P.R. Laws tit. 22, § 228
(a) The “Hydroelectric System of the Puerto Rico Public Irrigation Service, South Coast”, includes the hydroelectric works and transmission and distribution lines and all facilities making up the electric power system constructed or acquired pursuant to the provisions of the Public Irrigation Law approved September 18, 1908, and laws amendatory thereof or supplementary thereto, hereinafter referred to as the “Public Irrigation Act”, §§ 251—259 of this title, and includes, also, all improvements, extensions and additions thereto constructed since the effective date of the Puerto Rico Water Resources Authority Act, presently Puerto Rico Electric Power Authority Act, §§ 191—217 of this title, all of which shall hereinafter be collectively designated as “the Hydroelectric System”, and all of which works, lines, facilities, improvements, extensions, and additions are now operated by the Puerto Rico Electric Power Authority, hereinafter designated as the “Authority”, under the provisions of § 214 of this title, the books and accounts of the said System being kept separately by the Authority in accordance with the requirements of § 202 of this title.
(b) The operation by the Authority of the Hydroelectric System under the present set-up does not adequately meet the requirements of the district served by said System, and the integration of said System with the present electric properties of the Authority will provide the means, not otherwise available, for expanding and improving the properties now making up the Hydroelectric System and thus meeting the ever increasing demand for electric power service in the district.
(c) The conveyance of the Hydroelectric System to the Authority and its integration with the electric properties of the Authority will permit further expansion and improvement of the System so conveyed and will improve the electric power service in the district.
(d) The average annual net revenues deriving from the operation of the Hydroelectric System during the five (5) fiscal years which ended on June 30, 1953, was approximately two hundred thousand dollars ($200,000). These revenues have permitted the lowering of the amount of the special assessment levied on the lands included in the Irrigation District, South Coast. A sum corresponding to the said two hundred thousand dollars ($200,000) will continue to be provided for the same purposes, pursuant to the provisions of §§ 228—231 of this title. The operation of the Hydroelectric System by the Authority as an independent system, with its present limitations, will not produce in subsequent fiscal years average revenues in excess of the average annual net revenues derived during the five (5) fiscal years which ended on June 30, 1953.
(e) When the Hydroelectric System is integrated with the electric properties of the Authority, the Authority shall, under the provisions of §§ 191—217 of this title, be under obligation to set aside, for payment into the Commonwealth Treasury, a sum equivalent to five percent (5%) of the gross revenues deriving from the sale of electricity to consumers in the municipalities included in the area of the Puerto Rico Public Irrigation Service, South Coast, which five percent (5%) is estimated at approximately fifty thousand dollars ($50,000). The Puerto Rico Public Irrigation Service, South Coast, has never had to pay that sum.
(f) When the conveyance of the Hydroelectric System to the Authority takes place, the setting aside and allocating of the sum of:
(1) $50,000 (the sum estimated in finding (e) above) as provided in § 230 of this title, and
(2) the contributing by the Authority, from its revenues, of the annual sum of one hundred fifty thousand dollars ($150,000) as provided by § 230 of this title, will together equal the net receipts which would have resulted from the operation of the Hydroelectric System and which the Secretary of the Treasury would have had to use for determining the total amount of the special assessments to be levied on the lands at present included in the Irrigation District, South Coast, pursuant to the provisions of §§ 251—259 of this title.
(g) In the fulfilment of its duties under the provisions of § 241(b) of this title, the Authority has advanced to the Puerto Rico Public Irrigation Service, South Coast, funds, not as yet repaid, amounting to approximately two hundred ninety-two thousand three hundred dollars ($292,300) by the close of operations on June 30, 1954, and the value of the properties the title to which is vested in the Authority under the provisions of §§ 228—231 of this title is far in excess of the amount so advanced.
(h) Under the provisions of §§ 191—217 of this title, the Authority may, whenever it deems it advisable in the public interest, take over and operate the Hydroelectric System upon the authorization of the Legislature of Puerto Rico.
(i) The Authority has found, and such findings have the approval of its Consulting Engineers, who were employed pursuant to the provisions of the Trust Indenture dated January 1, 1947 by and between the Authority and the First National City Bank of New York:
(1) That in case the Authority issues its bonds under the provisions of said Trust Indenture in such an aggregate principal amount, bearing interest at such rate, and maturing on such dates as to render same equivalent to annual payments to the holders of such bonds, in the way of principal and interest, in the amount of one hundred and fifty thousand dollars ($150,000) a year over a period of twenty (20) years (which is the annual burden imposed on the Authority by §§ 228—231 of this title as an item of operating expenses to be paid by it), and sells such bonds at par in order to raise funds to acquire by purchase the Hydroelectric System, the purchase price of one hundred fifty thousand dollars ($150,000) a year for twenty (20) years would be a reasonable price to pay for said properties;
(2) that the acquisition of the Hydroelectric System would, in the opinion of the said consulting engineers, preserve, develop and improve the “System” as such word is defined in said trust indenture;
(3) that the additional annual revenues of the “System” (as so defined) will be at least two hundred thousand dollars ($ 200,000) over and above the additional annual expenses resulting from such acquisition, figured as provided by § 209 of the said trust indenture;
(4) that after adding such additional annual revenues to the average annual revenues of the “System”, computed as provided in § 209(e)(i), the percentage obtained by dividing such total amount by the maximum amount of the principal and interest payable in any subsequent fiscal year on the score of all the bonds theretofore issued under the provisions of the said Trust Indenture and then outstanding and all such additional bonds as it might be required to be countersigned and delivered in order to obtain the money for the said purchase price of the Hydroelectric System, should same be purchased in this fashion, would not be less than one hundred and fifty percent (150%);
(5) that the conveyance of the Hydroelectric System to the Authority under the provisions of §§ 228—231 of this title and subject to the conditions hereof, in lieu of the purchase of the Hydroelectric System through the issuance and sale of bonds of the Authority, is acceptable to the Authority, the effect of such coveyance being, substantially, the same as if the Authority had issued its bonds for the acquisition by purchase of the Hydroelectric System and equally profitable to the Authority, and
(6) that it is advisable in the public interest for the Authority to take over and operate the Hydroelectric System.
History —June 20, 1955, No. 83, p. 314, § 1, eff. July 1, 1955.