The governor of Puerto Rico, Pedro Pierluisi, a regular defender of the company, confirmed in a press conference that LUMA will continue to have control of the Puerto Rico Electric Power Authority (PREPA) despite the blackouts reported daily and the seven increases in the electricity bill since the Canadian company started working on the island 18 months ago
NEW YORK – Despite the mobilization in the streets of Puerto Rico by some groups and the pressure from members of the diaspora in the United States not to extend the supplementary contract, LUMA Energy, the foreign consortium in charge of transmission and distribution of electric power on the island, will continue to operate at least until the debt restructuring process of the Electric Power Authority (PREPA) is completed.
This Wednesday, the governor of Puerto Rico, Pedro Pierluisi, a regular defender of the company, confirmed in a press conference that LUMA will continue to have control of PREPA .
Pierluisi, who insisted that the cancellation of the contract would be “disastrous” for the island, acknowledged that after the renewal, the Canadian consortium will be paid more for its services due, among other things, to the costs of inflation. The payment to LUMA would be around $122 million , according to estimates by Pierluisi, also president of the ruling New Progressive Party (PNP).
“Right now under the supplemental agreement, LUMA collected in this year, which just passed, around $115 million. For next year, there is an adjustment that is already provided in the contract itself, based on inflation costs , among other things, which then increases the amount to around $122 million,” the president declared.
According to the report by El Vocero, the outlet in Puerto Rico that first reported on the extension of the agreement, the extended contract does not have a specific expiration date.
A letter from the Fiscal Control Board, the federal agency that has been managing the island’s finances since 2016, mentions that the figure assigned for LUMA in fiscal year 2023 is $121.7 million. The amount may be spent from the effective date of the proposed amendment, that is, Thursday, December 1.
According to the governor, the process to restructure the Authority’s debt may result in the federal court confirming the Debt Adjustment Plan (PAD) for that purpose or Judge Laura Taylor Swain dismissing the petition.
“If the court confirms a PAD for the Authority, then all the provisions of the 15-year contract between the Public-Private Alliances (APP) , PREPA and LUMA, which was signed in mid-2020, will enter into force. At that time, the amount to the company and a system of bonuses or penalties will be established based on their performance”, explained the chief executive.
In the last few hours, while the vote of the Board of Directors of the PPP Authority to authorize the extension was finalizing, groups such as “No more promises” protested near La Fortaleza , Pierluisi’s official residence in San Juan, under the slogan “Let’s break the contract”.
The group, one of the most active in Puerto Rico against the LUMA contract, believes that the company’s entry has exacerbated the energy crisis on the island , where blackouts are the order of the day as well as increases in the electricity bill. .
“The Fiscal Control Board, the Energy Bureau, the colonial government of Puerto Rico together with the United States are complicit in the acute energy crisis and its impacts on the health and lives of the people, especially those who survive in precariousness due to decades of failed policies and corruption. We call on the people to keep the fight in the streets, which are public spaces and spaces for expression where we will continue to denounce abuses. We demand the recovery to public hands of the electrical energy service , the cancellation of the contract and the restitution of the employees unfairly displaced by the privatizing company LUMA. Fight yes, surrender no! This town respects itself! #SeAcabaronLasPromesas”, read a message this morning on the collective’s Facebook account.
The process to authorize the contract extension was not without controversy.
Eduardo Ferrer Ríos and Liza Ortiz Camacho, the representatives of the public interest before the Board of Directors of the PPPs, rejected the process in which the extension was approved by a simple minority .
“ They passed over the interests of the people of Puerto Rico ”, considered Ferrer Ríos.
The representatives of the public interest abstained from voting, while the other three members, the Secretary of State, Omar Marrero; the Secretary of the Treasury, Francisco Parés, and the President of the Planning Board, Julio Lassús, favored the agreement.
In the opinion of the dissidents, abstention would mean votes against.
“We could not validate a vote contrary to the law… under Law 120 abstention is understood as a vote against the amendment of the supplementary contract ,” Ortiz Camacho said at a virtual press conference.
The duo stated that Law 120-2018 establishes that any transaction related to the Electric Power Authority must have the affirmative vote of the representatives of the public interest.
Ortiz Camacho and Ferrer Ríos also thundered against the Fiscal Control Board for having approved the process before the PPP vote.
The members anticipated that they will go to court to request that the vote be annulled .
For his part, Marrero rejected the claims of the complainants, arguing that the discussion was extensive and in accordance with the law.
“We confirm that the procedures and meetings were followed in a manner consistent with what has been our practice in the past. Wanting to say otherwise is lying to Puerto Rico. The members had all the necessary information and that it was requested to consider the matter in question,” the government representative indicated in writing to El Vocero.
From the diaspora and before the contract extension was confirmed, the former president of the New York City Council, Melissa Mark-Viverito, indicated that the temporary extension could be an opportunity to advance in the fight against the energy company from different areas.
“We are hearing the cry. They have every justification for being frustrated and we are going to fight with them (with the Puerto Ricans) to try to put pressure on the governor because this contract cannot continue . There is a lot of suffering in Puerto Rico. My mother, who is 75 years old, I always think of her, who like any other Puerto Rican suffers these blackouts, what these blackouts mean for the quality of life . What has to do with health, what hospitals suffer, disabled people. It is not acceptable ”, she raised about the deficiencies that have been attributed to LUMA since June of last year when the clauses of the 18-month contract were activated.
Mark Viverito, who was part of a delegation of New York political leaders and activists who called for the cancellation of LUMA’s contract in the framework of the SOMOS conference in Puerto Rico in November, described LUMA’s management over the past few months as “ unacceptable”.
“Now we have to analyze the legal aspect, what options we have legally or what options Puerto Rico has legally to take LUMA and this contract to court. But also follow us in the diaspora getting support . The New York City Council has already presented a resolution asking that this contract not be signed and that it be cancelled,” said the former candidate for the NY Ombudsman’s Office in an interview with the Válgame PR podcast.
For its part, the non-governmental organization “Queremos sol” that proposes an energy transformation for Puerto Rico based on renewable energy, stated in its networks that the Government of Puerto Rico must stop insisting on extending a lousy and expensive service.
“ Everyone in Puerto Rico knows that LUMA is useless . The Government cannot continue to ignore the claim that they cancel the contract,” the members of the entity indicated in one of several tweets in which they also included the telephone number of La Fortaleza for users to call and claim the cancellation of the contract.
For its part, the LUMA press team circulated a press release on Wednesday stating that the extension is an opportunity to continue rebuilding the electrical system in Puerto Rico .
“The supplemental contract extension will allow the over 3,000 men and women of
LUMA continue working to build a more reliable, resilient and
clean for the 1.5 million Puerto Ricans whom we have the privilege to serve”,
said Wayne Stensby, president and CEO of LUMA. Now more than ever, we all must
unite and focus on what matters most to all: building a better energy future
para Puerto Rico”, añadió.
According to the company, in 18 months, they have reduced the frequency of service interruptions, or the number of interruptions the average customer experiences in a year, by 30% compared to Authority figures.
Additionally, LUMA was credited with having connected more than 36,500 clients to solar cover and having promoted 251 infrastructure projects financed by FEMA (Federal Emergency Management Administration) with an investment of $6.2 billion.
Criticism against LUMA increased after the impact of Hurricane Fiona in Puerto Rico on September 18.
After the attack on the system, it took the entity about three weeks to restore electricity service to 90% of the population .