April 6, 2021 (IEEFA) ⎼ New research has revealed major problems in the procurement process that resulted in the selection of LUMA Energy to operate Puerto Rico’s electrical grid, according to testimony given today to a Puerto Rico House of Representatives committee.
Tom Sanzillo, director of financial analysis at the Institute for Energy Economics and Financial Analysis (IEEFA), told Puerto Rican lawmakers that an October IEEFA report already found that the deal to outsource the island’s grid management to a private company lacked sufficient oversight; hid additional costs; lacked performance metrics; and mismanaged the utility’s workforce.
And since that report was released, Sanzillo said, additional issues have come to light. “The way the contractor was selected raises several disturbing questions,” he said.
New questions raised by Sanzillo, a former New York State deputy comptroller, include:
“Given the many hidden costs of the contract and the lack of accountability to achieve any level of savings, it is virtually certain that rates will go up, not down,” Sanzillo said. “The contract is not in the best interests of the people of Puerto Rico and should be cancelled.”
(Spanish translation): Testimonio de Tom Sanzillo – Ante la Comisión de Desarrollo Económico, 6 de abril de 2021
Press release in Spanish:
IEEFA EE. UU.: Testimonio arroja luz sobre problemas adicionales con acuerdo de LUMA de Puerto Rico
Tom Sanzillo ([email protected]) is IEEFA’s director of financial analysis.
Vivienne Heston ([email protected]) +1 (914) 439-8921.
The Institute for Energy Economics and Financial Analysis (IEEFA) examines issues related to energy markets, trends and policies. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy.