Governor: PREB electricity price hike comes from oil price readjustments
By Pedro Correa Henry
Special to The Star
Although Gov. Pedro Pierluisi Urrutia considered it “inconceivable” to talk about an electricity price increase during his campaign last year, he is defending the Puerto Rico Energy Bureau’s (PREB) power rate readjustment to 0.81 cents per kilowatt-hour, which could hike Puerto Rico Electric Power Authority (PREPA) subscribers’ bills by 4.7%.
The readjustment, the governor said Thursday, “arises as a consequence that the cost of a barrel of oil has been rising.”
While reaffirming that he is not endorsing any increase due to “inefficiencies or administrative failures at PREPA,” Pierluisi said the increase authorized by the PREB on Dec. 31 comes from an evaluation that the regulator conducts from information submitted by PREPA in regard to fuel and power purchase reconciliations every three months.
Pierluisi also said “the Bureau’s processes are public, as well as the resolutions and orders it files, complying with the transparency required by law,” amid complaints being raised that the increase only became known as early as Tuesday.
“Puerto Rico Energy Public Policy Act 17-2019 establishes that our main goal is to transform our electrical grid so that we reduce our dependence on fossil fuels whose costs we cannot control and are harmful to the environment,” Pierluisi said in a written statement. “PREPA’s transformation is essential to achieving that goal. At the same time, Act 57-2014 created the Puerto Rico Energy Bureau as an independent entity to regulate, supervise, and enforce the energy public policy of the Government of Puerto Rico.”
“We will rebuild and transform our electrical grid so that we are not held hostage to fluctuations in fossil fuel prices that create instability,” the governor added. “We will move to clean, renewable energy, so we can stabilize our energy costs.”
Meanwhile, Popular Democratic Party (PDP) District 12 Rep. Edgardo Feliciano called the electricity price hike “unacceptable” as islanders face unemployment and other challenges due to the coronavirus pandemic.
“In the towns of Manatí, Vega Baja, Vega Alta, and Morovis, our small and medium-sized businesses have suffered the ravages of partial closures and increased operational costs in order to operate in compliance with the health requirements established by the state,” Feliciano said.
For his part, Deputy House Speaker José “Conny” Varela said the price hike is “extremely onerous and untimely in the midst of the deep economic and fiscal crisis that the country has been experiencing for the past few years and that was deepened by the passage of hurricanes Irma and Maria in 2017, the earthquakes of January 2020, and the state of emergency proclaimed [in response to] the COVID-19 pandemic.”
“This also makes it more pressing to move forward with the LUMA Energy contract investigation,” Varela said.
Dignity Project Rep. Lisie Janet Burgos Muñiz, meanwhile, said the PREB should have released such a determination via press release as “Puerto Rico demands transparency.”
“While many do not have enough to eat and pay the rent due to the economic crisis we are going through, we will have an outrageous increase in the new bill,” Burgos Muñiz said. “We, in the House, will be conducting an investigation into this matter.”
PDP District 10 Rep. Deborah Soto Arroyo said the island’s economic condition is “not in a place to put a new burden on all Puerto Ricans.”
“As a representative of the town of Toa Baja, where the population below the poverty level is approximately 38%, this increase is unacceptable,” she said.
PREPA T&D crews respond to power outage
Although citizens might think that an increase in electricity rates would go hand in hand with improvements in services, that was not the case Thursday as 38,000 PREPA subscribers faced a sudden power outage in the morning due to an “isolated breakdown due to [transmission] line fatigue.”
PREPA Transmission and Distribution (T&D) Technical Operations Director Carlos Alvarado said a breakdown located at the transmission center in Sabana Llana, near Plaza Carolina, led the Monacillos, Conquistador, and Encantada stations to protect themselves, leaving metropolitan citizens and businesses without power.
“They got their power back around 9 a.m,” Alvarado said.
When the STAR asked if PREPA has a contingency plan running amid the recent price hike and other challenges that the authority faces, such as the next hurricane season and the LUMA Energy T&D deal, Alvarado said the authority has been “coordinating a series of plans” to involve PREPA personnel and private enterprises to maintain and unhook T&D lines, get rid of rejected utility poles and address public safety issues.
“[Challenges with mitigation actions] have nothing to do with contracts or the LUMA concession,” he said. “For years, we have faced reduction in technical staff, such as power line guards, crane drivers, mowers, unhooking officers, and people who have resigned or retired from the authority.”
Alvarado added that recruiting replacements for the aforementioned positions requires special training.