Governor: It’s up to LUMA whether it stays if PREPA debt restructuring doesn’t advance
By The Star Staff
Gov. Pedro Pierluisi Urrutia said Monday that LUMA Energy is the one that must decide whether to stay on as manager of the Puerto Rico Electric Power Authority’s (PREPA) transmission and distribution (T&D) system if, by Nov. 30, it is not possible to restructure the utility’s debt.
“That agreement expires on its own terms,” the governor said in response to questions from the press. “There is a termination clause in the 15-year contract that allows LUMA to rescind or cancel the contract because the bankruptcy has not ended, so we will have to see what the next step is.”
Pierluisi said there might be a transition and possibly a penalty payment. While this is happening, the private consortium is still on probation, he said.
“As of November 30 we will see where the process of the Title 3 [bankruptcy] is; it will be announced if some type of agreement has been reached with a large group of creditors of the Electric Power Authority, and LUMA will consider that when deciding whether to exercise that termination clause,” the governor said.
Pierluisi noted that if mediation to restructure PREPA’s debt cannot be achieved by Nov. 30, LUMA Energy can demand the end of the supplementary contract, be paid for the services provided, or pay a fine for noncompliance.
PREPA has been in bankruptcy since 2017 to restructure some $9 billion in debt. LUMA Energy took over control of PREPA’s T&D system in the summer of 2021 after a one-year transition period.