Statement regarding proposed electric service rate adjustment

San Juan, Puerto Rico, September 8, 2021— LUMA, acting on behalf of the Puerto Rico Electric Power Authority (PREPA), presented a request for a rate adjustment to the Puerto Rico Energy Bureau (PREB) on August 13. LUMA, in accordance with the contract to operate the electric power transmission and distribution system, is required to submit said request to the PREB under regulation.

The request for adjustment is mainly due to costs related to the generation of energy.

LUMA does not establish the electricity service rate. That is the exclusive responsibility of the PREB, but LUMA is required by law to submit a request for a rate adjustment when there is a difference greater than $20 million between the combined sales invoiced for the purchase of fuel (“PPCA”) and power purchase (“FCA”) in balance with the actual costs of the fuel and power purchased, compared to the previous month. This difference was of $31.4 million in July 2021.

During a technical conference held on August 26, LUMA suggested to the PREB to not implement the adjustment in September and to consider postponing its implementation to soften the impact on customers. The PREB has not yet ruled on the proposed adjustment. Later this month, the PREB is scheduled to review the costs of purchased power and fuel for August against the corresponding invoiced sales. At that time the PREB may revisit the potential adjustment for the PPCA and FCA.

Since June 1, 2021, LUMA has been responsible for the transmission and distribution of electric power in Puerto Rico. Power generation remains the responsibility of PREPA and other private generators. It should be noted that the rate changes have no impact on LUMA’s income, since the contract between the company, PREPA and the Authority for Public-Private Partnerships establishes a fixed payment for the operation and maintenance of the electric power transmission and distribution system in Puerto Rico.