Energy czar: Gov’t owes nothing to LUMA or Genera

Energy Czar Josué Colón Ortiz

By The Star Staff

Energy Czar Josué Colón Ortiz insisted on Sunday that the island government owes no money to private energy system operators LUMA Energy and Genera in response to claims by Genera that it is owed over $230 million in fuel fees.

“The government of Puerto Rico does not owe any amount of money to either private operator LUMA or to private operator Genera,” Colón Ortiz said at a news conference in La Fortaleza. “All payment of fees established in the contracts have been made faithfully. The letter made public is related to the contractual process of replenishing the service accounts, but the reality is that the Puerto Rico Electric Power Authority service accounts are filled with the proceeds from the work of the two operators because the truth is that PREPA is no longer in charge of producing, transmitting or distributing energy and billing clients.”

Genera PR warned PREPA in a letter that it has incurred a contractual “breach event” by delaying the transfer of funds to the fuel purchase account in April without, supposedly, taking actions to solve the deficiency in the stipulated time.

Although Thursday’s letter – which was published in another media outlet – does not indicate whether Genera PR would activate contractual remedies in situations of non-compliance – which can escalate to cancellation with just cause – the company stressed that it “expressly reserves all its rights, claims and remedies under the OMA [operation and maintenance agreement] under applicable law and principles of equity. Nothing in this letter should be construed as a waiver of those rights and remedies.”

Colón Ortiz said the way the contract is established is that PREPA delegated to the private operators the work it used to do. PREPA’s income comes from the sale of energy and the utility has no other income. Genera PR and LUMA Energy are supposed to charge the public for the energy provided.

“Our office wants all operations to continue so service is not interrupted. The two operators must fulfill their obligations and if that happens then the service accounts will be replenished,” the energy czar said. “That is a contractual process and it is not true that the government owes them money as part of the fees.”

He said PREPA and the private operators are continually engaged in a conciliation of the energy produced and paid to ensure the income from the sale is deposited in the PREPA accounts, which are the accounts used to pay the private operators.

Asked why the accounts did not have the money, Colón Ortiz said “the way I see it is that service must be continuous. So, it is important for us to have the capacity for demand.”

On Sunday, there was sufficient energy demand as PREPA had 1,300 megawatts in reserve.