October 13, 2020 Read More →

Increasing number of Puerto Rico candidates call for scrutiny of LUMA deal

Utility Dive:

The Puerto Rico Electric Power Authority (PREPA) has said it expects the LUMA operating deal to cut costs by hundreds of millions, and is optimistic the public-private partnership can help capture operating savings and system efficiencies.

But since the contract was signed, observers have had doubts. LUMA will be paid through a mix of fixed fees and incentive payments for meeting or exceeding certain metrics that will be developed over a one-year transition period.

Tom Sanzillo, IEEFA’s director of finance and author of the report, said there is little accountability written into the LUMA-PREPA agreement.

“The largest part of LUMA Energy’s fee for running the grid must be paid whether or not the company is performing well,” Sanzillo wrote. “The LUMA contract is objectionable on a mix of policy and procedural grounds that are so extensive that its execution is unlikely to achieve critical resiliency, affordability, renewable energy, workforce and budgetary goals.” 

[Robert Walton]

More: LUMA rejects mounting criticism of Puerto Rico grid operating contract, sees $100M annual savings

Posted in: IEEFA In the News

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