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  • Writer's pictureThe San Juan Daily Star

LUMA presents $1.2 billion budget for FY 2023

LUMA Energy President & CEO Wayne Stensby

By The Star Staff

LUMA Energy, the private consortium in charge of the Puerto Rico Electric Power Authority’s transmission and distribution (T&D) system, has filed with the Puerto Rico Energy Bureau (PREB) a $1.2 billion annual budget for fiscal year 2023 whose priorities include improving service and supporting the installation of renewable energy systems.

LUMA, a subsidiary formed by ATCO company and Quanta Services, officially took over the full control of PREPA’s T&D on June 2021 after a one-year transition period as part of a 15-year contract. Its initial budget submitted to the PREB in June 2021 was about $1.18 billion and in February of this year, the company reported that it expected to end the current fiscal year (FY) on June 30 with a $28 million deficit.

Of the budget amount, about $627 million will reportedly go to LUMA Energy and $580 million will be for the Puerto Rico Electric Power Authority; the latter amount includes payment for bankruptcy expenditures.

Following the PREB’s recent approval of a 3 cent hike per kilowatt-hour in the utility bill from April to June, LUMA said the proposed budget does 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 private grid operator said in a statement on Friday. “Also, a cleaner one for all of Puerto Rico -- without adversely impacting bills.”

LUMA President & CEO Wayne Stensby said 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, he noted -- the T&D operator 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 said it is committed to doing everything possible to continue working within its budgets in FY 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 electricity service transformation throughout Puerto Rico, the grid operator said in its statement.

The key budget priorities include: the repair and replacement of poles, public lighting, feeders and substations; improvements in customer experience; and vegetation management strengthening.

“LUMA is bringing specialized teams to Puerto Rico to continue easement remediation work and proactive vegetation removal, in addition to vegetation trimming in support of power outage responses,” the operator said.

LUMA also announced it will be supporting the integration of more than 800 megawatts (MW) of new utility-scale solar energy resulting from the request for proposals process approved by the PREB, and coordinating the expansion of utility-scale wind and solar installations of existing contracts to add 175 MW in the short term.

“LUMA is developing the next Integrated Resource Plan and collaborating with the U.S. Department of Energy’s PR100 initiative,” the private utility said. “LUMA will also initiate and continue to offer new programs, projects and services that support the clean energy transition, including net energy metering, energy efficiency, demand response and electric vehicles, as well as advancing studies on planning to optimize existing and new resources.”

The budget will also focus on investment in safety and proper worker training and on the use of new and emerging technologies, including the installation of advanced measurement and monitoring systems, implementing new customer communication protocols, and enabling distribution automation to improve the quality and reliability of the electricity grid, reduce losses and increase the accommodation capacity for distributed renewable energies, the statement said.

“Although LUMA has already made significant improvements to the transmission and distribution system in its first year of operations, with each passing year it is improving preparation and power restoration for potential storms and other emergencies,” LUMA said. “We are continually improving plans, expanding worker training, and strengthening coordination with relevant agencies and communication with customers.”

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