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Writer's pictureThe San Juan Daily Star

Energy Bureau says it can now fine LUMA for non-compliance



“I believe that we are mature enough to use the fines mechanism established by law to force them [LUMA Energy] to consistently improve,” said Puerto Rico Energy Bureau Chairman Edison Avilés Deliz, second from left. “... I’m talking about what regulators typically do with regulated entities in any jurisdiction.”

By The Star Staff


Puerto Rico Energy Bureau Chairman Edison Avilés Deliz said Thursday that after three years of operations under the supplementary contract, they are now in a position to fine LUMA Energy for non-compliance.


Avilés Deliz said the parameter that will be used for the metrics will be the one that the Puerto Rico Electric Power Authority (PREPA) had before it was declared bankrupt.


“From the typical regulatory point of view, as [PREPA Executive Director] Josué Colón mentioned, a ‘baseline’ was established and what we want to see is how LUMA behaves in relation to that ‘baseline.’” Avilés Deliz said at a government transition hearing. “At times, it has been below what the Authority was and at other times it has been above. We have been collecting this information for three years now and I believe that we are mature enough to use the fines mechanism established by law to force them to consistently improve. And I’m not talking about bonuses, I’m talking about what regulators typically do with regulated entities in any jurisdiction.”


At the hearing, Colón indicated that the private consortium that manages PREPA’s transmission and distribution system has not complied with promptly seeking reimbursement of federal funds for reconstruction, which in his opinion has caused a fiscal problem for PREPA. It came to light that the company hired by LUMA Energy to handle the issue of reimbursements is IEM, which also has contracts for billions of dollars with the Central Office for Recovery, Reconstruction and Resilience (COR3) and the Department of Housing for reconstruction funds (see other story on this page.


Regarding the potential cancellation of LUMA’s contract, Jorge Colberg Toro queried Public-Private Partnerships Authority Executive Director Fermín Fontanéz Gómez, who responded that the breaches that are in the original contract, not the supplementary one that is in force until the bankruptcy process is completed, have to occur during three consecutive years, a period that starts again from scratch if it is interrupted in some way.


“That is, we are all clear now about the reality that we have before us,” Colberg Toro said. “... We have to wait until we get out of bankruptcy for those specific provisions of the contract to come into effect.”

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Nov 25

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