Governor: We won’t keep paying more to LUMA Energy

Gov. Jenniffer González Colón

By The Star Staff

Gov. Jenniffer González Colón said Wednesday that her administration will not allocate additional funds to LUMA Energy following a letter from the consortium claiming that the government has failed to meet its payment obligations under the public-private contract for operating the electric power transmission and distribution system.

“No one has died by writing, right? They asked for $800 million, and I want to reduce that as well,” González Colón said at a press conference in Isabela for the groundbreaking on an apartment project for low-income families. “Everyone has their wishes in life. I believe the Government of Puerto Rico made a poor deal with LUMA. They claimed they could effectively carry out the reconstruction of the electrical system and that they had the expertise in managing federal funds, along with all the necessary qualifications, equipment and experience. The evidence suggests otherwise.”

LUMA Energy did not immediately respond to requests for comment.

The governor noted that her administration is holding meetings with the Financial Oversight and Management Board, the Office of Management and Budget, and the Fiscal Agency and Financial Advisory Authority to discuss payment issues related to the LUMA contract.

“Every month, we receive communications stating that they need money because they have spent more in certain areas,” González Colón said. “However, they are spending millions of dollars on hotels, equipment and salaries. Their operating model does not align with the budgetary reality of the business they were contracted to manage.”

Meanwhile, Víctor Parés Otero, who chairs the Government Committee in the island House of Representatives, ripped LUMA for having received only $300 million in federal reimbursements since 2020, despite having access to over $10 billion allocated by the Federal Emergency Management Agency (FEMA) for the reconstruction of the electrical system.

“LUMA Energy publicly stated that they need the government to grant them up to $800 million annually for repairing the electrical system, as well as up to $30 million for its maintenance,” the San Juan District 4 lawmaker said. “This is simply unacceptable.”

Parés pointed out that while LUMA has received over $3.2 billion from the Puerto Rico Electric Power Authority (PREPA), the amount of reimbursements it has obtained from FEMA is dramatically low compared to the $1.2 billion that PREPA has already received for similar purposes.

“It’s been $3.2 billion since mid-2020, and it’s only now, on April 21, that LUMA says it needs an additional $800 million each year to rebuild the system. In addition to being totally unacceptable, it’s an affront to the people,” Parés said. “They marketed themselves as experts in electrical reconstruction and in the process of disbursing federal funds, yet in Puerto Rico, they have proven the opposite.”

Parés added that LUMA committed in its contract to presenting reconstruction projects and obtaining the necessary reimbursements to carry out the work.

“LUMA’s letter is absurd,” he said. “How is it possible that PREPA has received more federal reimbursements in four years than LUMA? This demonstrates gross administrative inefficiency.”

The legislator emphasized that the contract with LUMA was promoted and approved in 2020 by the oversight board, at a time when the federal funds identified by González Colón, then the island’s resident commissioner in Congress, were already available.

“The fact that LUMA spent it on luxury hotels and parties, among other things, is not the responsibility of the people of Puerto Rico,” Parés said.