Reports: Citing 'serious cash flow problem,' AES demands government bailout from Puerto Rico

[TexasTowelie]

The coal-fire energy generator AES Puerto Rico is in dire economic straits and is demanding a bailout from the island government, according to emails and letters written over the past 11 months and reviewed by the Center for Investigative Journalism and La Perla del Sur newspaper.

A letter from Financial Oversight and Management Board Executive Director Natalie Jaresko to the Puerto Rico Electric Power Authority (PREPA) Governing Board uncovered what until now had been a secret between AES executives and members of Gov. Pedro Pierluisi Urrutia’s administration: that the AES is going through its worst economic crisis and to get out of it, it is demanding that the Puerto Rico government come to its rescue, according to the news outlets.

“The cash flow problem at AES-PR is serious,” reveals Jesús Bolinaga Serfaty, the president of AES, in a communication written on March 24, 2021 to PREPA executives that had been kept secret, but that the Center for Investigative Journalism and La Perla del Sur obtained after months of requests and the presentation of a mandamus resource for access to public information.

The documents show that as of June 2021, AES wanted to transfer ownership of its coal plant in Guayama to the public corporation or any other government entity, wanted PREPA to grant it a new contract, this time only as “operator” of the facility, and wanted the island government to assume all its expenses, including the purchase of coal and more than $150 million in environmental costs. The latter costs would include those incurred in complying with environmental laws, standards and regulations such as the export of coal ash and the monitoring of groundwater, among others.

Read more: https://www.sanjuandailystar.com/post/reports-citing-serious-cash-flow-problem-aes-demands-gov-t-bailout

[abqtommy]

1. snark alert: Mebbe the Puerto Rican government has a few spare rolls of paper towels

they can provide to AES-PR. (alert off) I'm not sure this is snark but I figure better
safe than sorry.

[WHITT]

2. Let The Stockholders Eat It

Parent company:

AES Corporation (NYSE)

[TexasTowelie]

3. So you want the electrical customers to sit in the dark?

AES is threatening to shut down the plant because it isn't profitable. The stockholders will take a hit, but if they are diversified then they might not even notice. However, the electrical customers are immediately vulnerable.

[WHITT]

4. Surely PREPA

can operate it at FAR less cost to the consumer, and invest the savings into transitioning to solar.

[TexasTowelie]

5. What evidence do you have that PREPA can operate the plant at a reduced cost?

Even if PREPA gets involved, the plant will still close. Considering that the plant will close by 2028, it may have trouble recruiting new employees. PREPA also has significant financial problems and they aren't renowned for fixing much of anything so it appears that your faith may be misplaced.

In addition, Puerto Rico is trying to privatize its electrical network because it previously held a monopoly position. I doubt that they are going to reverse policy to take on a plant with significant liabilities, namely all of the coal ash that they are paying to ship and dispose of in the United States.

[WHITT]

6. Profit