Sunday, September 26, 2021

IEEFA: Puerto Rico’s electric grid suffers series of setbacks under Luma Energy management

By on June 25, 2021

Power outages and services delays should raise alarms for the future

More than two weeks into its management of Puerto Rico’s electrical system, private contractor LUMA Energy is not off to a good start.

Frequent power outages and service delays have tested the patience of an already over-burdened customer base since LUMA Energy took control of the island’s electric system in a privatization switchover on June 1st.

The situation is all the more absurd because, at the same time that LUMA is bringing additional employees from the mainland, experienced Puerto Rican linemen and other former electrical workers are performing unrelated government jobs on the island. Puerto Rican law provided that PREPA employees would not lose their jobs as a result of the transaction, meaning that employees who did not go to work for LUMA were reassigned to other government positions.

The federal Financial Oversight and Management Board for Puerto Rico (FOMB) championed privatization as a way to bring savings and efficiencies to the electrical system, but thus far the new system only seems to be burdening Puerto Ricans with higher costs.  Municipalities are having to absorb the costs and risks of having non-LUMA workers repair power lines. The commonwealth government is footing the bill for former electrical workers to work in other jobs, while ratepayers will pay the elevated costs of LUMA bringing additional employees from the mainland.

The FOMB should reevaluate its disastrous approach to workforce management and withdraw its support for the LUMA contract.

Cathy Kunkel (ckunkel@ieefa.org) is an IEEFA energy analyst.

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