As Puerto Rico rebuilds from the devastating effects of Hurricane Fiona, LUMA Energy is facing renewed backlash. LUMA, which is a joint venture between Canadian company ATCO and Texas-based Quanta Services, took over control of Puerto Rico’s energy grid in 2021 after the Puerto Rico Electric Power Authority (PREPA) went bankrupt. With a 15-year contract, LUMA is responsible for power distribution, power transmission, and maintaining and modernizing the power infrastructure.
After Hurricanes Irma and Maria in 2017, the federal government poured $12.8 billion into energy infrastructure projects to modernize Puerto Rico’s outdated electricity grid. But LUMA has been blamed for frequent outages, high prices, and unreliability. The devastating effects of Hurricane Fiona which left 1.5 million Puerto Rican residents without power have left LUMA struggling to create reliable energy services and affordable rates. Puerto Ricans spend approximately 8% of their income on electricity, in comparison to mainland citizens that spend an average of 2.4%. LUMA has raised energy prices seven times since it took over in June 2021.
Puerto Ricans criticized LUMA even before Hurricane Fiona, protesting energy conditions on the island in August. Many residents oppose the privatization of the electricity grid, calling on the Puerto Rican government to terminate LUMA’s control as soon as November when an agreement in the contract expires. LUMA has launched various efforts to address frequent power outages. However, it has used only $5 billion in federal funds to initiate 225 projects with FEMA, reflecting the slow disbursement and use of funding. Ruth Santiago, a member of the energy activist group Queremos Sol bluntly described Puerto Rico’s energy crisis, saying “history is repeating itself because now we don’t have Hurricane Maria, but Hurricane LUMA.”
A few days before Hurricane Fiona hit the islands, the United States House Committee on Transportation and Infrastructure held a hearing on Puerto Rico’s recovery from Irma and Maria. Resident Commissioner Jenniffer González-Colón (NPP, R) of Puerto Rico questioned LUMA officials and left the hearing frustrated after the officials could not provide a timeline for the electric grid to be normalized. González-Colón later said, that “the people deserve to know when we will have an efficient and standardized electrical system. Both LUMA and FEMA left us with more questions than answers. In both cases core issues remain unanswered, it seems unbelievable that five years after Hurricane Maria we would not have an answer on how to modernize the power grid. The administration has to take action and restructure processes, cut the bureaucracy and accelerate processes so that the recovery projects, specifically those of the electrical network, can start.”
During the hearing, senior vice president of LUMA Shay Bahramirad explained the power system was “very poor” but that LUMA had made improvements in “a journey” towards full recovery. Bahramirad also cited data that Puerto Ricans experience an average of 7.6 outages per year rather than an average of 10.6 under PREPA. While there are fewer outages, the outage duration has increased consistently. In a heated exchange, González-Colón asked, “You are an engineer. You make plans, so my question is, what is the estimated time you have to get the power system fixed? That’s a simple question: Is it a year or two years? How many months? I know you need federal funds to make that progress, but do you have that time estimate?” Bahramirad said, “What I can tell you is that the number of projects that are in FEMA, each one of them is going to improve the reliability of the system.”
Along with the Transportation and Infrastructure Committee, the US House Committee on Natural Resources and the US House Committee on Energy and Commerce have asked LUMA for answers. Natural Resources Chair Raúl Grijalva (D) of Arizona said in a statement after Hurricane Fiona, “I want to make it abundantly clear that the people of Puerto Rico deserve an electrical grid and other critical infrastructure that is built to endure these kinds of natural disasters and other effects of climate change. But for too long, they have been living with a power utility that hasn’t delivered on that obligation. Recovering from this disaster is a first and foremost priority, but I do intend to continue my efforts to hold PREPA and LUMA accountable.” The Natural Resources Committee postponed a hearing on LUMA originally scheduled for September 22.
The Committee on Energy and Commerce sent a letter to LUMA, requesting information on the amount of funding LUMA receives from its contract with PREPA, LUMA’s progress in fixing the grid, preparations made in advance of Hurricane Fiona, explanations for the seven rate increases LUMA implemented, and whether LUMA would adopt additional grid resilience technologies. The authors highlighted, “there was never a doubt that rebuilding infrastructure following Hurricane Maria would be a challenge, but LUMA has been richly compensated to meet that challenge. Yet, results are not being delivered to Puerto Ricans, who deserve reliable and affordable energy. The collapse of the electric grid in the aftermath of Hurricane Fiona is just the latest example of such failures.”