LUMA seeks a 17% rate hike, cites rise in fuel costs
By The Star Staff
Citing the rise in the cost of fuel, LUMA Energy, the private operator of the Puerto Rico Electric Power Authority’s transmission and distribution system, requested on Wednesday an increase of 17.1% in the energy rate for the months of July, August and September 2022 and suggested government assistance programs for needy customers.
“The cost of electricity generation fuel in Puerto Rico has increased approximately 30% in the last quarter. This is obviously an alarming increase and is the main reason why the generation factors that we submitted to the Energy Bureau have increased,” said Mario Hurtado, that chief regulatory officer at LUMA Energy, at a press conference. “Based on these generation factors and others submitted to the Bureau, we estimate that, always depending on the final decision of the Energy Bureau in Puerto Rico, there would be a potential increase of 4 cents per kilowatt-hour in the rate and the total cost of the bill. A typical residential customer’s monthly rate would rise 17 percent.”
“It is important to remember that these adjustments are to be determined by the [Energy] Bureau and any estimate is subject to its final decision,” he added. “We know that these changes would be very impactful to all of our customers.”
The increase represents a gain of 4.955 cents per kilowatt-hour (KWh). LUMA’s request means the cost per KWh will rise from 29.04 cents per KWh to 33.99 cents.
To tackle the proposed hike, LUMA suggested the use of government assistance programs for customers who qualify. In addition, they offered agreed payment plans, among other remedies. It was mentioned that there are currently 10,000 payment agreements for the 1.5 million customers. In addition, there was talk of special rates for people 65 years of age or older, university students and clients with certain medical conditions.
The proposed 17 percent rate hike requested by LUMA Energy is “a joke in poor taste and a lack of respect for the country,” that should be repudiated by all sectors, Popular Democratic Party (PDP) Secretary General Ramón Luis Cruz Burgos said.
“At a time when there have been more consecutive blackouts throughout the island, the cost of gasoline is in the clouds, inflation is at levels never seen before as well as the cost of living, LUMA proposes a rate hike,” Cruz Burgos said in a written statement. “With the poor service they offer, what they deserve is to have their budget reduced.”
The legislator added that “if another increase in electricity is approved, citizens will have no alternative but to go to the streets to demand their rights in the face of the lousy administration of an inefficient private company.”
“They have not started a single project to restructure the electrical system, we have more blackouts and electricity is more expensive,” the PDP official said. “Without a doubt, this is the worst legacy of [Governor] Pierluisi, who instead of governing for the people, has become the defense attorney for LUMA.”
Gov. Pedro Pierluisi Urrutia urged the Legislature later on Wednesday to approve a bill that could stop LUMA Energy from implementing rate hikes.
“Our bill is before the Legislature to achieve relief in the cost of electricity by providing surplus funds from the State Insurance Fund to PREPA,” Pierluisi said in a statement broadcast on his social networks. “We ask legislators to take it up with the sense of urgency that our people deserve to avoid or mitigate another increase in fuel purchases as a result of the rise in the cost of oil.”
Legislative leaders had not yet expressed themselves on the matter as of press time on Wednesday.