Will Puerto Rico's debt overhaul bring a new chance to prioritize clean energy?

Officials in Puerto Rico are going back to the drawing board after they scrapped a deal that would have cut part of the public debt owed by the island’s bankrupt power company.

Puerto Rico has a new opportunity to effectively restructure its power company’s debt to provide incentives for its transition to renewable energy, a goal supported by both local and federal policies.

Some experts had criticized the initial debt-restructuring agreement, saying it wouldn't have significantly reduced the power company's debt load while discouraging the U.S. territory's transition to renewable energy — and contributing to a rise in electric bills for Puerto Ricans, who already pay almost twice as much as customers in the U.S. mainland for unreliable electricity.

Despite the criticism, rising inflation and surging oil prices motivated Gov. Pedro Pierluisi to cancel the deal and renegotiate an agreement.

The Puerto Rico Electric Power Authority, or PREPA, the island’s power company, holds about $9 billion in debt, the largest of any U.S. public corporation when it declared bankruptcy in 2017.

While Puerto Rico’s government formally exited bankruptcy two weeks ago, debt-restructuring proceedings for PREPA and for Puerto Rico’s Highways and Transportation Authority remain unresolved.