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  • Writer's pictureThe San Juan Daily Star

PREB ordered LUMA to express their opinion on budget allocations sought by PREPA


The president of the Energy Bureau Edison Avilés Deliz in a panel last week at the UPR Law School about the Integrated Resource Plan.

By The Star Staff


The Puerto Rico Energy Bureau (PREB) ordered LUMA Energy, the private operator of the Puerto Rico Electric Power Authority’s (PREPA) transmission and distribution system, and Genera PR, the operator of PREPA’s power plants, to express their opinions on budget allocations sought by PREPA earlier this month, including the allocation of $150 million for pension system slated to become insolvent in May.


The request is a condition for PREB to decide whether or not to approve the budget changes.

In a March 14 motion to the PREB, PREPA addressed three key and critical issues related to its budget, including operations, repairs and maintenance works under the PREPA fiscal plan, ongoing transformation, and pension system continuance. PREPA asserted that the proposed amendment does not impact the energy sales rates and does not burden customers as it is based on revenues from reimbursed federal funds that PREPA had obtained during the present and past fiscal years.


PREPA’s March 14 motion requested $60 million for its operating and necessary maintenance expenses (NME) for $60 million, comprising $40 million for Generation NME and $20 million for operational expenses. The utility also sought $15 million to pay for GENERA PR, LLC (GENERA) Mobilization Fee and $29.4 million for a Voluntary Transition Program. Genera PR is slated to take over full control of the legacy power plants in July. The utility also sought $150 million to extend the pension system which is slated to become insolvent in May.


PREPA asserted that it initially requested of the Financial Oversight Management Board (FOMB) an amendment to its FY 2023 Budget for $60 million, to add $20 million to its operating budget and $40 million to its NME budget, however the FOMB directed that the amendment be submitted initially to the Energy Bureau. PREPA noted that the amendment was rejected by the Energy Bureau in a resolution and order issued February 27, 2023 conditionally approving the Fiscal Year 2023 Budget.


The PREB said in a resolution March 24 that it does not imply or provide implicit or explicit approval for the allocation of unrestricted FEMA reimbursement funds for any expenditures that have not received Energy Bureau approval.


The Energy Bureau then ordered PREPA to, within three business days of the issuance of the March 24 resolution and order, detail the expenditures and budget items that correspond to the $410 million FEMA reimbursements PREPA states were received during calendar year 2022 and 2023.


“PREPA shall identify any operational and/or necessary maintenance expenditures that were modified, canceled or postponed in order to complete the projects for which FEMA reimbursed PREPA. If any operational and/or necessary maintenance expenditures were modified, cancelled, or postponed indicate their status and if they are no longer required, explain why,” the order said.


The Energy Bureau also ordered LUMA Energy to, within three business days from the notification of the Resolution and Order, to express its position regarding PREPA’s March 14 Motion, including the requirement for LUMA to notify PREB of any budget amendments.


The Energy Bureau also ordered GENERA PR, within three business days from the notification of the PREB’s Resolution and Order, to share its position regarding the NME activities proposed by PREPA in the March 14 Motion.

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