San Juan, Puerto Rico, December 16, 2021 – Today, in its required quarterly fuel cost adjustment filing, LUMA expressed concern to the Puerto Rico Energy Bureau (PREB) regarding the global rise in fuel prices and the potential impact on customers rates.
As part of its commitment to transparency, LUMA emphasizes that it does not set these fuel prices – they are set by global markets. In addition, LUMA identifies that these fuels are critical to PREPA and Puerto Rico’s generation, and that the adjustment of generation fuel and purchased power costs on customer rates is determined by the PREB each quarter. In the filing, LUMA further specified that it does not control how rising fuel prices may impact customer rates or bills – which are exclusively set by the PREB.
LUMA also makes clear in the regulatory filing that it does not financially benefit or profit from any change or increase in generation fuel costs.
“While we may not be able to stop or control the impact of fuel prices on customer rates and bills, we are determined to help our customers who may face financial struggles with a LUMA payment plan or by informing them of an array of readily available government assistance programs,” said Wayne Stensby, President and CEO of LUMA. “Working together with our other partners, we hope to raise public awareness among all of our customers to the programs that exist to help those who may be impacted by rising fuel costs.”
As part of an effort to help its customers, the company will be announcing a public information campaign aimed at raising awareness of various government financial programs available to all eligible customers. In addition, LUMA will be promoting its own payment plan options for customers who may have concerns about paying their energy bills, now or in the future. The company encouraged customers to call 1-844-888-5862 or visit lumapr.com to learn what programs are available to those who are eligible.
Key Facts re: Quarterly Fuel Charge Adjustment Process
Puerto Rico is heavily dependent on fuel to generate electricity. As fuel costs change based on the global marketplace, there is a formal regulatory process for adjusting customers rates accordingly. Puerto Rico customers’ electricity rates are adjusted on a quarterly basis to account for the changing cost of fuel used for power generation and other factors. This adjustment process is the responsibility of the Puerto Rico Energy Bureau (PREB) and is described below:
- Puerto Rico Electric Power Authority (PREPA): The PREPA and other generators are responsible for generation and negotiating fuel contracts.
- Puerto Rico Energy Bureau (PREB): The PREB is responsible for evaluating and approving electric customer rate adjustments based on how much fuel was used for generation, the cost of this fuel and the cost of energy purchased from private generators and other factors. This process occurs every three months (quarterly).
- LUMA: LUMA is responsible for the operation of the Transmission and Distribution system which delivers the electricity produced by PREPA and other generators. LUMA does not generate energy, manage generation plants, negotiate generation fuel costs or purchase fuel. LUMA does not determine or have control on how rising fuel prices may impact customer rates or bills.
- LUMA also does not financially benefit or profit from any change or increase in generation fuel costs. LUMA’s role in the rate adjustment process is limited to calculating the actual cost of generation and providing that information to the PREB on behalf of PREPA.
While the rate adjustment process benefits customers when the price of fuel goes down, customers are also impacted when fuel prices go up. This is just one of the many reasons that LUMA is committed to advancing the adoption of renewables in Puerto Rico, which will feature more stable costs.
Since beginning operations on June 1, 2021, LUMA has connected more than 12,000 customers that have installed rooftop solar (equivalent to about 50 MW). We are also carrying out additional studies to determine how to safely integrate 1,000 MW of utility-scale energy. This is a multiyear effort to modernize the grid and a critical opportunity to integrate more renewable energy that is intended to help Puerto Rico spend less on imported fuel over the coming years.
LUMA is a Puerto Rican company that, since June 1, 2021, operates the electric power transmission and distribution system in Puerto Rico. LUMA is a company driven by a mission to transform the electrical transmission and distribution system to provide all Puerto Ricans with the reliable, durable and affordable electrical grid they deserve. As a customer-centric company, LUMA’s entire workforce of more than 3,000 employees is focused on safely delivering an exceptional customer service experience to its 1.5 million customers.