Testimony by IEEFA before the U.S. House Committee on Natural Resources on Puerto Rico's Transmission and Distribution Agreement
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Key Findings
Electricity grid operating agreement with LUMA likely to reproduce longstanding operational and financial dysfunction
Collective bargaining agreements at PREPA have been disregarded
Households and businesses need affordable and stable rates in Puerto Rico
Puerto Rico has established a goal of 100% renewable energy by 2050. LUMA’s contract has no provisions that establish consequences if that goal is missed
Overview
I submit testimony now on the subject of the LUMA operating agreement with the P3 Authority and PREPA to run Puerto Rico’s electricity grid.
The scope of the work requires LUMA to manage the transmission and distribution (T&D) and customer service systems, as well as the day-to-day operations of the Authority—its planning, contracting, rate-setting strategies, dispatch activities, power procurement and responsibility to oversight agencies.
Far from simply managing the repair, and upgrades to the transmission and distribution system, LUMA will take over the majority of the operational functions of PREPA. Indeed, the only responsibility that appears to remain with PREPA is the payment of the retiree pension obligation.
