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LUMA Files Quarterly GENERATION Fuel Cost Adjustment Calculations with the Puerto Rico Energy Bureau

Company Expresses Deep Concern Over Rising Cost of Fuel Used by PREPA to Generate Energy/Urges Customers to Reach Out for Assistance

San Juan, Puerto Rico, June 15, 2022 – Today, LUMA filed the required quarterly generation fuel and purchased power cost adjustments – informed by fuel cost changes provided by the Puerto Rico Electric Power Authority (PREPA) – with the Puerto Rico Energy Bureau (PREB). As LUMA has made repeatedly clear, it does not generate energy, has no control over generation fuel costs, does not profit from any increase in generation fuel costs, does not set rates and has never proposed a rate increase. Today’s filing highlights the significant effect global events have had on fuel used by PREPA and others to generate energy.

Based on information provided by PREPA, the cost of fuel used by PREPA and other generators has increased by approximately 30% since last quarter due to the impact of global events, including Russia’s invasion of Ukraine. Given these factors, the estimate of the calculated fuel and purchased power adjustment for a residential customer due to PREPA’s generation fuel costs is anticipated to be approximately 4.1-cents per kilowatt-hour.

“All of us at LUMA are deeply concerned about the impact increased fuel costs have on our customers. Our concern for our customers struggling financially is one reason LUMA has never proposed a rate increase. Even though LUMA does not generate energy, nor control the rate impact of fuel costs used by PREPA to generate energy, we are still determined to do all we can to help our customers. As part of that commitment, we want our customers to reach out and learn more about the various financial assistance programs, flexible payment plans and special rates we offer,” said Wayne Stensby, LUMA President and Chief Executive Officer.

LUMA HAS NEVER RAISED CUSTOMER RATES

Over the last year, the dramatic increase in generation fuel costs has been the sole reason customer rates have increased. Over the past year, PREPA generation costs have required six rate increases to adjust for changes to fuel costs, while LUMA, in contrast, has never raised the customer base rate.

As specified in the generation fuel cost adjustment filing with the PREB, PREPA’s responsibility is to generate energy, determine the cost of purchased power from private generators and determine the cost of fuel required for generation from its power plants. LUMA’s responsibility is solely to estimate the quarterly fuel and purchased power adjustments and submit the calculations to the PREB. LUMA does not control or determine the impact that generation fuel costs may have on customer rates. Ultimately, approved fuel and purchased power cost adjustments to customer rates will be determined by the PREB.

The following outlines the six key facts that explain the process for calculating generation fuel costs and the possible impact on customer rates.

Key Facts: Quarterly Fuel Cost Adjustment Process

  1. Puerto Rico is heavily dependent on expensive diesel and bunker fuels to generate electricity.
  2. As fuel costs fluctuate with seasons and global markets, Puerto Rico has a formal regulatory process for adjusting customer rates accordingly.
  3. Customers’ electricity rates are adjusted on a quarterly basis to account for the changing cost of fuel used for power generation and other factors.
  4. PREPA and other generators negotiate fuel contracts, purchase fuel, manage power plants that generate energy for Puerto Rico and report their costs on a quarterly basis.
  5. LUMA calculates the estimated impact on customers based on information provided by PREPA. LUMA does not generate energy or have any control over the rate impact that generation fuel costs may have on customers. In fact, LUMA has never raised or proposed raising customer rates.
  6. The PREB is responsible for evaluating and approving electric customer rate adjustments based on fuel cost information reported by PREPA.

Helping Our Customers: Financial Assistance is Available

LUMA is steadfast in its commitment to helping and empowering customers. Since June of 2021, the company has supported more than $31 million in critical financial assistance from the La Familia Low-Income Home Energy Assistance Program (LIHEAP), the COVID Rental Assistance program and other available financial assistance programs to support people in need. LUMA has also set up more than 10,000 payment arrangements, helping customers pay their bills. LUMA will provide information online and on social media to help eligible customers learn about available government financial programs. In addition, LUMA will continue to promote its own payment plan options to support customers who may have difficulty paying their energy bills. The company strongly encourages customers to call 1-844-888-5862, visit lumapr.com or use the Mi Luma app to learn what assistance programs are available to those concerned with paying their bills.

Minimize the Future Impact of Fuel Increases

To help minimize the future impact of global fuel prices, LUMA is committed to advancing the adoption of renewables in Puerto Rico for all of its customers. In just over twelve months, LUMA has connected more than 25,000 solar customers, adding over 130 megawatts of renewable electricity to the grid. Additionally, LUMA is coordinating with three utility-scale wind and solar energy facilities, totaling over 175 megawatts of renewable electricity, to interconnect them safely to the grid as soon as possible.

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.