All generation issues and fuel costs proposed in FCA filing are unrelated to LUMA’s operations

and the service it provides to customers

San Juan, Puerto Rico, Sept. 16, 2024 – Today, as part of the quarterly filing to the Puerto Rico Energy Bureau (PREB) for the quarterly factors for the Fuel Cost Adjustment (FCA) and Power Purchase Cost Adjustment riders to customer electric rates, LUMA reported that the cost of the generation fuel used by GeneraPR, during the months of June, July and August were greater than expected. These additional costs along with the forecast for October-December, indicate a forecasted increase in the factors of approximately 2.9 cents per kilowatt-hour (kWh) to customer bills. The new factors for the final three months of 2024 are subject to PREB’s review and final determinations.  The PREB is the regulatory agency that determines customer rates. As has been stated repeatedly, LUMA is the T&D operator, and is not responsible for generation, fuel purchases, or the ongoing generation operational issues that contributed to this FCA increase.

“Higher fuel costs and ongoing generation issues have resulted in this FCA increase. Unavailability of larger generation units, forces dispatch of the units that use expensive, diesel fuel. As has been the case over the last three years, reliance on expensive fuels for generation in Puerto Rico exposes customers to higher rates. As we have said repeatedly for over three years, LUMA is not responsible for generation, does not generate electricity, does not purchase or have any control over generation fuel costs – that is solely the responsibility of the generators. While we have no control over this FCA increase, we are determined to support our customers and will continue to prioritize clean energy initiatives to help create a cleaner and more independent energy system,” said Juan Saca, LUMA President and CEO.

Factors Affecting Fuel Cost Adjustment

The factors impacting this FCA calculation are the result of Puerto Rico’s generation plants’ use of diesel and bunker fuels to generate electricity throughout the months of June, July and August. Use of these fuels, specifically diesel and bunker fuels, typically results in higher costs than use of other fuels, such as natural gas to generate electricity. is because Multiple generation plants that utilize natural gas were unavailable either for maintenance or unexpected repairs, resulting in higher consumption of these more expensive fuels.

In summary, the factors increasing fuel costs include:

• Total energy demand in the system exceeded forecasts during June, July and August.
• A lower availability of natural gas required the purchase of more expensive fuels.
• Energy producers conducted necessary maintenance and repairs on multiple generation plants, resulting in an increased reliance on fewer, more expensive energy generation sources.
• Lower availability of the most efficient plants requires dispatch of more expensive plans.

LUMA’s Role in FCA Process

As fuel costs and generation fuel consumption fluctuate, there is a formal regulatory process for adjusting customer rates accordingly. LUMA’s role is to calculate fuel costs based on the information provided by GeneraPR and Independent Power Producers (IPPs). LUMA does not add any costs to or financially benefit from the adjustment, nor does the FCA increase fund any of LUMA’s operations. The FCA and PPCA riders are designed to pay only for fuel and purchased power. Again, over 65% of customer electric bills are used to pay for generation fuel and purchased power, and there has never been a rate increase by LUMA related to the operation of the Transmission and Distribution system over the last three years. 

Expanding Renewables to Minimize Future Fuel Cost Increases

To help minimize the future increases caused by generation fuel prices, LUMA continues to advance the adoption of renewables in Puerto Rico. In the past three years, LUMA has helped connect more than 100,000 residential homes to rooftop solar, representing 650 MW of clean energy, the most in Puerto Rico’s history. LUMA is also actively working to interconnect more utility scale renewable energy and batteries, both of which will help to reduce use of more expensive fuel.

Supporting Customers

LUMA remains committed to supporting and serving customers who may be concerned about paying their bills. While LUMA is not able to control the increase of fuel prices on customer bills, the company is determined to help customers who may face financial struggles with a payment plan or by connecting those who qualify to government assistance programs or subsidized rates. Customers are encouraged to find more information by visiting lumapr.com, calling 1-844-888-LUMA (5862) or stopping by any of LUMA’s customer service centers.

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, clean, and affordable electrical service they deserve. As a customer-centric company, LUMA’s entire workforce is focused on safely delivering an exceptional customer service experience to its 1.5 million customers.