Puerto Rico needs clear ‘manifesto’ to fix its power system
The word “manifesto” evokes clarity, change, even revolution, from the Latin “to make something clearly visible.”
What Puerto Rico lacks in its power debate is exactly that: a clear vision to regain trust in a utility that delivers what people need at a price they can afford. Puerto Rico’s power crisis is a tale of privatization without real turnaround.
Since LUMA Energy took over transmission and distribution in 2021 under a public-private partnership, the promise was simple: lower costs, better reliability, a modern grid. Four years later, residential rates remain far above U.S. norms, while enduring too many blackouts. High energy costs quietly tax every paycheck and business, eroding competitiveness and discouraging new investment.
Excluding Hawaii, California and Connecticut, which typically have slighter higher rates than Puerto Rico, our residential rates sit close to 20% above the U.S. average. Not an exaggeration: we are paying first-world prices for third-world service.
The consumer affairs agency has sued LUMA over outages and denied claims, while elected officials talk about cancelling the contract even as they admit it would be legally and financially complex. Meanwhile, federal agencies have approved billions of dollars to rebuild the grid, yet only a fraction has turned into real projects.
LUMA reports replacing poles, hardening lines and advancing federally funded work. But from the customer’s point of view, two questions matter: Do the lights stay on, and can I afford my bill? On both counts, LUMA is still failing and Puerto Ricans suffering.
PREPA still owns the assets and remains bankrupt. LUMA operates transmission and distribution; Genera runs most generation. PREPA was a distressed utility: decades of underinvestment, political interference, aging plants and an imported-oil addiction. LUMA inherited that mess but also accepted a contract that pays fixed fees with limited downside risk while leaving levers like fuel and generation outside its control. The result, a finger-pointing game: PREPA blames LUMA, LUMA blames Genera, everyone blames FEMA, and the consumer pays the bill. Our very own version of the “Who’s on First?” comedic routine.
To fix this, we must treat Puerto Rico’s grid as what it really is: a complex corporate turnaround with a gargantuan capital project, not just a service concession. That means acting on four fronts.
1. Reliability at the center of the contract.
Outage metrics are monitored but still treated as technical details, not as the core “product” the operator sells. A meaningful share of LUMA’s fees and bonuses should depend on year-over-year improvements in outage frequency and duration, feeder by feeder, against a clear PREPA-era baseline.
A public dashboard must show performance down to the circuit level, and if an area exceeds a threshold of outage hours, customers should automatically receive bill credits. When reliability hits executives’ bonuses and reputation in a transparent way, behavior changes.
2. Fix governance and cash flow; or no operator will succeed.
Reports indicate PREPA has at times withheld operational funding from LUMA and Genera while still collecting customer revenues, contributing to longer outages and unpaid fuel bills. We need an efficient, unified, expert board that oversees PREPA, LUMA and Genera as parts of one system, demanding proper use of funds and penalizing excessive or abusive expenditures.
Clear rules must ensure that money paid by customers for operations and maintenance reaches the operators through objective formulas, protected from short-term political games. We also need funded storm reserves and pre-negotiated mutual-assistance crews. Without this discipline, firing LUMA and hiring “LUMA 2.0” will only replay the same movie.
3. Use federal billions to attack root causes.
Federal dollars must be focused on high-impact bottlenecks: the worst-performing feeders, substations that repeatedly trigger cascading blackouts and fragile transmission corridors. They should fund critical infrastructure microgrids and expand rooftop solar plus batteries for vulnerable households. That will require significant project and federal funds management expertise at all levels.
4. Treat cost and reliability as one problem.
If Puerto Rico burns imported oil for much of its power, bills will stay high and volatile. Generation is not LUMA’s remit, but it is responsible for planning, integrating added resources and interconnecting renewables.
Regulators and the government must push all players toward a coherent path that accelerates alternative sources of power, retiring the oldest oil units as fast as reliability allows while using demand response and smart meters to flatten peaks to reduce the need for expensive peaking plants. Lower cost and higher reliability are not opposing goals; both require getting off the fuel roller coaster.
Finally, we must simplify accountability. Whether we keep LUMA, renegotiate or replace it, citizens deserve one regulator with teeth enforcing clear metrics and fines, one public dashboard showing performance and one political owner, aka the elected government, that either defends the model with evidence or changes it with seriousness, not slogans.
The cry of “¡Fuera LUMA!” signifies a deep distrust and sense of frustration in the current structure that needs urgent attention. To grow our economy, attract investment and serve our population right, we must stop treating electricity as an afterthought or a political trophy.
We need to treat it as what it is: the backbone of every development plan, and manage it with the rigor we would demand from any multibillion-dollar business under our care. Our manifesto is clear, no more time for expensive blackouts!
Raúl Burgos has more than 30 years of business experience and is president and managing partner of Global 1080 Business Solutions, a consulting firm specializing in Latin America, C-level advisory, strategic growth and operational improvement, and of G1080 Consulting, which focuses on small and midsize businesses and startups. He is also the founder of the Puerto Rico Business Group on LinkedIn, a network of more than 30,000 professionals committed to advancing Puerto Rico’s business environment.
