Why It Matters
The roughly $9 billion debt restructuring program for the Puerto Rico Electric Power Authority (PREPA) remains unresolved more than nine years after entering a federal, court-supervised bankruptcy-like mechanism called PROMESA Title III. An August mediation report describes the negotiations as "at a standstill," according to a new Congressional Research Service (CRS) report.
The Financial Oversight and Management Board (FOMB) proposed a restructuring plan in June 2026 that creditors rejected, and how any bondholder compensation would be financed remains unclear.
As of July 8, only $2.7 billion had been disbursed of the $10.7 billion in Federal Emergency Management Agency (FEMA) Public Assistance obligated for PREPA's permanent reconstruction.
Puerto Rico's average residential electricity rate stood at about $0.244 per kWh in March 2026, roughly 31% above the U.S. average of $0.186 per kWh.
The Big Picture
The $8.0 billion gap between obligated and disbursed FEMA funds reflects a recovery pace the report describes as "much slower than expected." Petroleum and diesel accounted for 62% of Puerto Rico's generation capacity, while wind and solar supplied only 4% of power in 2025.
Act 1-2025, signed in March 2025, pushed back renewable energy goals and extended coal use through 2032. The Trump administration removed the Department of Energy's PR100 renewable-energy study from the DOE website; an archived copy is linked here. A Jones Act waiver announced in March was prompted by the war with Iran and has been extended through November, as documented in a MARAD waiver report.
On Aug. 1, 2025, President Trump had dismissal notices sent to five of the seven FOMB members; three members sued, and a district court issued a temporary restraining order. That order was converted to a permanent injunction on Sept. 1, 2026, approximately 13 months after the dismissal notices. The FOMB currently consists of four voting members, and the report says vacancies create ongoing uncertainties for the debt restructuring case.
A November 2025 third-party review commissioned by the FOMB concluded that expenditures for Genera PR, a private energy company based in San Juan, had yet to improve reliability and called for "total plant teardowns and full unit replacement."
PROMESA, P.L. 114-187, enacted in June 2016, created the Oversight Board and the Title III process, and it remains the framework for PREPA's restructuring.
The Bottom Line
Oral arguments on net revenues in the bondholder accounting counterclaim are scheduled for mid-November 2026. The bondholders' original claim for roughly $8.5 billion remains in litigation.
Access the Legis1 platform for comprehensive political news, data, and insights
Spot something wrong? Report an issue with this article
