• The Star Staff

Governor on union vows to battle LUMA contract: ‘I am not intimidated by threats’


By The Star Staff


Gov. Pedro Pierluisi Urrutia said Wednesday that he is not intimidated by “threats” and has not changed his stance on the controversial privatization contract given to LUMA Energy to take over the Puerto Rico Electric Power Authority’s (PREPA) transmission and distribution (T&D) system and other operations starting in June.


Pierlusi disputed claims that he had said in the past that he was going to cancel the 15-year contract awarded last June to LUMA Energy, a subsidiary created by LUMA Quanta Services Inc., the Canadian firm ATCO Ltd., and IEM in January 2020, barely six months before it was awarded the contract.


“I have always been clear from the start in saying that the contract was going to be reviewed and, if needed, amended. I never said I was going to cancel the contract. So please stop saying that I changed my mind about the contract,” he said, referring to remarks made by leaders of the Electrical Industry and Irrigation Workers Union (UTIER), which represents most PREPA workers. “My position on the contract has always been the same.”


Pierluisi created a steering committee to oversee the contract. The committee can make recommendations but, so far, it has not made any. Some sectors and two of PREPA’s board members have said LUMA’s takeover should be postponed until January, in part because the consortium has not hired any PREPA workers.


Secretary of State-designate Larry Seilhamer, the head of the steering committee, acknowledged in public hearings that he has not read the LUMA Energy contract.


The governor also said he was not going to be intimidated by threats, in reference to calls made by PREPA workers to the effect that they will go to battle against the contract.

“I am not intimidated by threats no matter where they come from,” he said.


UTIER President Ángel Figueroa Jaramillo said at public hearings earlier this week that LUMA has not made a job offer to any PREPA workers even though the contract is slated to take effect June 1. PREPA has 5,000 employees, of which 4,000 work in T&D and other areas that LUMA will manage. LUMA had as of Feb. 27 received some 1,000 job applications from PREPA workers, while having received some 9,000 applications from outside PREPA.


Figueroa Jaramillo has also said that workers who choose to work for LUMA must start fresh and lose all seniority benefits, contrary to the wording of Act 120 of 2018, which states that no workers will lose any benefits under the collective bargaining agreement.


In the hearings, Figueroa Jaramillo demanded that the island House of Representatives cancel the contract with LUMA Energy, arguing that it goes against the island’s public order and is too costly.


“LUMA Energy will not be responsible to the people of Puerto Rico and will not guarantee anything in exchange for its fees,” the union leader said. “Because it is a private entity, it will make public policy decisions and handle the $14 billion in federal funds that will be allocated to Puerto Rico at its own discretion and convenience.”


As part of the privatization contract, bankrupt PREPA will pay LUMA a fixed annual compensation that will start at $70 million the first year, increase to $90 million the second, and to $100 million the third year. In the fourth year and for the remainder of the 15-year agreement, the annual payment to the operator will be $105 million, but if the operator meets certain metrics and yields certain savings, payments could reach $125 million per year.

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