UTIER urges citizens to sign online petition rejecting PREPA-LUMA deal
By The Star Staff
The Electrical Industry and Irrigation Workers Union (UTIER by its Spanish acronym) is urging the public to sign an online petition rejecting the 15-year contract between the Puerto Rico Electric Power Authority (PREPA) and its private operator LUMA Energy LLC to manage the utility’s transmission and distribution (T&D) system.
As of Sunday, the online petition with change.org had almost 3,000 signatures of the 5,000 needed.
“We hereby declare an utmost rejection of the contract and request its cancellation,” the petition reads. “The contract, in addition to opening the door to a private monopoly, makes the country’s electricity service more expensive, does not respect or value PREPA workers and employees and perpetuates the centralized and polluting model that is vulnerable to atmospheric and seismic events.”
On June 22, PREPA entered into a 15-year agreement in which LUMA Energy will manage its T&D for a service fee and incentive fees payable to the company after achieving certain performance milestones. The fixed fee starts at $70 million in the first year and increases to $105 million for years four through 15, but the company will be paid additional money as incentives to achieve certain milestones that increase payments to $125 million per year. The contract requires the reorganization of PREPA into two operating companies. One is GridCo, which will retain ownership of the T&D system, and the other is GenCo, which will own PREPA’s generation assets. LUMA will also be in charge of certain administrative aspects such as customer service.
“LUMA would not only manage the transmission and distribution system, it would also have the power to decide on power generation, fees, and system planning,” the petition states.
“This contract, which lacks cost-benefit studies, is bad business for the country since it allows LUMA to charge up to $125 million annually without having to invest even $1 in the electricity system.”
LUMA Energy was tasked with the job of administering and adjudicating $18 billion in federal reconstruction funds, in which its affiliates will play a significant role. The contract also authorizes LUMA Energy to seek rate adjustments and budget changes.
“Any project or contract that perpetuates a centralized system, which requires the burning of fossil fuels to survive, is a project or contract that is intended to delay the path to distributed renewable energy and to fulfill the renewable energy objectives outlined in Law 17-2019, the Energy Public Policy,” the union said in its petition. “The rate increase contemplated in the contract becomes an unsustainable burden for the Puerto Rican family and a deterrent to the country’s economic recovery.”
UTIER said the contract was awarded behind closed doors, excluding the participation of PREPA union groups and citizens, and that it only benefits companies whose sole purpose is to obtain federal funds to satisfy their own interests.
The contract will also allow LUMA Energy to decide which PREPA workers to hire, which goes against current law that ensures jobs of public workers are protected as part of a public-private partnership.
“Contrary to LUMA’s propaganda, this transaction does not guarantee the rights of PREPA workers or employees, and on the contrary, leaves them exposed to losing their jobs and acquired benefits,” the union said. “It is these workers and employees who, without the support of PREPA’s managers, have raised the system back up after hurricanes and earthquakes.”
The union says it wants a transformation of the electrical system to a public model that integrates workers, that drives efficiency, and that promotes renewable energy on rooftops and the active integration of citizens as generators of energy and participants.