May 26, 2021 Read More →

Economic decline spurs Luma Energy’s PREPA takeover on June 1

Bloomberg: 

Puerto Rico will take a major step toward transforming its government-owned power provider next week as Luma Energy is set to begin operating and managing the utility, part of the commonwealth’s plan to rehabilitate its aging system and end chronic outages.

Luma is poised on June 1 to take over transmission and distribution for Puerto Rico’s Electric Power Authority, which is the main supplier of electricity for the island’s 3.3 million residents and is one of the two largest U.S. public power utilities by customer base. Prepa, as the agency is known, will retain ownership of its infrastructure and assets.

Improving electricity is key to pulling the U.S. territory out of years of economic decline. Residents and businesses have suffered with unreliable service and rates that are higher than on the U.S. mainland. But the utility’s main labor union and some politicians are trying to delay or derail the takeover. They question if Luma Energy will have enough workers to operate such a large system and say the contract leaves thousands of existing public employees adrift.

“The Prepa transition is very unique in the world,” said Wayne Stensby, president and chief executive officer of Luma Energy. “If the simple question is, have you done one just like this before? I think the answer has got to be no.”

[Michelle Kaske and Jim Wyss]

More: Puerto Rico’s wrecked utility goes private in bid to save island 

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