LUMA Energy will not increase energy rates through ’24
LUMA Energy, the company that will operate Puerto Rico Electric Power Authority’s electric power transmission and distribution system for the next 15 years, vowed not to increase rates during the first three years after it officially begins operating on June 1, 2021.
In a presentation to members of the media, LUMA CEO Wayne Stensby confirmed that the company will file this week with the Puerto Rico Energy Bureau the plans, budgets, metrics, and principles needed “to begin its mission of transforming the island’s electric power system.”
The plan recommends no rate increase, commits to substantial improvements in safety, customer service and reliability across the first three years of operations. By year three, LUMA vowed to reduce power outages by 30%, and the duration of each interruption by 40%.
“Over the past eight months, we have conducted the due diligence and planning required for an orderly transition of the operation and management of the electric power transmission and distribution system in Puerto Rico,” he said.
“Our work during this time has led to the development of comprehensive plans, budgets, metrics, and principles that we’re pleased to submit for approval of the regulator,” said Stensby. “This filing with the Energy Bureau completes this phase of the front-end transition and initiates the sprint toward mid-year service commencement.”
Stensby said customers could expect to experience notable changes after LUMA begins to run PREPA’s transmission and distribution operation in June, in such areas as contact center responsiveness, clearing of vegetation from utility rights of way, inspections of areas experiencing a significant number or size of outages and improved public safety, including streetlights.
“LUMA’s job is to provide electricity that Puerto Ricans can rely on to run their homes and businesses,” Stensby said. “These plans, budgets, metrics, and principles detail LUMA’s mission to recover and transform Puerto Rico’s electric power system to deliver customer-centric, reliable, resilient, sustainable electricity at reasonable prices.”
Since June 2020, LUMA has been reviewing PREPA’s business processes, systems, data, and infrastructure to conduct a detailed assessment of their current state. LUMA found issues that were not limited to hurricane and earthquake damage but also included substantial organization deficiencies that have led to widespread deterioration of the utility over time, officials said.
The company included all of its findings in a System Remediation Plan that it will also submit to the Puerto Rico Energy Bureau. It details strategies that include — among other steps — long-term repair and replacement programs are required across the transmission and distribution system to address the temporary, substandard, and undocumented maintenance that has been previously carried out and address numerous areas like vegetation management, which has been largely neglected.
To address these systemic deficiencies, LUMA focused on a recovery and transformation strategy that resulted in more than 600 initiatives, the executive said.
The System Remediation Plan addresses “fundamental areas aimed at improving operational outcomes and customer satisfaction and meeting regulatory imperatives such as the Integrated Resource Plan that is critical to transforming Puerto Rico’s electricity system,” Stensby said.
LUMA also submitted initial budgets which cover all activities during its first three years of operation, including operation and management, non-federally funded capital, and federally funded capital.
In its presentation, LUMA confirmed it has planned for some $4 billion in initiatives as part of its System Remediation Plan and $11 billion in total improvement programs during the life of the contract.