La Fortaleza accuses fiscal board of favoring LUMA
Questions Energy Bureau’s approval of rate hikes
By THE STAR STAFF
La Fortaleza Public Affairs Secretary Jean Peña Payano accused the Financial Oversight and Management Board on Thursday of favoring LUMA Energy in the ongoing legal dispute over its contract.
He also questioned the Puerto Rico Energy Bureau (PREB) for authorizing increases in electricity bills, asserting that the regulatory body must be held accountable for those decisions.
“It does not surprise me that the Board is in favor of LUMA. It comes as no surprise,” Peña Payano said in response to questions from the press. “But I hope the public -- who are wise -- will see, as I have mentioned in other forums here at La Fortaleza, who is on the side of the people and who is on the side of LUMA.”
The remarks were made after the official was asked about a motion filed by the oversight board with the Supreme Court of Puerto Rico, requesting to appear as “amicus curiae” in the litigation concerning the validity of LUMA’s contract.
In its filing, the board defended the continued operation of the contractor, warning of potential operational and financial consequences for the electrical system should it be determined that the government has the authority to terminate the contract based on the arguments presented.
Peña Payano said the administration of Gov. Jenniffer González Colón remains committed to seeking LUMA’s departure, and he dismissed the warnings regarding the consequences of terminating the contract.
“LUMA will leave Puerto Rico, and Puerto Rico will keep running,” he said. “It’s not the end of the world. The world won’t stop turning just because LUMA leaves.”
The official reiterated that the government is evaluating other companies that could potentially take over the operation of the electric power transmission and distribution system, though he did not identify any specific firms or provide a timeline for a possible transition.
Regarding electricity rates, Peña Payano held the PREB responsible for authorizing increases, questioning the regulatory body’s decision to accept proposals from LUMA concerning service costs.
“I would expect the Puerto Rico Energy Bureau not to simply say ‘yes’ every time LUMA requests an increase; these increases are not the governor’s responsibility -- they are authorized by the Energy Bureau,” he said.
When asked whether the regulatory body errs in its evaluation of rate requests, he asserted that there must be accountability for its decisions.
“They certainly approved a recommendation put forward by LUMA,” Peña Payano noted, adding that the PREB is an independent entity that does not report directly to the executive branch.
Regarding the possibility of overseeing the PREB’s determinations, he suggested that it is up to the governor to evaluate alternatives within the legislative sphere.
“That is an assessment the governor must make at the legislative level […],” he said.
The controversy arose after LUMA notified the PREB of some $48 million in additional fuel costs incurred by power generation companies.
Previously, LUMA Energy President Jannice Quiñones maintained that this notification does not constitute a request for a rate increase, but rather the fulfillment of a contractual and regulatory obligation that applies when fuel costs exceed the budgeted amount by more than $20 million.
The company attributed the additional costs to limited generation availability, market conditions, and a controversy surrounding the supply of natural gas. It further indicated that it is up to the PREB to determine whether any rate adjustment is warranted. Peña Payano, however, insisted on holding LUMA accountable for its cost projections and questioned why consumers continue to face increases in their utility bills.
“LUMA now acknowledges that, due to errors in its diesel fuel procurement projections, another rate hike must be imposed on the public,” he said. “This has reached a breaking point.”
