Justice Dept. said to confirm legality of LUMA Energy contract

The Justice Department found that the contract with LUMA Energy is not contrary to law, morality or public order.

By The Star Staff

As Gov. Pedro Pierluisi Urrutia headed for Washington, D.C. to testify before a House committee on the island’s energy problems, the Justice Department issued an opinion Thursday declaring the legality of the LUMA Energy contract to operate Puerto Rico’s electric power transmission and distribution system.

The House Natural Resources Committee will hold a hearing today to discuss the reconstruction of the energy grid.

Meanwhile, Fermín Fontanés Gómez, executive director of the Public-Private Partnerships Authority (P3A), said Justice Secretary Domingo Emanuelli Hernández confirmed the legality of the operation and management agreement granted to the private consortium LUMA Energy.

The contract has been criticized because LUMA is not investing in the grid. As a result, all of the firm’s expenditures must be paid with public funds.

The Justice Department found that the contract is not contrary to law, morality or public order. Nor does the contract contain clauses or provisions contrary to the law, morality or public order.

“Consequently, we recognize that, from the reading and study of the law, the legislative background and the clauses of the O&M Agreement, there does not emerge, from its face, any patent element that could lead us to conclude that there are circumstances contrary to morality, law and public order in the contracting process carried out to establish the public-private partnership with LUMA,” a statement from P3A said, quoting from the opinion.

“On the contrary, we note that the process and subsequent contracting were carried out thoughtfully, taking care of every detail and with the intention and genuine purpose of having the highest public interests of Puerto Rico in mind,” the agency said.

From the documentation examined, Justice concluded that the selection of LUMA as a proponent and the subsequent signing of the O&M Agreement were in strict compliance with the P3 Law, public energy policy, and the requirements of the Financial Oversight and Management Board.

The Justice Department said it considered that the transformation of PREPA’s energy infrastructure is required by the island’s fiscal plan, and also considered the effect of the contract’s cancellation on the disbursement of funds for the grid’s reconstruction.