Reliable electricity, clean water, and well-maintained roads are essential elements of Puerto Rico’s economic growth. The budgets the Oversight Board certified for the fiscal year 2024 that began on July 1, 2023, ensure vital investments in Puerto Rico’s infrastructure so roads, water, and energy systems improve.
The budget for the Highways and Transportation Authority (HTA), for example, includes a 12% increase in capital expenditures, to almost $560 million. That is money spent on highway maintenance and improvements rather than operating costs to run the agency. The HTA budget is a historic opportunity for HTA to accelerate improving road safety. To seize this opportunity, however, HTA must become more efficient in handling such capital improvements, and more effective in deploying investment funds as outlined in the HTA Fiscal Plan.
HTA’s budget projects $940 million in revenues, up 5% from 2023, due to ongoing record levels of federal funding, higher toll revenue projections, and Commonwealth funding to improve non-toll roads.
The fiscal year 2024 budget for the Puerto Rico Aqueduct and Sewer Authority (PRASA) allocates funding to initiate a pilot program for its meter replacement program. PRASA aims to replace its current mechanical meters with a more advanced, smart metering infrastructure. With this sophisticated technology, PRASA can reduce its billing errors and improve its capability in assessing water losses. PRASA, too, must focus on long-term sustainability of its operations, including the cost of chemicals for water and wastewater treatment.
PRASA’s budget projects revenues of $1.1 billion. Rate adjustments have been critical for PRASA to meet its financial obligations without sacrificing necessary investments in maintenance and system-wide improvements. PRASA must also ensure revenue sources are diversified and do not fall entirely on ratepayers.
The fiscal year 2024 budget for the Puerto Rico Electric Power Authority (PREPA) is an important milestone: it is the first year in which the Puerto Rico Energy Bureau (PREB) issued its determination of the budgets for PREPA and private operators of the grid and energy generation before the start of the fiscal year and prior to the Oversight Board’s certification. This is a clear sign of the progress of the Puerto Rico energy sector transformation and regulatory landscape.
PREPA’s budget projects total revenues of $3.9 billion. The budget still reflects the challenges faced by Puerto Rico’s energy system and underscores the need to complete a full transformation of PREPA. Volatile fuel and commodity prices, declining revenue, and an aging infrastructure makes this transformation imperative. Large capital works are required. Puerto Rico must have an energy sector that is modern, agile, and capable of efficiently providing reliable electricity service at the lowest possible cost.
Puerto Rico’s residents and businesses depend on well-maintained roads, safe water, and reliable electricity. This is why the Fiscal Plan continue to focus on improving and transforming HTA, PRASA, and PREPA.
The Oversight Board will continue to support Puerto Rico’s infrastructure priorities to promote recovery and stability, improve services and ultimately, foster economic growth.
