As has been reported previously, generation fuel costs are unrelated to LUMA operations
San Juan, Puerto Rico – Today, LUMA reported calculations for the adjustment for fuel and purchased power costs to the Puerto Rico Energy Bureau (PREB) indicating a potential increase to customer rates, based on information provided by GeneraPR and Independent Power Producers (IPPs) regarding the cost of generation fuel and purchased power used by their generation facilities. When combined with the approved annual factors for the Contribution in Lieu of Taxes paid to municipalities, subsidies for certain classes of customers and energy efficiency, the potential increase for most customers beginning in July would be 1.4 cents.
LUMA is not a generation operator. LUMA’s sole role is to calculate fuel and purchased power costs based on the information provided by GeneraPR and IPPs. The PREB determines any tariff adjustment, and LUMA does not add any costs to or financially benefit from the adjustment as it is an expense to pay for fuel and purchased power.
“As reported, increased fuel cost is due to the impact of fuel consumption and fuel mix utilized by island generators. While LUMA does not generate electricity, nor do we purchase fuel, or have any control over generation fuel costs – that is solely the responsibility of the generators – we are determined to do what we can to help our customers by prioritizing the transition to renewable energy and promoting available customer assistance programs,” said Juan Saca, LUMA President and CEO.
Why Fuel Costs Are Rising
Puerto Rico’s generation plants remain heavily dependent on diesel and bunker fuels to generate electricity. As global fuel costs and generation fuel consumption fluctuate, there is a formal regulatory process for adjusting customer rates accordingly once the generators provide the data on fuel use and costs to LUMA. This quarter, several factors impacted fuel costs including:
- A 15% increase in fuel consumption driven by higher demand from seasonality and a higher use of generation units during peak hours that require more expensive fuel;
- Natural gas shortages at the Costa Sur and Ecoeléctrica power plants, leading to an increased consumption of more expensive liquid fuels, and
- A considerable increase in LNG fuel consumed to supply the former FEMA generators.
Expanding Renewables to Minimize Future Fuel Cost Impacts
To help minimize the future impact of global fuel prices, LUMA remains committed to advancing the adoption of renewables in Puerto Rico. In the past three years, LUMA has connected more than 91,000 residential homes to rooftop solar, helping customers save money and advance the clean energy transformation. Together, these solar customers produce over 585 MW for the grid.
Supporting Customers
While LUMA is not able to control the impact 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. More information is available at lumapr.com or by 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.
