LUMA CEO: No base rate hike being considered for coming fiscal year
By The Star Staff
LUMA Energy President and CEO Wayne Stensby said Tuesday he will not pursue an increase in the base rate for clients for fiscal year (FY) 2023.
“LUMA remains absolutely committed to staying within the overall budget,” Stensby said in a written statement. “LUMA is not requesting any increase to the base rate despite the historical infrastructure challenges the company inherited from the previous operator, and the continuing impact of years, if not decades, of mismanagement and neglect. In the third quarter, LUMA made it clear in its FY2023 budget that it has no plans to request an increase in the FY2023 base rate.”
LUMA Energy, the private operator of the Puerto Rico Electric Power Authority’s (PREPA) transmission and distribution (T&D) system, submitted its third quarterly report Tuesday to the Puerto Rico Energy Bureau (PREB).
“In our third quarter, our incredible team of more than 3,000 LUMA employee men and women continued to make real and measurable progress in transforming the electrical system throughout Puerto Rico,” Stensby added. “We are especially proud of our efforts and investment in training and safety to build a new generation of utility companies. These hardworking men and women, who call Puerto Rico home, are leading our efforts to improve our accountability for future storms and power outages, overcome legacy issues, achieve crucial long-term improvements to the electrical grid, provide world-class customer service and help power a clean energy future.”
The company has said before that it has no plans to increase rates. The firm reportedly expects to end the fiscal year in June with a $150 million deficit.
After the PREB approved a 3 cent hike per kilowatt-hour in the utility bill from April to June, LUMA submitted a proposed budget for the FY23 fiscal year that, he said, did not include a hike in the customer base-rate related to the operations of the T&D.
“The proposed budget will allow the more than 3,000 hard-working men and women at LUMA to continue building a more reliable, resilient and customer-focused energy system,” the utility said in a statement on April 1. “Also, a cleaner one for all of Puerto Rico -- without adversely impacting bills.”
Stensby said at the time that as part of its customer focus and the significant increase in generation fuel costs that have resulted in higher rates -- rate increases that are beyond LUMA’s control -- the utility will not pursue a hike in basic rates.
“Although LUMA does not generate energy, nor does it have any control over the impact that fuel costs have on customer rates, we do manage the costs associated with the operation of the transmission and distribution (T&D) system,” Stensby said. “As part of our commitment to our customers and recognizing the importance of operating as efficiently as possible, LUMA is not proposing any increase, nor any change in the base rate for fiscal year 2023.”
Given that the cost of fuel and power purchases from generators already accounts for more than 70% of the charges on customer bills, LUMA reiterated that it is committed to doing everything possible to continue working within its budgets in fiscal 2023 despite the legacy challenges the company continues to face.
More than half of LUMA’s annual program spending for 2023 will be related to system recovery and resiliency programs that will establish the necessary foundation to continue powering electric transformation throughout Puerto Rico, the company said.