By The Star Staff
The Puerto Rico Energy Bureau (PREB) announced a system of performance goals and metrics for LUMA Energy, the private operator of the Puerto Rico Electric Power Authority’s transmission and distribution system, that will be in place for three years.
The metrics are designed to guarantee efficiency, safety and reliability in the provision of electrical services.
Historical metrics will be starting points to measure LUMA’s performance and evaluate whether the electrical system’s performance has improved. They will be essential to assessing LUMA’s progress and compliance with the performance standards established by the PREB.
The PREB has established different weights for the three general categories of metrics: customer service; technical, security and regulatory; and financial. In addition, the energy sector regulator decided to give greater weight to technical, security and regulatory metrics in LUMA’s operation with a weighting of 50%, assigning 25% each to the customer service and financial areas.
The PREB will play a crucial role in approving the incentive amount corresponding to LUMA for said year, based on compliance with the established performance goals. The process ensures that LUMA is rewarded only for meeting or exceeding performance expectations, thus incentivizing high-quality service.
The energy regulator will conduct a transparent and publicly open annual review process for both the approval of incentives under the LUMA Energy contract and the establishment of performance metrics for the following year.
PREB Chairman Edison Avilés Deliz said the agency “in its constant efforts to supervise and raise the quality of Puerto Rico’s electrical system, is committed to every action to move toward a more efficient, safe and reliable service for all citizens.”
“These measures we are implementing represent a significant step toward guaranteeing better electricity service for every Puerto Rican, intelligently using the incentive structure awarded as part of the LUMA Energy operating contract,” he said.
While the PREB maintains the proportional allocation of the total incentive fee at the performance metric category level, as well as percentage of 25% of the total fee to the customer service metrics, 50% of the total fee to the technical, safety and regulatory metrics, and the 25% of the total fee to the financial metrics, the regulatory body modified the allocation of base points and the effective weight of individual metrics within the customer service and technical, safety & regulatory categories. Those modifications in the distribution of base points between metrics were undertaken in the interest of several considerations to ensure that the overall portfolio of performance metrics is in the public interest.