Puerto Rico’s House of Representatives Approves Cancelation of LUMA Contract

The president of the Committee on Energy Affairs said it has conducted an investigation, and the results are enough evidence to demonstrate LUMA’s noncompliance.

Puerto Rico’s House of Representatives approved on Tuesday a resolution that orders the cancelation of Luma Energy’s contract with the Public-Private Partnerships Authority (PPPA), an agency in charge of promoting collaborations between the public and private sectors.

Luis Torres, the representative of the Popular Democratic Party (PPD by its Spanish initials), said LUMA has not complied with the metrics stipulated in its contract. LUMA took over the transmission and distribution of the island’s electrical system last June with a $115 million contract. Since then LUMA has received criticism for the lack of knowledge of the island’s system, six price increases, and continuous power outages. Torres said that since taking over, LUMA has charged subscribers an additional $160 million for electricity.

“The contract, as it is, does not serve the best interests of Puerto Rico, and LUMA has failed to comply with the execution metrics. They have allowed more than 14 blackouts and the duration of those blackouts has lasted longer than previously with PREPA. They do not have the necessary staff and have been negligent in complying with the maintenance of all the areas they are in charge of,” said Torres, who is chairman of the Committee on Energy Affairs.

The resolution was approved with a vote of 29 in favor, 16 against, and one vote abstained. The entire New Progressive Party (PNP by its Spanish initials) delegation voted against it, except Lourdes Ramos, who abstained because she is a PREPA employee.

Torres said that the Committee has been conducting investigations since last year, and the results are sufficient evidence to demonstrate LUMA’s noncompliance.

“Because of LUMA’s noncompliance, it’s the ideal moment to easily cancel it. In fact, the government can cancel the contract without having to go to court for non-compliance”, Torres said.

On Monday, Gov. Pedro Pierluisi ruled out canceling the LUMA contract, despite the April 6 blackout. The governor said that he will have to wait for the results of an investigation into the cause of the power outage.

“It would not be responsible on my part to take an action of this nature without having serious findings according to an independent investigation such as the one that the Bureau [of electricity] is going to carry out,” Pierluisi said during a news conference.

The PNP delegation opposes the cancellation of the contract, saying it will cost money.

“We all agree that changes must be made to the contract, but from there to canceling it, I have concerns because from a legal point of view we have to be responsible because it is going to cost us money because the PPPA has not done the work to document the file in order to cancel the contract,” said Rep. José “Quiquito” Meléndez.

Now the Senate will vote on the resolution.