of a constitutional nature, government bodies are generally seen as having an interest. They said that as legislators they generally control the topic at hand and specifically control “public property.”
They said the local court was the right venue.
In other developments concerning LUMA’s takeover, on Thursday protesters of the deal hindered traffic on a major highway near San Juan and marched in front of the Muñiz Air National Guard Base in Isla Verde, Puerto Rico.
