Regulator seeks plan from LUMA for quick-start energy program

During an April 24 technical conference, LUMA stated that it is expecting more than 90 generation shortfall load shed events from May 1 to Oct. 31, lasting an average of 5.5 hours each.

By The Star Staff

The Puerto Rico Energy Bureau (PREB) has ordered LUMA Energy to submit a filing no later than May 8 detailing its proposed quick-start Demand Response (DR) programs for the coming summer months, when a high percentage of outages are expected.

During an April 24 technical conference, LUMA stated that it is expecting more than 90 generation shortfall load shed events from May 1 to Oct. 31, lasting an average of 5.5 hours each. Factors such as a hurricane, a hotter than usual summer, heat wave, or generation unit failure could cause additional load shed events, noted the private operator of the Puerto Rico Electric Power Authority’s transmission and distribution system.

Given the emergency, LUMA stated it is exploring several quick-start or expanded DR programs, including rapid expansion of the Customer Battery Energy Sharing Program Expansion (CBES) program for this summer, the use of backup generation for load reduction, and the potential for cogeneration (combined heat and per) demand response, according to a motion dated April 30. It also said it may pay large businesses to reduce their grid demand, in a program it calls Backup Generation Demand Response.

The PREB said LUMA should include in the submission its proposal for the CBES and Emergency Load Reduction Program and should address the topics brought up by stakeholders, the PREB, and its consultants during the technical conference. Additionally, LUMA should clearly state what actions it is requesting from the PREB.

LUMA presented its proposal to rapidly expand the CBES program for summer 2025 by auto-enrolling customers in the program. But the PREB said LUMA should provide in its filing an estimate of the total installed battery capacity and an estimate of the total firm capacity expected for summer 2025, including any associated “derating” assumptions LUMA used, such as percentage of battery customers eligible for participation, percentage of battery capacity they are enrolling in the program and expected participation rates in events.

In a recent technical hearing LUMA discussed its Backup Generation Demand Response program, which would pay large industrial and commercial customers to temporarily reduce their grid demand by shifting their load to backup generators in the case of an emergency grid event.

LUMA stated it is working to address air quality permitting barriers and is fine tuning other administrative procedures to launch by June 1. The PREB noted that the Regulation for Demand Response does not allow for the use of combustion fossil fuel generators except for in case of emergency. Therefore, the regulator said, LUMA should clearly explain in its filing its strategy for dispatching back-up generators in compliance with this regulation.

LUMA stated it is budgeting $8.2 million for the back-up generation program. The PREB said LUMA in its proposal should provide further support for that budget (including LUMA’s expectation for the participant compensation structure), the timing of how it proposes to collect the funds given the uncertainty around the program’s feasibility, and greater detail around the timing of program launch.