Energy czar rejects claims of a hidden rate hike.

Energy Czar Josué Colón Ortiz

By THE STAR STAFF

Josué Colón Ortiz, the island’s energy czar, is rejecting claims that a decision this week by the Puerto Rico Energy Bureau (PREB) amounts to a hidden electricity rate increase, insisting instead that the measure represents a redistribution of costs intended to ensure fairness across the system.

Responding to questions from the press about whether the PREB’s Resolution and Order was effectively a rate hike, the energy czar said he supported the decision and denied that consumers are paying more per kilowatt-hour.

“No, look, I don’t think that’s the case,” Colón Ortiz said. “I agree with what the Energy Bureau did in its Resolution and Order.”

He noted that the government has an obligation to allocate the electrical system’s fixed costs among all customers who are connected to and benefit from the grid, regardless of how much energy they consume or whether they generate power through renewable systems such as rooftop solar.

“I believe that part of the government’s obligations is to distribute the system’s fixed costs among all customers connected to and benefiting from the system, which must be maintained and improved,” he said. “All of that is part of being connected to an electrical grid.”

The energy czar said the PREB’s decision corrected what he characterized as an inequitable distribution of costs under the previous rate structure. He emphasized that the price per kilowatt-hour did not increase, but that fixed charges were adjusted to better reflect the cost of maintaining a multi-billion-dollar electrical infrastructure.

“What happened was a redistribution of energy costs among all subscribers, whether they are connected via solar panels -- net metering -- or other renewable systems,” Colón Ortiz said. “If this redistribution was not previously equitable, the government addressed that. We believe that’s correct.”

He added that some customers had been paying a fixed charge of only four dollars despite being connected to and relying on an extensive and costly power system.

“The reality is that the price per kilowatt-hour remained the same as before,” he said.

The decision, however, has drawn sharp criticism from the Puerto Rico Solar Energy and Storage Association (SESA), which on Thursday formally rejected the modification to the rate structure. The organization argued that increasing fixed charges while lowering consumption-based charges is regressive, contradicts Puerto Rico’s public energy policy, and harms consumers -- particularly those with lower incomes.

“SESA opposes any increase in the base charge,” said Javier Rúa Jovet, the organization’s public policy director. “This type of rate change raises serious legal and public policy concerns, particularly due to its disproportionate impact on lower-income customers.”

SESA warned that higher fixed charges impact customers regardless of how much electricity they consume, placing a heavier financial burden on households that use less power and limiting consumers’ ability to manage their bills through conservation or energy efficiency.

The association also argued that Puerto Rico’s legal framework is designed to protect consumers from regressive rate changes, asserting that flat fixed fees inherently benefit higher-consumption customers while penalizing those who consume the least.

“This is, by definition, a regressive policy,” Rúa Jovet said. “It penalizes those who consume the least and limits households’ ability to control their electricity bill through efficiency and conservation measures.”

The PREB’s decision comes amid ongoing debate over how to fairly allocate the costs of maintaining Puerto Rico’s aging electrical grid while encouraging the adoption of renewable energy and protecting vulnerable consumers. At the center of the disagreement is whether fixed charges should play a larger role in electricity bills, particularly as more customers adopt solar and other distributed energy systems.

On Wednesday, the PREB issued a resolution that redistributes how electrical system costs are recovered. While a general rate increase was denied, the new structure includes a pension charge in the base rate, which will impact some customers. The pension fee was separate.

The redistribution specifically impacts “prosumers” (customers with solar panels under net metering), who may see changes in how they are billed for their connection to the grid.

The PREB indicated that a typical residential customer consuming 800 kilowatt-hours should see a reduction in the base component of their bill despite the changes. Broader permanent electricity price increases originally proposed have reportedly been postponed until July of this year.