NEW ISSUE – BOOK-ENTRY ONLY RATINGS (see RATINGS herein): Moody’s: Baa1 S&P: BBB+ Fitch: BBB+ $650,000,000 PUERTO RICO ELECTRIC POWER AUTHORITY Power Revenue Bonds, Series 2012A Power Revenue Refunding Bonds, Series 2012B The Power Revenue Bonds, Series 2012A and Power Revenue Refunding Bonds, Series 2012B (collectively, the “Bonds”) of Puerto Rico Electric Power Authority (the “Authority”) are being issued pursuant to a Trust Agreement, dated as of January 1, 1974, as amended, between the Authority and U.S. Bank National Association, New York, New York, successor trustee (the “Trust Agreement”). The Bonds, the outstanding bonds previously issued under the Trust Agreement and any additional bonds that the Authority may from time to time issue under the Trust Agreement are payable solely from the Net Revenues (as described herein) of the Authority’s electric generation, transmission and distribution system. The Bonds will have the following characteristics: • The Bonds will be dated their date of delivery. • The Bonds will be registered under the book-entry only system of The Depository Trust Company (“DTC”). Purchasers of the Bonds will not receive certificates evidencing the Bonds. • Interest on the Bonds will be payable on July 1, 2012 and on each January 1 and July 1 thereafter. • The Bonds will be subject to redemption, commencing on July 1, 2022, as described herein. See Mandatory Redemption and Optional Redemption under DESCRIPTION OF THE BONDS for more information. • The inside cover page contains information concerning the maturity schedule, interest rates and prices or yields of the Bonds. • The Authority may determine, in its sole discretion, to obtain insurance with respect to some or all of the Bonds. The Underwriters will provide notice on or before the date of pricing if the Authority determines to insure all or any part of the Bonds. • Prospective investors should consider the information appearing under RISK FACTORS AND INVESTMENT CONSIDERATIONS before making an investment decision. • In the opinion of Bond Counsel, under existing law and assuming compliance with the tax covenants described herein, and the accuracy of certain representations and certifications made by the Authority described herein, interest on the Bonds is excluded from gross income for Federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”). Bond Counsel is also of the opinion that such interest is not treated as a preference item in calculating the alternative minimum tax imposed under the Code with respect to individuals and corporations. Interest on the Bonds is, however, included in the adjusted current earnings of certain corporations for purposes of computing the alternative minimum tax imposed on such corporations. Bond Counsel is further of the opinion that interest on the Bonds is exempt from state, Commonwealth of Puerto Rico and local income taxation. See TAX MATTERS herein. • The Authority expects that the Bonds will be available for delivery to DTC on or about May 1, 2012. • The issuance of the Bonds and the purchase of the Bonds by the Underwriters are subject to the approval of legality by Nixon Peabody LLP, New York, New York, Bond Counsel, and certain other conditions. Pietrantoni Méndez & Alvarez LLC, San Juan, Puerto Rico, will pass upon certain legal matters for the Underwriters. The Bonds are not a debt or obligation of the Commonwealth of Puerto Rico or any of its municipalities or political subdivisions, other than the Authority, and neither the Commonwealth of Puerto Rico nor any of its municipalities or political subdivisions, other than the Authority, shall be liable for the payment of the principal of or interest on the Bonds. Morgan Stanley Citigroup J.P. Morgan Barclays BMO Capital Markets BofA Merrill Lynch Goldman, Sachs & Co. Jefferies Ramirez & Co. Inc. Raymond James RBC Capital Markets UBS FS Puerto Rico Wells Fargo Securities BBVAPR MSD FirstBank PR Securities Oriental Financial Services Popular Securities Santander Securities Scotia MSD VAB FINANCIAL April 12, 2012 $650,000,000 PUERTO RICO ELECTRIC POWER AUTHORITY $630,110,000 Power Revenue Bonds, Series 2012A Maturity Date Principal Interest July 1, Amount Rate Yield CUSIP* 2029 $34,510,000 4.80% 4.82% 74526QZX3 2042 80,000,000 5.05 5.08 74526QZY1 $157,460,000 5.00% Term Bonds due July 1, 2029; Yield: 4.82%†; CUSIP* 74526QZZ8 $358,140,000 5.00% Term Bonds due July 1, 2042; Yield: 5.08%; CUSIP* 74526QA28 $19,890,000 Power Revenue Refunding Bonds, Series 2012B Maturity Date Principal Interest July 1, Amount Rate Yield CUSIP* 2016 $ 3,345,000 2.50% 2.00% 74526QA36 2016 16,545,000 5.00 2.00 74526QA44 * Copyright, American Bankers Association. CUSIP data herein is provided by Standard & Poor’s, CUSIP Service Bureau, a division of the McGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. CUSIP numbers are provided for convenience of reference only. Neither the Authority nor the Underwriters take any responsibility for the accuracy of such numbers. † Priced at the stated yield to the July 1, 2022 optional redemption date at a redemption price of 100%. See “Redemption” under DESCRIPTION OF THE BONDS herein. In connection with this offering, the Underwriters may overallot or effect transactions which stabilize or maintain the market prices of the Bonds offered hereby and of the Authority’s outstanding Power Revenue Bonds at levels above those which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. The Underwriters may offer and sell the Bonds to certain dealers and dealer banks and others at a price lower than the public offering price stated on the inside cover page and said offering price may be changed from time to time by the Underwriters. The information set forth herein has been obtained from the Authority, the Commonwealth of Puerto Rico, and other official sources that are believed to be reliable, but it is not guaranteed as to accuracy or completeness and is not to be construed as a representation by any Underwriter. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Authority or the Commonwealth of Puerto Rico since the date hereof. The various tables may not add due to rounding of figures. The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of their respective responsibilities to investors under, the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. No dealer, broker, sales representative or other person has been authorized by the Authority or the Underwriters to give any information or to make any representations, other than those contained herein, and, if given or made, such other information or representations must not be relied upon as having been authorized by the Authority or any Underwriter. This Official Statement does not constitute an offer to sell, or the solicitation of an offer to buy, nor shall there be any sale of the Bonds offered hereby by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. All quotations from and summaries and explanations of provisions of laws, trust agreements, the Bonds and other documents herein do not purport to be complete. Reference is made to said laws, trust agreements, the Bonds and other documents for a full and complete statement of their provisions. Copies of the above are available for inspection at the offices of the Authority and the Trustee. Certain statements contained in this Official Statement reflect not historical facts but forecasts and “forward-looking statements.” These statements are based upon a number of assumptions and estimates that are subject to significant uncertainties, many of which are beyond the control of the Authority. In this respect, the words “estimates,” “projects,” “anticipates,” “expects,” “intends,” “believes” and similar expressions are intended to identify forward-looking statements. All projections, forecasts, assumptions, expressions of opinions, estimates and other forward-looking statements are expressly qualified in their entirety by this cautionary statement: actual results may differ materially and adversely from those expressed or implied by forward- looking statements. [THIS PAGE INTENTIONALLY LEFT BLANK] TABLE OF CONTENTS Page Page INTRODUCTORY STATEMENT ................................................. 1 Transmission and Distribution Facilities ................................ 47 Adequacy of Capacity ............................................................. 50 OVERVIEW ..................................................................................... 2 Plans for Fuel Diversification ................................................. 53 General ...................................................................................... 2 Statistical Information ............................................................. 57 Summary of Operating Results ................................................. 3 Historical