• The San Juan Daily Star

Manufacturers take LUMA Energy to task over project labor agreements

Puerto Rico Manufacturers Association Vice President Yandia Pérez

By The Star Staff

The Puerto Rico Manufacturers Association (AIPR by its Spanish initials) demanded on Tuesday that LUMA Energy stop requiring local contractors working on energy projects to sign a “project labor agreement” that increases their construction costs and overhead.

LUMA Energy, the professional organization said, is requiring contractors, suppliers and related businesses to sign a mandatory labor agreement for projects, known as a project labor agreement (PLA), which is conditional on a collective bargaining agreement with a labor union in the mainland, the IBEW Union.

“The [AIPR] will not rest until the abuse of consumer, industry and country confidence is ended,” said AIPR Vice President Yandia Pérez.

The labor agreement would require contractors to pay high amounts in salaries to energy workers.

The PLA brings immediate impacts on the costs of construction projects, which will cause fewer projects to be carried out with the allocated funds, the AIPR said. In addition, it will cause a cascade effect that will increase costs to consumers and other key sectors of the Puerto Rico economy such as services and manufacturing.

“This labor agreement is a breach of trust against consumers, the industry, and the country,” Pérez said. “This decision not only directly affects the consumer, and the key sectors of Puerto Rico’s economy, but also takes us away from the opportunities to rebuild Puerto Rico’s energy system, undermining the economic and environmental development of our island, since it would lead to an increase in the price of energy, in the projects and reconstruction services of the Electric Power Authority and in private renewable energy work.”

Pérez pointed out that the way in which LUMA has tried to implement the PLA makes it clear that there is no transparency in its processes, “which makes us lose confidence in LUMA since, for the second time, contracting processes are carried out without visibility for the consumer and are inconsistent with the due process that governs contracting with the PR government.”

Pérez said “our position is that the processes must be carried out in a transparent way in order to create a resilient energy system at an affordable cost for the consumer.”

“In the times that we are living, with a vexing energy crisis without precise information on the problems, solutions and impact for consumers, it is concerning that LUMA is focusing at this time on bringing to the system a process of unilaterally implementing a PLA without the participation of the affected, without analyzing its economic impact and the final cost that this will represent for Puerto Ricans,” she said.

The AIPR official said the organization has been patiently asking the leadership of LUMA, since it arrived in Puerto Rico, to focus its efforts on working with the industry and the consumer to repair the lack of trust created by its selection by the Public-Private Partnerships Authority without citizen participation.

“Now we ask the owners of LUMA to cease and desist from any type of PLA for the maintenance and reconstruction of PREPA behind the backs of consumers and without having made any economic impact studies and without following the best governance practices by companies, which govern any public service corporation focused on the consumer and the betterment of the communities it serves,” Pérez said. “We invite you to sit up front so that we can seek a solution that allows us to achieve a reliable electrical system, maximizing the use of federal funds granted competitively and contributing to sustainable economic development where there is true energy justice for all of us who live in Puerto Rico.”

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