San Juan, PR – October 6, 2026 – The Financial Oversight and Management Board for Puerto Rico today issued the following statement:
The Oversight Board’s recent revocation of its approval for the $5.9 billion, 10-year contract between the Puerto Rico Electric Power Authority (PREPA), Power Expectations LLC, Enchanted Rock LLC, and Reyes Contractor LLC to deploy temporary power generation was unavoidable and in the best interest of the people of Puerto Rico. The Oversight Board did so against the explicit objection of the government procurement agency. Tellingly, the alleged fraud and forgery happened after the Oversight Board’s review, and we have referred the matter to federal law enforcement.
We had serious questions about this contract from the day we received it from the Government for review and gave our final approval only after we required the Government to add significant safeguards to protect the people of Puerto Rico. Then we found out the contract changed and we revoked our approval. The Oversight Board is neither a party to the contract nor is it leading the procurement process.
The Puerto Rico Oversight, Management, and Economic Stability Act of 2016 (PROMESA) gives the Oversight Board a mandate of oversight. It did not create a procurement agency. The law is explicit: government contracts must “promote market competition” and must be “not inconsistent with the approved fiscal plan.” That is the standard our contract review enforces, and that is why our review relies on the government parties entering the agreement to vet their counterparties. The contract review process and oversight Congress envisioned with PROMESA worked to halt this contract, and the contract review process has saved Puerto Rico billions of dollars since PROMESA was enacted.
An aggressive group of New York hedge funds is trying to use this procurement to get to what they really want: $12 billion from PREPA that would harm the reconstruction and maintenance of Puerto Rico’s energy system. These hedge funds continue to stand in the way of PREPA exiting the bankruptcy-like process under Title III of PROMESA and the people of Puerto Rico’s need for a functioning and financially sound utility. The attempt by certain bondholders to use this matter to advance their own interest does not change the financial reality confronting PREPA. The Oversight Board takes its responsibility and mandate under PROMESA very seriously, both in restructuring Puerto Rico’s debt and to achieve fiscal responsibility.