Reality without LUMA

Op-Ed by the members of the Oversight Board:
David Skeel, Betty Rosa, John Nixon, Justin Peterson, Antonio Medina, Andrew Biggs y Arthur J. González.

This column was originally published in Spanish by El Nuevo Día on May 12, 2021.

Imagining Puerto Rico without LUMA Energy. This is what the president of UTIER recently asked us all to think about. Imagine. It does not require much imagination. Every Puerto Rican lives, not imagines, Puerto Rico without LUMA Energy every single day.

While thousands of Puerto Ricans are applying for jobs at LUMA Energy so they can be part of the future of Puerto Rico rather than be stuck in the past, and LUMA Energy is preparing to take over the management of the grid next month, let us take a quick look at the reality we are leaving behind when the transition of Puerto Rico’s energy system truly begins.

The reality without LUMA Energy is this: If we want reliable electricity, we must keep a generator in our back yard ready to start at any moment. Puerto Rico households and businesses lose power on average once every five to six weeks, compared to about once a year for the average electricity customer elsewhere in the U.S. Some of us aren’t that lucky and lose power at least once every week.

PREPA customers can expect to have no electricity for five hours every three months. In 2020, PREPA reported 417 power outages due to equipment failures, disruption in the power plant, or other operator errors. In addition, every rainstorm is a problem for PREPA, because the vegetation around power lines is not properly maintained to prevent damage to the grid from falling branches and trees.

In addition, PREPA employees reported five times more workplace related incidents than industry peers in other parts of the United States. In the last six months of 2020 alone, PREPA reported 203 employee safety incidents and injuries.

Already, PREPA has shown that private operators improve management. PREPA outsourced some customer service calls to private call centers, and customer wait times fell from an average 30 minutes to five minutes. If your call happens to go to a PREPA call center rather than a private one, your call is 30% more likely to be dropped and you still wait twice as long for your call to be answered.

The reality without LUMA Energy is what we have.

Instead, imagine what LUMA Energy will do to cut power outages and improve customer service, simply because it is contractually obligated to do so and its pay is partly based on how well it improves service and reliability under metrics set not by LUMA Energy but by our energy regulator, the Puerto Rico Energy Bureau. What incentives does PREPA have to change for the better? None.

UTIER claims that LUMA Energy will take money from PREPA’s pensions. That is false. It is PREPA that woefully neglected its own pensions, which are currently less than 20% funded, putting its entire retirement system at risk of insolvency.

Ever since the agreement between the Private Public Partnership Authority and LUMA Energy was announced last year, UTIER has made inaccurate and false accusations based on alternative facts rather than reality. UTIER has offered no alternative to improve PREPA and Puerto Rico’s power grid. UTIER says transformation is possible without LUMA Energy. It does not say how. It does not say when. What UTIER offers is to keep things the way they are.

PREPA had its chance. We think Puerto Rico deserves better. We deserve electricity even when it rains. We deserve to speak to someone when we call. LUMA Energy will help make this transformation happen.

Imagine Puerto Rico with LUMA Energy.

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