Contradicting Mujica, González Colón insists gov’t owes LUMA nothing

Gov. Jenniffer González Colón

By THE STAR STAFF

Gov. Jenniffer González Colón insisted on Tuesday that the island government does not owe LUMA Energy any money, rejecting a communication from Financial Oversight and Management Board Executive Director Robert Mujica Jr.

“I completely disagree. The [oversight] board’s own financial analysts from the firm Ernst & Young presented to my fiscal team last week, maintaining that LUMA has not provided them with sufficient information to review its finances,” the governor stated at a press conference. “If the board’s analysts say that, how can they conclude that money is owed?”

González Colón emphasized that the LUMA, the private consortium that operates Puerto Rico’s electric power transmission and distribution system, does not provide complete information to the government, which makes it impossible to conclude whether their allegations are accurate.

“They provide partial information, such as what they submitted to the Energy Bureau, which approved a rate increase based on incomplete data,” she said. “Enough with the speculation. I know who has access to the account: LUMA. They send the bills, define how they are presented, and manage that money, not the government of Puerto Rico. The board’s own letter notes that the government has transferred more than $800 million in loans to LUMA for its operations.”

When asked if she maintained that the money is not owed, the governor replied, “Correct.”

“Based on the information we have, they are not owed anything,” she said. “If they provide evidence to the contrary, it will be evaluated, but they have not supplied the necessary information, even to the [oversight] board’s auditors. The government of Puerto Rico has been requesting financial statements for the 2023 fiscal year for over 10 months, and we have not received them because LUMA fails to provide the data. Mr. Saca has been directly asked since the beginning of the year through written communications, and just today, the treasury secretary sent him another letter. This is a clear failure on his part.”

The governor noted that if the agencies do owe the consortium $83 million in unpaid electricity bills, the disbursements will be made.

“However, as long as they do not provide complete information, all we have is partial data,” González Colón said. “They haven’t managed their finances well and are trying to pass their costs on to the people.”

“Regarding that $83 million,” she continued, “the Fiscal Agency and Financial Advisory Authority [AAFAF by its initials in Spanish] is verifying the figures with the agencies. If the debt is confirmed, it will be paid. But what about the $800 million the government has already loaned them and the federal reimbursements they have not requested? LUMA always finds an excuse to breach its contract.”

In his letter, Mujica noted that both the state and federal governments owe money to LUMA and also stated that the consortium is not providing complete information.

In the strongly worded communication sent earlier this week, Mujica called for urgent, coordinated action to address the serious liquidity crisis affecting the island’s energy grid.

He made the remarks in a letter dated Oct. 20 and addressed to representatives from the Puerto Rico Public-Private Partnerships Authority, AAFAF, power generation fleet operator Genera PR, LUMA, and the Puerto Rico Electric Power Authority (PREPA).

The oversight board executive director emphasized that the current lack of cooperation among energy sector entities is “untenable” and warned that the shortage of operating cash is having “real and profound consequences” on the reliability of energy generation and the restoration of the grid.

During a meeting last week, the board said it presented preliminary observations based on limited data provided by the parties. It stressed that these were not final conclusions, as critical information -- such as fuel transfer analyses and internal operating costs -- had not been furnished by PREPA, Genera and others. LUMA was noted for providing a significant amount of data, though additional disclosures are still needed, the board said.

Among the oversight board’s key observations, it found stable revenue and liquidity challenges. Customer cash collections remain consistent with budgeted levels, indicating that revenue shortfalls are not the root cause of the liquidity crisis. However, government agencies reportedly owe $83 million in unpaid bills, and longstanding issues such as non-technical losses continue to strain the system, the board said.

Although PREPA has transferred some $900 million more than GridCo’s budget since privatization (GridCo being the PREPA subsidiary that owns the island’s electricity transmission and distribution infrastructure), much of this has gone toward disaster response and emergency outages. Since February 2025, monthly transfers have fallen below GridCo’s approved budget, impacting operational liquidity.

The board also found that GridCo’s operating cash reserves are nearly exhausted, leading to employee layoffs, delayed supplier payments and halted restoration projects. Genera is also experiencing similar financial strain, the entity noted.

The oversight board also found what is described as a flawed funding methodology since PREPA’s current method of calculating monthly transfers -- based on GridCo’s end-of-month cash balances -- was criticized as unsustainable, effectively assuming operations can run with zero cash reserves.

As of late September, however, PREPA reportedly held $200 million in unrestricted cash, suggesting a potential source of liquidity that could be redirected to stabilize operations. The board also highlighted delays in Federal Emergency Management Agency (FEMA) and Community Development Block Grant Disaster Recovery program reimbursements, with at least $745 million in disaster-related expenses still pending. It cited systemic inefficiencies across multiple agencies, including LUMA, FEMA, the Central Office for Recovery, Reconstruction and Resiliency, PREPA and the island Housing Department.

The oversight board also pointed to longstanding deficiencies in PREPA’s accounting systems, referencing an accounting remediation report prepared by FTI Consulting. The report identified missing data, unreconciled balances and the absence of a unified financial structure as major obstacles to transparency and effective decision-making.

The board reiterated its commitment to facilitating collaboration but stressed that meaningful progress depends on full access to accurate data from all stakeholders. It urged PREPA, Genera PR, and others to promptly fulfill outstanding information requests.

“The time to unite and channel all our efforts toward addressing the challenges before us is now,” the oversight board said in the letter.