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/ Wednesday, June 9, 2021
Private Sector Supports Luma Energy Transformation
Affirms that resilient energy will improve ease of doing business
P Giovanna Garofalo
ggarofalo@wjournalpr.com
@giopgarofalo
uerto Rico’s manufacturing sector is optimistic about LUMA Energy’s takeover of the energy transmission and distribution from the P.R. Electric Power Authority (PREPA), with hopes that the proper implementation of the provisions contained in the public-private partnership (PPP) contract will improve the ease of doing business on the island. Yandia Pérez, the executive VP of the Puerto Rico Manufacturers Association (PRMA), asserted that the industry has made multimillion-dollar investments to establish their own generators and backup systems because the island’s energy infrastructure is not reliable, a problem exacerbated by the hurricanes of 2017. “You cannot stop a drug production line, for example, so the manufacturing sector has seen the need to have an alternate plan for them to keep their plants open,” she explained. Pérez expressed confidence that LUMA will take the necessary steps to improve this infrastructure and pave the way toward renewable energy sources. “Basically, understanding that this is an important contract for Puerto Rico and that there is already a transition process, we understand that this transition process has to take place in the best possible way to ensure that all the conditions that were established there are met,” she told THE WEEKLY JOURNAL. Asked whether this transformation is expected to result in more prosperity for the industry, the executive said that “this factor is an important one within the considerations that exist in the sector regarding investing in Puerto Rico or expanding. It is an important cost for companies, any type of company. And not just the cost, but the reliability... If the existing plan is properly implemented, Puerto Rico will have a better [electrical] system and it will definitely make companies feel safer doing business here, or those that want to come.” Pérez was echoed by Tomás Ramírez, VP of the Puerto Rico Parador Owners Association, who said that the island needs a more “efficient, agile and effective” energy sector, which is why he supports
LUMA reported that it has restored electricity to 674,000 customers in its first week of operations. >Courtesy of LUMA Energy
privatizing PREPA. However, he added that “despite the support for privatization, I have serious concerns about how the transition process has been carried out.” Meanwhile, Iván Báez, president of the Retail Trade Association (Acdet by its Spanish acronym) and director of Public Affairs at Walmart Puerto Rico, said that Acdet sent a letter to LUMA executives requesting a meeting to discuss how the new PPP deal benefits or affects the commercial sector. “We need to clarify several doubts and we do not have a formed opinion of how efficient or effective the service is until we meet with them. We are in the middle of the hurricane season and our stores help to stabilize the population in times of crisis, so we need to know what the work plan for emergency management is,” he added.
Defends LUMA Amid Protests
Moreover, Pérez defended the agreement that led to LUMA’s control of PREPA’s transmission and distribution system. While various sectors continue protesting against the contract, claiming that it will have detrimental effects on clients and PREPA union workers, she observed that the government accepted several proposals to transform Puerto Rico’s energy system in accordance with the Puerto Rico Energy Public Policy Act of 2019. “The necessary process was taken for [the government] to conclude that LUMA was the
company that could best offer or meet the requirements that were made. Therefore, if that process has already been endorsed, that process has already concluded and LUMA was chosen, then it is very important for us that this contract is fulfilled and implemented. “Our expectation is that LUMA can comply with the plan, the proposal and the requirements that it said it could meet in that contract, and ensure that there is communication with all the agencies that prevent this contract from being fulfilled. This, plus the metrics necessary for the contract to work, results in us having a stable and economically viable electricity system for all consumers and users in Puerto Rico,” Pérez added. Some arguments from opponents are that LUMA would raise the energy rates and impose a “solar tax” on clients who generate their own power through solar energy. However, Pérez said that any increase needs to be approved by the Puerto Rico Energy Bureau and is likely to be susceptible to factors such as rising fuel costs. Meanwhile, LUMA had stated that it would raise rates to handle litigations related to the utility’s bankruptcy process but denied arbitrary hikes. As for the solar tax, this measure had been proposed by the Financial Oversight and Management Board as part of PREPA’s Restructuring Support Agreement, before LUMA took over transmission and distribution. -Reporter Christian Ramos contributed to this story.
