By The Star Staff
LUMA Energy External Relations Director José Pérez Vélez on Tuesday defended the company’s decision to request an increase of 2.9 cents per kilowatt-hour (kWh) in the utility bill for the last quarter of 2024, and it appears there will be more hike requests.
Pérez Vélez said the cost of the generation fuel used by power plant operator Genera PR during the months of June, July and August, a cost that is decided by international markets, was higher than expected.
The Financial Oversight and Management Board recently approved an amendment to the contract between Genera and Puerto Rico Energy LLC, a fuel supplier, that increases its maximum payable amount by close to $60 million.
The original contract, which the oversight board approved on Oct. 11, 2023, is for the supply of ultra-low sulfur diesel (ULSD) for the San Juan, Aguirre, Mayagüez, and Cambalache power generation plants, as well as the Vega Baja, Guayama, Ceiba, and Yabucoa gas turbines.
Under the original contract, the supplier sells and delivers ULSD in the quantities and time requested by Genera for the power plants and gas turbines. It had a maximum payable amount of $452 million and a term lasting up to one year from its date of execution on Nov. 17, 2023 to Nov.16, 2024, with the option to extend for an additional year.
The amendment increases the maximum payable amount by $58 million to $510 million without altering the term, due to a rise in projected fuel consumption.
The Puerto Rico Electric Power Authority (PREPA) certified that the increase is a pass-through expenditure with no budgetary impact, and that the funds to pay for the proposed amendment are unrestricted.
LUMA Energy, the private operator of the electric power transmission and distribution system, this week sought an increase in the electric energy bill of some 2.9 cents per kWh.
As part of the report submitted to the Puerto Rico Energy Bureau (PREB) for the quarterly fuel cost adjustment and power purchase adjustment factors in customer electric rates, LUMA said in a press release that “the cost of generation fuel used by Genera PR during the months of June, July, and August was higher than expected.”
“Those additional costs, along with the forecast for October-December, indicate an expected increase in the factors of approximately 2.9 cents per kilowatt-hour (kWh) on customer bills,” LUMA said. “The new factors for the last three months of 2024 are subject to review and final determination by the PREB.”
LUMA President & CEO Juan Saca had said in a written statement Monday afternoon that besides the increase in fuel costs, “generation problems continue to cause this increase.”
Saca also noted that the rate hike is necessitated by the island’s dependence on expensive fuels such as diesel and bunker fuel due to the lack of availability of plants that use natural gas. LUMA has said previously that it has no control over the aforementioned costs, since it is not responsible for the generation of electricity.
The bill adjustments cover only the cost of fuel and purchased energy; over 65% of customers’ bills go toward paying for these items, according to LUMA.
Nearly $4 million in energy assistance disbursed for low-income families
Also on Tuesday, Gov. Pedro Pierluisi Urrutia and Family Secretary Ciení Rodríguez Troche announced the disbursement of $3.9 million to help low-income families, participants in the Temporary Assistance Program for Needy Families, with the payment of their energy bills.
“This disbursement reaffirms our commitment to supporting the most vulnerable families in Puerto Rico,” Pierluisi said in a written statement.
The assistance will be provided under the Low-Income Home Energy Assistance Program (LIHEAP), which is administered by the Administration for Socioeconomic Development of Families (ADSEF by its acronym in Spanish). LIHEAP provides economic support to families below the poverty level to cover energy costs.
ADSEF Administrator Alberto Fradera Vázquez said the transfer of funds will take place today, and will be reflected in participants’ next energy bill.
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