By THE STAR STAFF
The Puerto Rico Energy Bureau (PREB) is starting a review process for new consumer power rates that will become effective in July of next year, the regulator’s documents show.
It will be the first time in seven years that the energy regulator has reviewed power rates.
The PREB, part of the Puerto Rico Public Service Regulatory Board, issued guidelines recently for the filing requirements and rate review procedures, but all items are tentative pending comments from a technical conference scheduled for this Friday.
The rate case will cover the full scope of revenues and expenditures involved in providing electricity service. All revenues means all revenues from customers, from companies that use the electrical infrastructure, and from state and federal government agencies. All expenditures means all expenditures for normal operations, storm resilience and restoration, Puerto Rico Electric Power Authority (PREPA)-owned infrastructure, and anything else. The rates will also ensure that PREPA has sufficient revenues when federal aid is reduced.
“This comprehensive approach will allow customers, government actors, industry actors, and current and future lenders to know the true cost of electrical service,” the resolution notes. “Only with this full knowledge can Puerto Rico prepare for a time when the costs continue but the governmental help diminishes.”
The three-year rate case, covering fiscal years 2026, 2027 and 2028, aims to merge the budget process with the rate case process and reflect the power-source changes caused by the 2020 and pending 2025 integrated resource plans (IRPs). The IRP is the blueprint for the island’s energy needs.
“Specifically, the Energy Bureau would set separate rates for each of three fiscal years, based on what the evidence shows about changes in those three years caused by the current (2020) IRP and the to-be-filed-and-addressed-in-2025 IRP,” the PREB said. “The final rate order would create a three-year-rate path that states real rates for Year 1, and projected rates for Year 2 and Year 1.”
It would also include a process for updating the rates for Year 2 and Year 3.
The effective date for the Year 1 rates would be July 1, 2025.
The review and the order issuance processes will not last more than 180 days from the PREB’s determination by resolution that the rate review request is complete; provided, however, that the PREB may extend the review process for an additional term that will not exceed 60 days.
The PREB said it will not declare the rate filing “complete” until the parties have filed all prefiled testimony, including, at the end, LUMA Energy’s rebuttal. This approach recognizes that LUMA’s rebuttal will probably make changes to its original filing.
“Only then will all participants, and the Energy Bureau, know what rate levels LUMA is proposing,” the regulator said. “With this approach, the Energy Bureau then will have 180 days to hold the evidentiary and public hearings, receive briefs, deliberate, and issue the final order.”
Given the complexity of setting rates for the first time in seven years, the PREB is contemplating two phases, each with its own 180-day period, that could overlap. The process will include questioning advisory consultants whose opinions will be available through public reports.
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