Puerto Rico Energy Bureau orders 2.75-cent drop in cost of energy
The Puerto Rico Energy Bureau approved a resolution that reduces the cost of electric service by 2.75 cents per kilowatt hour (kWH) for the next two months.
The savings that this determination represents for an average residential customer that consumes 800 kWh in a month is $22.03, with a cost per kWh of 22.7 cents compared to the current cost of 25.4 cents.
Customers will see the savings during the months of August and September, which are typically the ones with the highest electricity consumption in Puerto Rico.
The resolution is the result of an accelerated reconciliation process that is activated when, at the end of a monthly billing cycle, it is determined that the actual costs of energy purchases or fuel purchases differed from the Puerto Rico Electric Power Authority’s (PREPA) and Luma Energy’s billing by more than $20 million.
According to the resolution, the accelerated reconciliation was activated when, at the end of June, Luma had a collections shortfall to buy fuel of more than $48 million.
However, in the Bureau’s reconciliation, the deficiency was compensated with:
- A notification that PREPA got from the Federal Emergency Management Agency (FEMA) on March 11, which was informed to the Bureau on July 8th, that it would be increasing from 75% to 90% the reimbursement for the purchase of more expensive fuel to run PREPA’s peaker plants because of the emergency caused by the 2020 earthquakes. The Bureau ordered that the net impact of FEMA’s determination, about $34 million, be credited in favor of the clients since that amount has already been invoiced.
- The reduction in the cost of oil in recent weeks means that PREPA’s projected spending on fuel purchases for the next two months is reduced by $69 million compared to the reconciliation approved at the end of June 2022. The Bureau ordered that this amount be credited in favor of customers.
- PREPA informed the Bureau that Naturgy would be paying a penalty for the shortfall of natural gas supply to the Costa Sur 5 and 6 units during the period from April to June 2022. The Bureau ordered that more than $14 million be credited to customers.
“The Energy Bureau’s role of the is to ensure the public interest. In the exercise of this function, the Bureau ensures that the consumer is only charged for the actual costs to produce, transmit and distribute energy, not a penny less, nor a penny more,” said Bureau President Edison Avilés said.
“Today, once again, the value of having an independent entity with open and transparent processes that supervises the prudence of the decisions made by electric power producers in Puerto Rico is demonstrated,” he said.
The ordered drop in the cost of kilowatt hour comes several weeks after the same agency announced that Puerto Rican residential consumers will see a 15.9% increase in their monthly electricity bills starting July 1, after approving a rate adjustment for the service at the time.
The hike represented the seventh consecutive increase for consumers in the past year.