LUMA Energy: Proposed PREPA budget could cause hike in basic rate
By The Star Staff
LUMA Energy President & CEO Wayne Stensby came out on Wednesday against the budget earmarked for the Puerto Rico Electric Power Authority (PREPA) because it could cause a hike in the basic rate.
PREPA wants a higher budget for fiscal year 2023, which starts July 1, but LUMA opposes giving the public corporation more money.
“As part of our commitment to fiscal responsibility, LUMA has made it clear to its customers that it will continue to operate efficiently, stay within its prescribed budget, and that it has not and will not increase customers’ base rate,” Stensby said in a written statement. “Given the economic problems that many Puerto Ricans are facing, we urge PREPA to take all necessary measures to protect our customers and not expect them to pay even more.”
Also on Wednesday, LUMA proposed a 17% temporary rate hike for the months of July, August and September, citing fuel expenses.
“We will continue to work with PREPA, but we do not agree with a significant increase in its budget that is not based on operational reality and that could lead to an additional increase in customer rates,” Stensby said. “Instead, the budget that was presented to the Puerto Rico Energy Bureau for review is responsible and provides PREPA and LUMA with the resources to continue the hard work of transforming Puerto Rico’s electrical system.”
For the past week, LUMA and PREPA have been at odds over the power authority’s budget, which must be approved by the Energy Bureau (PREB), which has convened a hearing for Friday because of the dispute. PREB Chairman Edison Avilés Deliz said that if neither entity agrees on the budget, the regulator will decide.
According to the documents submitted by LUMA Energy to the PREB, the suggested budget to operate the electricity transmission and distribution system during the next fiscal year that starts in July is $571.6 million, while the current budget is $524.8 million, an increase of $46.8 million.
The increase would come from the cut that LUMA proposes in the budget allocated to capital works with government funds.
LUMA is proposing an allocation of $294.2 million instead of the current budget of $288.1 million for PREPA, which is in charge of the legacy power plants. That is the equivalent to an increase of $6.1 million. However, PREPA wants $100 million more.
The total consolidated budget is $1.7 billion, a number that includes federal funds.