Energy Bureau to start rate review process

By The Star Staff

The Puerto Rico Energy Bureau (PREB) has issued an order that establishes the requirements and procedures for reviewing the rates of the Puerto Rico Electric Power Authority (PREPA) that will go into effect for the three-year period beginning on July 1 of this year.

LUMA Energy, the private operator of PREPA’s transmission and distribution system, is contractually responsible for preparing the rate filings and submitting them to the PREB. The PREB in turn is authorized to review and approve PREPA’s rates to ensure they are fair and reasonable, and consistent with sound fiscal and operational practices that provide reliable service at the lowest possible cost, as stated in the order dated Feb. 12.

The rate case will encompass all revenues, income and costs associated with providing electricity service in Puerto Rico. It will include revenue from customers, businesses that utilize the electrical infrastructure, state and federal government agencies, and any other sources. Additionally, it will cover all operational costs, as well as expenses related to storm resilience, restoration, repair, and modernization of PREPA-owned infrastructure.

The comprehensive approach is essential for current and future customers, government entities, industry stakeholders, and lenders to understand the true cost of electricity service. The order emphasizes that only with this full understanding can Puerto Rico prepare for a time when ongoing costs persist, but government assistance decreases.

According to PREPA bondholders, the funding necessary to maintain the grid, strengthen it against natural disasters, prevent blackouts, and meet financing obligations should dictate the rates -- not the reverse.

The new rates will apply to fiscal years 2026, 2027, and 2028.