San Juan, PR – September 28, 2025 – The Financial Oversight and Management Board for Puerto Rico today issued the following statement:
The Puerto Rico energy system was mismanaged by the Puerto Rico Electric Power Authority for decades. Engaging private operators to manage the grid and the power plants is a critical element of Puerto Rico’s energy transformation enshrined in Puerto Rico law and incorporated in the PREPA Fiscal Plan.
This transformation is based on accountability. Electricity in Puerto Rico is not yet reliable. LUMA Energy, as the private operator of PREPA’s grid, must perform better, and the people of Puerto Rico, who retain ownership of the grid and power plants, have every right to hold private operators accountable to the terms of the respective operating and management agreements.
The Oversight Board does not take a position on the merits of whether six issues recently identified by the Puerto Rico Public-Private Partnerships Authority are Disputes or Technical Disputes under the terms of the operating and management agreement between P3A and LUMA. The Oversight Board is not a party to the OMA. P3A selected LUMA and remains responsible for enforcing the OMA terms. The Oversight Board reviewed and approved the OMA under its contract review policy in accordance with PROMESA to ensure the procurement process promoted market competition and the terms are consistent with the PREPA Fiscal Plan irrespective of the operator selected.
The outcome of the litigation around these six issues, however, is inextricably linked with PREPA’s debt restructuring under the on-going Title III of PROMESA, which, like the private operators, is a critical element of Puerto Rico’s energy transformation overall.
The proposed PREPA Plan of Adjustment requires for its implementation that PREPA’s grid and power plants be operated by private operators. Given the OMA’s relevance to the Title III case, the Oversight Board supports the position that the U.S. District Court for the District of Puerto Rico has subject matter jurisdiction over this proceeding and is the appropriate forum to decide the matter.