Oversight Board authorizes Government access to Emergency Reserve to address drought emergency
On July 31, 2026, Governor Jenniffer González Colón declared a state of emergency throughout Puerto Rico due to low rainfall and declining reservoir levels, and authorized measures for water conservation, resource management, and a coordinated interagency response.
The Financial Oversight and Management Board for Puerto Rico authorized the Government to access the Emergency Reserve to respond to the drought emergency and address immediate needs, including the supply, storage, distribution, and purification of potable water.
“The Fiscal Plan established the Emergency Reserve exactly for moments like this, when the Government must respond quickly to support Puerto Rico’s wellbeing,” said Oversight Board Executive Director Robert F. Mujica, Jr. “The General Fund budget fully funded the Emergency Reserve, and the Government is now in a position to provide immediate and critical relief to help the people of Puerto Rico cope with this emergency.”
The reserve, established under the Fiscal Plan for Puerto Rico and fully funded through the General Fund budget, helps ensure the Government has resources available when emergencies arise. In 2017, when Hurricane Maria hit, no such reserve was available.
Read the full media release.
Oversight Board revokes approval of PREPA contract with Power Expectations
On June 2, 2026, the Oversight Board approved a contract between the Puerto Rico Electric Power Authority (PREPA), Power Expectations LLC, Enchanted Rock LLC, and Reyes Contractor LLC, for temporary energy generation. But on August 7, the Oversight Board became aware that Enchanted Rock was not part of the contract. Enchanted Rock said its name and signature were used without authorization.
According to the Third-Party Procurement Office (3PPO), which manages the procurement process, Power Expectations lacked financial capacity and technical expertise to perform the contract without Enchanted Rock. Since Enchanted Rock’s participation had therefore been a fundamental basis for the Oversight Board’s approval, the Oversight Board revoked its approval on August 14. It is the first time the Oversight Board has revoked its approval of a contract.
Following the Oversight Board’s revocation, PREPA cancelled the temporary generation contract on August 18.
Since then, the Oversight Board has been informed of more accusations of fraudulent conduct. In addition, Enchanted Rock said it was not in a position to satisfy the terms of the contract.
On June 12, unbeknownst to the Oversight Board, Power Expectations transferred the interest of Enchanted Rock to an entirely new party, Flotek Industries Inc. It remains unclear how Flotek was selected. Proposed amendments or modifications to a contract, including the replacement of a material counterparty, are subject to the Oversight Board’s review and approval. However, such approval from the Oversight Board was never sought or provided.
In addition, Flotek announced that it would provide only 40 megawatts (MW) of power generation capacity. The project, however, contemplated the deployment, installation, operation, and maintenance of 400 MW within a 90 to 150-day deployment period.
Deployment was scheduled to begin on June 10 and conclude on November 7. As recently as August 5, 3PPO reported to the Oversight Board that since the execution of the contract on or about June 12, no milestone had been met and no progress had occurred.
Nothing was built, shipped, or delivered. Without the Oversight Board’s involvement, review process, and persistent questions, the contract would have gone ahead, and the people of Puerto Rico may never know the facts about a deeply flawed procurement, which could not provide the power generation promised.
Bondholder group rejects offer to resolve PREPA bankruptcy
On June 1, 2026, the Oversight Board had proposed a new settlement to certain bondholders to substantially reduce PREPA’s debt. On July 14, the Oversight Board announced that those bondholders rejected outright the Oversight Board’s significant offer to resolve PREPA’s bankruptcy under Title III of PROMESA.
The Oversight Board had hoped this offer would re-engage those bondholders in mediation. But the group simply dismissed the offer as “dead on arrival” without providing a counteroffer.
Meanwhile, those bondholders reasserted their claim of approximately $12 billion against PREPA, far more than what the people of Puerto Rico can repay.
The Oversight Board is keenly aware of the burden PREPA’s bankruptcy is putting on Puerto Rico and continues to be willing to engage with all creditors constructively to resolve the PREPA debt efficiently and in a manner that serves the interests of Puerto Rico’s residents, businesses, and electric system.
The Executive reintroduces fiscal safeguards bills during current legislative session
Governor Jenniffer González Colón reintroduced two important bills to strengthen the budget process that had previously not been enacted. The reintroduced bills are House of Representatives Bill (H.B.) 1391, which creates a Budget Stabilization Fund and a Five-Year Financial Plan (formerly H.B 1261), and H.B. 1392 (formerly H.B. 1262) to create a Public Capital Projects Fund under the Office of Management and Budget (OMB).
The Oversight Board had supported this legislation when it was first introduced in the previous legislative session. Puerto Rico’s fiscal progress — controlled spending, structural surplus requirements, successful debt restructurings, and stable budgets — represents hard-won progress that took years of difficult work to achieve. Strengthening the statutory fiscal architecture will protect future generations and Puerto Rico’s path forward.
The reintroduced bills are consistent with the previous versions. The Oversight Board encourages the Executive and Legislature to work together in the evaluation and enactment of these important bills.
Oversight Board concludes its summer internship program
This summer, the Oversight Board successfully concluded its first internship program, welcoming undergraduate and graduate students for an eight-week experience. Interns worked closely with professionals across the organization, gaining a deeper understanding of the Oversight Board’s work while contributing to projects within their assigned teams.
Through collaboration, mentorship, and speaker sessions, interns had opportunities to strengthen their professional skills, gain practical experience, and broaden their understanding of the fiscal and economic matters affecting Puerto Rico.
Stakeholder engagement:
August 18, 2026
Oversight Board Executive Director Robert F. Mujica, Jr. joined finance sector leaders at the First Economic Congress of the Puerto Rican Association of Financial Analysts (APAF), where he talked about the importance of establishing economic development pillars for Puerto Rico, including permanent fiscal rules, improving public procurement processes, and building adequate funding reserves. Mujica also emphasized the need to reach an agreement to resolve PREPA’s debt without placing the burden on Puerto Rico’s residents and businesses.
July 22, 2026
Oversight Board Executive Director Robert F. Mujica, Jr. joined television host Alexandra Lúgaro for an interview on Última Palabra, where they discussed 10 years of PROMESA, the Oversight Board’s mandate under the law, and the next steps to help Puerto Rico achieve fiscal responsibility.
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