LUMA proposes up to $3.45 million in investments through 2028

LUMA Energy President & CEO Juan Saca

By THE STAR STAFF

In response to a Puerto Rico Energy Bureau (PREB) request, LUMA has submitted two investment plans for the island’s transmission and distribution (T&D) system.

If approved, the plans would represent the largest investment in Puerto Rico’s energy system in decades, addressing years of neglect and underinvestment from the previous operator, LUMA said. The two proposals, the “Optimal” and “Constrained” budgets, would mark LUMA’s first rate changes since 2021, the private operator said in a statement.

“Providing Puerto Rico’s 1.5 million customers with reliable and resilient energy requires significant investment,” LUMA Energy President & CEO Juan Saca said. “LUMA does not financially benefit from these plans; every dollar goes to enhancing our customers’ service and the future of Puerto Rico.”

LUMA emphasized that the proposed rate case does not offer any financial gain for the company. Instead, the investment aims to strengthen Puerto Rico’s energy infrastructure, addressing immediate operational needs while maximizing federal funding.

LUMA presented two types of budgets to carry out the investments.

The Optimal Budget is designed to meet all T&D system needs, improving reliability and resiliency to achieve PREB’s performance targets within five years. It demands $3.45 billion in investments from 2025 to 2028, leading to a projected 14% reduction in outage duration and a 12% decrease in outage frequency, preventing 240 million customer interruption minutes.

Conversely, the Constrained Budget proposes targeted improvements with $2.30 billion in investments over the same period. While it could reduce outage duration by 9% and frequency by 8%, it would not effectively address the broader needs of the grid.

To fund the proposed T&D system improvements, LUMA’s proposed plan would increase the average monthly residential bill by $19.16, or less than 63 cents a day. Rate changes would come into effect starting in September or October 2025, if approved by the PREB.

“These investment plans are not about LUMA: this is about investing in a better energy future for Puerto Ricans and Puerto Rico,” Saca said. “To be clear, neither LUMA, nor our parent companies, profit from these investments. Every cent from customer rates gets invested back into Puerto Rico’s energy system. That’s why we have proposed a fiscally responsible plan that provides the PREB with options that contribute to the ideal energy future we must build together. We believe that this level of investment, along with the critical investments by FEMA [the Federal Emergency Management Agency], will help end the era of frustration that has plagued Puerto Rico for far too long, and will reverse a historical legacy of underfunding and financial and operational neglect.”

The PREB will thoroughly evaluate the plans before making a decision on any rate adjustments.