Torres Placa urges gov’t to soften impact of new electricity rate hike
Sector regulator approves smaller‑than‑requested fuel charge
By THE STAR STAFF
Tomás Torres Placa, an engineer and former consumer representative on the Puerto Rico Electric Power Authority (PREPA) governing board, warned on Thursday that the government has the ability to reduce the blow of the latest increase in the island’s electricity bill -- an adjustment driven in part by fuel‑cost pressures and approved this week by the Puerto Rico Energy Bureau (PREB).
Torres Placa’s remarks came as a new residential rate -- close to 34 cents per kilowatt-hour (kWh) -- took effect on Oct. 1. In a radio interview with WKAQ, he said the PREB’s determination must be respected, but stressed that La Fortaleza could intervene through a special allocation to partially offset the increase.
“It can be mitigated,” he insisted, noting that a targeted appropriation could bring the rate closer to 30 cents per kWh.
His comments coincided with the PREB’s release of a 13‑page resolution adjusting the Fuel Cost Adjustment (FCA) for the October-December quarter. The regulator approved a 5.9506‑cent increase per kWh, smaller than the 6.6666‑cent rise requested by grid operator LUMA Energy. LUMA had proposed raising the FCA from 11.4070 to 18.0736 cents per kWh, citing higher global fuel prices, outages at base‑load units, and shortages of natural gas. The PREB instead set the FCA at 17.3576 cents per kWh, trimming roughly one cent per kWh from the request.
A key reason for the reduction is the PREB’s decision to defer $17.6 million in costs tied to deficiencies in natural‑gas deliveries attributed to New Fortress Energy (NFE). The PREB said those charges remain under dispute and should not be passed to customers until the contractual claims are resolved. The order notes that the deferral “does not constitute a recognition or approval of the costs incurred,” emphasizing that only justified and reasonable costs should be recovered through rates.
Torres Placa pointed to the same issue, noting that part of the pressure on the residential rate stems from tens of millions of dollars in diesel purchases that became necessary when contracted natural‑gas deliveries failed to materialize. He recalled that in 2022 the government used about $70 million in federal funds to mitigate a previous rate increase and argued that a similar measure could be deployed now.
Torres Placa cautioned that a rate near 34 cents per kWh affects not only residential customers but also businesses and the broader economy. He argued that government intervention could help stabilize costs while the PREB continues its regulatory review of fuel procurement and natural‑gas supply disputes.
The PREB further announced a full audit of natural‑gas supply contracts, deliveries, credits and payments, including whether Genera PR properly mitigated “Excess Nominations” -- gas volumes ordered but not used -- such as the $19.17 million incurred in June and July at San Juan Units 5 and 6.
In addition to the FCA, the PREB approved reconciliations for the Purchase Power Charge (PPCA), resulting in a $2.48 million credit to customers, and confirmed a $131.6 million reconciliation for fuel costs incurred between June and August.
The PREB also ordered PREPA and the Public‑Private Partnerships Authority to retain any amounts that could be offset or deducted from payments to NFE due to supply deficiencies -- starting with the $17.6 million deferred this quarter.
The PREB’s resolution also rejected LUMA’s attempt to begin charging customers for bad debt, noting that the methodology for calculating that component has not yet been established.
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