Company Announces No Increase in Customers Rates Related to its Operation of the Transmission & Distribution System

San Juan, Puerto Rico, April 2, 2022 – Yesterday, LUMA filed its Annual Budgets for Fiscal Year 2023 with the Puerto Rico Energy Bureau, which calls for no increase in the base rate in customers’ bills related to the operation of the transmission and distribution system. The proposed budget will enable LUMA’s more than 3,000 hard-working men and women to continue to build a more reliable, more resilient and more customer-focused and cleaner energy system for its customers and all of Puerto Rico – without impacting customer bills.

No Increase in Base Rate

“As part of our customer focus, we are incredibly sensitive to affordability, and to the significant spike of generation fuel costs that have resulted in higher rates – rate increases that are beyond LUMA’s control,” said LUMA President Wayne Stensby. “While LUMA does not generate energy, nor have any control over the impact that fuels costs have on customer rates, we do manage costs associated with operation of the Transmission and Distribution (T&D) system. As part of our commitment to our customers and acknowledging the importance of operating as efficiently as possible, LUMA does not propose any increase or any change in the base rate for Fiscal Year 2023,” Stensby said.

Given that the cost of fuel and energy purchases from generators already make up more than 70% of customers’ bills, LUMA stated it is committed to doing all it can to continue to work within its budgets in 2023 despite the inherited challenges the company continues to face.

Key Budget Priorities and Investments

Over half of LUMA’s 2023 annual program spending will be related to system recovery and resilience programs that will establish the foundation required to continue to empower the electric transformation across Puerto Rico. Key budget priorities include:

• Repairing and Replacing Poles, Streetlights, Feeders and Substations: In Fiscal Year 2023 LUMA’s construction efforts will continue to be focused on pole replacements, streetlight repairs, rebuilding distribution feeders and substation repairs and rebuilds. This includes federally funded activities within transmission, distribution and substation repairs and replacements programs

• Improving Customer Experience: Continued investment in customer experience training and improved process resulting in response accuracy, clear communication, and shortened resolution times. Resources will be invested in reducing system limitations and manual work arounds and developing enhancements within the billing system for more accurate customer billing.

• Strengthening Vegetation Management: Increased programmatic activities on vegetation management focused on improving reliability. LUMA is bringing specialized equipment to Puerto Rico to continue the work of remediating rights-of-way and proactively removing vegetation in addition to outage response vegetation management.

• Enabling and Integrating Renewable Energy: We are supporting the integration of up over 800 MW of new utility scale solar from the PREB-approved RFP process and coordinating the expansion of existing utility scale wind and solar facilities to add 175 MW in the near term. LUMA is developing the next IRP and collaborating with the DOE’s PR100 initiative. LUMA will also start and continue delivering new programs, projects and services that support the clean energy transition including net energy metering, energy efficiency, demand response (DR), and electric vehicles as well as advancing planning studies to optimize existing and new resources.

• Investing in Worker Safety and Training: Continued near-term investments in operational excellence and safety programs related to technical training, tools and safety equipment, cybersecurity, T&D fleet repairs/replacements and security systems — collectively viewed as enabling programs necessary to establish the necessary organizational infrastructure to successfully and safely execute operational and capital work.

• Utilizing New Technologies in Puerto Rico: LUMA will continue to invest in new and emerging technologies in Puerto Rico and broaden deployment to efficiently facilitate the recovery and transformation of the T&D System. Examples include the use of LIDAR to better understand and plan for right-of-way vegetation clearing, installation of advanced metering and monitoring systems, implementing new communication protocols, and enabling distribution automation to improve power quality and reliability, reduce losses and increase hosting capacity for distributed renewables.

• Advancing Emergency Preparedness: While LUMA has already made significant foundational improvements to the T&D System within its first year of operations, with each passing year LUMA is sharpening preparedness and restoration for potential storms and other emergencies. We are continually improving plans, broadening training, and strengthening coordination with relevant agencies and communication with customers.

“While we know that we have a lot of work ahead of us, our team has and will continue to make steady and positive progress to build the next generation electric grid that Puerto Ricans expect and deserve, said Stensby. “Our operations and investments into the electric system will bring about positive and fundamental change over the coming months and years.”

About LUMA

LUMA is a Puerto Rican company that, since June 1, 2021, operates and manages 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, resilient, cleaner 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.