Puerto Rico Renews Electricity Contract With Criticized Power Company Despite Public Outcry

A private power company who has been heavily-criticized for its handling of Puerto Rico’s power grid has had its contract extended on Wednesday as Puerto Rico Electric Power Authority undergoes a massive debt restructuring.

Luma Energy received an extension of their contract with a 4-1 vote from the Puerto Rico Electric Power Authority (PREPA) as well as a 3-2 vote from the Puerto Rico Public-Private Alliances (P3). The company will be paid $122 million for the next year under the new provisional contract, according to ABC News.

The dissenting vote for PREPA is from Tomás Torres Placa, who is the sole public interest representative in the company’s board of directors. The two votes from P3 who abstained from voting came from Liza Ortiz Camacho and Eduardo Ferrer Ríos, who used their vote to express their disagreement with the extension, Latino Rebels reported.

The private energy company, made of a consortium of three different companies, first received the contract in July 2021 due to the destruction of the power grid under Hurricane Maria and Fiona as well as years of mismanagement and neglect from PREPA.

However, the outages in the country has worsened significantly under Luma, and many of the power stations have received more damage over the past few months, with fires and other incidents happening in the stations as the aging infrastructure which was exacerbated further by Hurricane Fiona.

The decision has been criticized by many sectors in light of Luma’s services. José Luis Dalmau, the leader of the Puerto Rico Senate, has called the extension of Luma Energy’s contract a “blank check” for the company to enter the “pockets of the people,” saying that the decision continues the “attitude of insensitivity towards the public.”

Meanwhile, though Gov. Pedro Pierluisi has criticized Luma Energy’s practices in the past, he has justified the contract extension as necessary due to the company’s continued efforts to rebuild the grid, and that canceling the contract would cost PREPA over $600 million, money that PREPA doesn’t have due to its current debt restructuring case.

“Canceling the contract makes no sense right now,” Pierluisi said. “We all want both LUMA and the Electric Power Authority to improve their performance to have a more stable electric service.”