March 3, 2021

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Anticipated bill increase in EEE | government

The Union of Workers in the Electricity and Irrigation Industry (Utier), predicted an increase in the rate at the end of the year, since in his opinion, the contract with the company LUMA Energy establishes that it has the power to request a increase.

"And that is written, it is not that there is going to be speculation, LUMA has the power to ask for the increase and on the itinerary is when they will ask for it … PREPA has a significant operational deficit. So now they ratify this contract where they replace everything PREPA does with its employees and management and puts another company that reimburses everything and pays them these millions of dollars. There is no other way than increasing the rate, "said the union's legal representative , Rolando Emmanuelli.

“And they acknowledge in the contract that LUMA has the authority to require an increase in the rate and there is a very important exhibit of the contract that establishes the itinerary and in the itinerary it says that 186 days after signing or the contract they are going to submit a request to the negotiated to review the rate, "added the lawyer.

He recalled that prior to the pandemic by Covid-19, the increase was on the table with the creditors, who propose an increase 4.6 cents per kilowatt hour.

Anticipate "two rounds" of increase

"It would probably be two rounds of increase. For the second increase, a more advanced process would be taking place, that is, it is foreseeable that the first increase will occur at the beginning of the year and that later, when the adjustment plan is submitted, there would be the second increase, "he said. [19659002] He explained that the rate increase would be to cover the costs of new operational expenses.

“We have a bankrupt electricity company, which does not have to cover its normal costs and now has to find money to pay additional money to LUMA. That is why they want and that is another of the highly controversial clauses, asking the judge (Laura) Taylor Swain to make this obligation with LUMA a priority obligation based on the administrative expenses of the bankruptcy, "he said.

"They want to convert into an administrative expense of bankruptcy and that means that they charge above any other creditor, alter the internal priorities of PREPA's creditors and charge above all," he added.

He commented that they requested the Bureau of Puerto Rico Energy (NEPR) a reconsideration of PREPA's contract with LUMA Energy. Likewise, it announced that if the negotiated party does not accept their request, they will appeal to the Court of Appeals of Puerto Rico.

It maintained that the contract does not comply with the regulatory requirements or with the legislated public policy. Similarly, he pointed out that the contract is a leonine one because its clauses and

LUMA Energy will manage and operate PREPA's transmission and distribution system. The agreement establishes that this consortium of companies will operate, manage, maintain, repair and restore the transmission and distribution system of the public corporation.

For her part, PREPA's legal advisor Astrid Rodríguez, stated in written statements that “The Puerto Rico Energy Bureau, pursuant to the provisions of Act 57-2014, as amended, is the entity with the authority to approve the rates. This power is maintained in the Energy Bureau. At the time, LUMA, just as the Authority did, will have to submit an operational budget to the Energy Bureau, for its evaluation, and it will be the Bureau that determines whether or not a revision of the tariff is required. "

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