Governor continues to defend LUMA Energy contract

Says agreement helps PR ‘obtain a better power service’

By Pedro Correa Henry

Twitter: @pete_r_correa

Special to The Star

Six days before the public-private agreement between the Puerto Rico Electric Power Authority (PREPA) and LUMA Energy to operate the energy utility’s transmission and distribution system takes effect, Gov. Pedro Pierluisi Urrutia continued to defend the contract on Tuesday, saying that “many falsehoods” have been stated about it.

During a press conference at the Department of Corrections and Rehabilitation in Hato Rey, Pierluisi said both the executive branch and the steering committee led by Secretary of State-designate Larry Seilhamer will continue to keep close watch on the private consortium once it begins to fully operate the island’s power grid.

“[LUMA] has already made some representations, gave some guarantees, for example, that it will reduce the number of power interruptions in Puerto Rico by 30%, that it will reduce the duration of interruptions by 40%, and that it will to lower the number of workplace accidents by 50%, those three are specific and we will be watching over it,” the governor said. “What we also want is to improve the treatment [of] and service for PREPA subscribers.”

“LUMA is a large consortium of two entities with a lot of reputation, which have very impressive resources, and now the ball is going to go into LUMA’s court,” Pierluisi added.

He said the public-private agreement will allow the island “to obtain a better electric power service.”

The governor said further that the consortium created by Quanta Services, ATCO and EIM is guaranteeing that it will be prepared for the next hurricane season “with its own resources, apart from those it has already contracted, and alliances it has with other electricity companies.”

“We are going to give it support, but we are going to oversee it because what we want, in the end, is for all of Puerto Rico to have better, more reliable, less expensive, more resilient electric service,” Pierluisi said.

At press time on Tuesday some 40,000 PREPA subscribers were without electricity due to scattered outages arising from a general lack of maintenance and, in some cases, slow response times on the part of repair crews.

Regarding LUMA Energy’s request for a complete waiver from all liability for its employees, agents and contractors for damages that come from the operation of the power grid, Pierluisi said the Puerto Rico Energy Bureau, which he called “a robust regulatory entity,” has the last word.

“If the waiver has to do with relieving LUMA of responsibilities by law and third-party proceedings, that is, of other people or entities, it makes sense to me,” Pierluisi said. “If it’s relieving LUMA from their own liabilities, that doesn’t sound good to me.”

“But what I ask of this regulatory entity is to evaluate the matter well, to look at what is being done in the States, outside of Puerto Rico, in this matter to see if there are similar waivers and what the justification is,” he added. “If the justification is to avoid a rise in the … electricity bill, let them evaluate it.”

Pierluisi gave assurances, meanwhile, that the authorities will investigate any effort to impede or interrupt electrical service.

“There are six days left for the change to come,” he said. “I am not going to assign responsibility, but I am going to say that in the future, anyone who interrupts essential government services is committing a crime and I will not hesitate to order an investigation and prosecution of anyone who interferes with essential government services, including in the energy area.”

“There is the jurisdiction of both state and federal law enforcement authorities,” the governor added. “So I expect all PREPA personnel and LUMA personnel to do their job for the good of the people because they simply cannot pay for other people’s sins.”

Meanwhile, when asked about 4,100 PREPA employees who have been transferred to positions in which they have never worked, the governor stated that “all the Authority’s personnel were guaranteed that they would keep their jobs, basically with the same pay and benefits, regardless of whether they work for LUMA or other government agencies.”

“Now, those who do not want to work at LUMA are going to be placed where they are needed because it has to be that way,” he said.

Pierluisi said he has been informed of around 150 jobs that have been filled by transferred PREPA workers and could require review.

“My commitment is that when there are particular situations that arise and if that location has to be reconsidered, it can be considered,” he said. “We will act with the greatest sensitivity, but the most important thing is that no one is going to lose their job.”

“Rest assured, if any of those relocations have to be reconsidered, they will be reconsidered for valid reasons,” the governor added.

Regarding the possibility that the LUMA Energy controversy would lead the Popular Democratic Party (PDP)-led House of Representatives to reject Seilhamer as State Department secretary, Pierluisi said using that argument as an impediment to his confirmation was not valid because the deal “was approved by all government entities before Seilhamer was appointed.”

“He must be evaluated on his merits and I would like someone with their head held high to be able to challenge his human quality or to challenge his credentials as a public servant,” the governor stated. “For that reason, within the circumstances, I am at peace because those who are looking terrible are those who dare to say that they would not confirm Larry Seilhamer for matters that have nothing to do with his ability and credentials to assume that important position.”

Pierluisi said it also does not make sense for House Speaker Rafael “Tatito” Hernández Montañez to link Seilhamer’s confirmation with amendments to the 2020 Electoral Code, a law that has been under scrutiny since the last general elections, “because not even PDP members agree on what they want to propose.”

“They must not tie one thing to another; it is totally improper. It is even unethical to tie a confirmation to other legislative matters that are or are not pending; it is as simple as that,” he said. “It would certainly be a failure of the entire legislative process, particularly in the House, if it [Seilhamer’s confirmation] is not given way; it would be very sad and would be called into question.”

“I would not wish that on anyone,” Pierluisi added.

The governor made his statements during an event where he signed five collaborative agreements with Corrections and Rehabilitation Secretary Ana Escobar Pabón and Acting Education Secretary Eliezer Ramos Parés to make it possible for inmates to participate in community and school maintenance projects.

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