By The Star Staff
LUMA Energy President & CEO Juan Saca said Thursday that a temporary increase in the electricity bill is expected for the next quarter because of fuel prices.
Saca insisted that LUMA, the private operator of the island’s electric power transmission and distribution system, is not requesting an increase in the electricity rate, but rather for fuel purchase costs.
“If there is a $200 bill for [a consumer], $30 belongs to LUMA,” he said. “The rest is fuel and other things that are right there on the bill.”
Fuel costs fluctuate every three months, Saca pointed out.
“Sometimes it goes down, sometimes it goes up,” Saca said following a meeting with senators and mayors from the New Progressive Party (NPP). “What I don’t want is for the Puerto Rican people to think that LUMA is raising the cost of electricity. That is the job of the [Puerto Rico Energy] Bureau. In this case, we are talking about fuel. I understand that it is half a cent [the requested increase].”
Nonetheless, there will be a process for a permanent power rate hike after the Puerto Rico Electric Power Authority (PREPA) exits bankruptcy.
The Financial Oversight and Management Board is supporting a hike in the power rate to guarantee the operations of the electrical system, a move that certain sectors have said will impact the economy.
The Energy Bureau (PREB) recently postponed the start of a rate case order it had issued, citing the pending confirmation of the PREPA Plan of Adjustment and its ultimate contents as a key input in such a process. After confirmation hearings concluded in March, PREPA appeared to be nearing its exit from bankruptcy and approaching the end of the Title III process.
On June 17, however, following the U.S. Court of Appeals for the First Circuit’s determination establishing that PREPA bondholders hold a non-recourse claim against the utility secured by a valid, perfected security interest in PREPA’s net revenues, the oversight board announced plans to seek a limited reopening of the confirmation hearing record in order to deal strictly with the value of that collateral.
Due to the PREB’s postponement of the rate case, the fiscal year 2025 PREPA budget for the energy system is expected to continue to be constrained by the current base rate. The budget is now in deficit by almost $60 million. The oversight board has stressed the need for a budget that provides sufficient revenues for PREPA and private operators to work.