September 24, 2022

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House lawmakers demand answers from LUMA Energy regarding Puerto Rico’s failing electric grid

Dive Brief:

  • House Democrats in a Friday letter asked the head of Puerto Rico’s electric utility, LUMA Energy, for additional details on staffing levels, expenditures, executive compensation and a stretch of power outages that have occurred since the company took over grid operations from the Puerto Rico Electric Power Authority (PREPA) this summer.
  • The questions follow a hearing Wednesday in which LUMA President and CEO Wayne Stensby called the island’s electric system “arguably the worst in the U.S.” but declined to answer questions regarding utility salaries and could not provide statistics on the experience levels of the company’s line workers. Lawmakers said one reason for LUMA’s struggles has been the utility’s low staffing levels.
  • The utility, owned by ATCO and Quanta Services, is making progress on partnerships to restore the island’s grid, announcing on Monday a deal with a local electric industry cooperative for more than 100 workers to work with LUMA in grid restoration activities.

Dive Insight:

Since LUMA took over Puerto Rico’s grid in June “conditions have worsened,” lawmakers said in their letter demanding answers. “One potential reason for these issues has been the size and experience of LUMA’s workforce.”

The “issues” they point to include a substation fire that knocked out power to 800,000 customers and service complaints being more than twice as frequent as they were under PREPA.

Puerto Rico’s grid is “widely-known to be out of date, fragile, and unique among grids in the US. Those with the most experience in running and repairing the grid would be more likely to anticipate, prevent, and quickly mitigate problems that could result in outages,” Rep. Katie Porter, D-Calif., and Rep. Raúl Grijalva, D-Ariz., wrote in their joint letter to LUMA’s Stensby. “A shortage of workers would translate into longer response and repair times.”

Porter is chair of the House Subcommittee on Oversight and Investigations; Grijalva is chair of the House Committee on Natural Resources.

The worker shortage was a point of focus in Wednesday’s hearing, which examined the transition from PREPA to LUMA’s service. Agustín Irizarry-Rivera, a professor of electrical engineering at the University of Puerto Rico at Mayagüez, asked the committee to investigate “the lack of trained personnel to properly operate the electric system.”

According to the lawmakers’ letter, more than 3,000 of the 4,200 PREPA employees eligible to be transitioned “did not move to LUMA and instead transferred to other departments in the Puerto Rican government.”

The lawmakers have asked the utility for a detailed breakdown of the number of employees and their experience levels across a variety of positions including line workers, control center operators and substation technicians. Other requests include documents related to the summer outages, power plant maintenance, staffing and recruitment, and “documents sufficient to show the compensation packages for, and titles of, LUMA employees for whom total compensation exceeds $200,000.”

LUMA is making progress in fielding more workers to repair Puerto Rico’s aging system. On Monday the utility announced it has signed an agreement with the Cooperative of Professionals of the Electrical Industry of Puerto Rico and the Caribbean (Electricoop) to “restore the electricity grid.”

The agreement “will contribute to the work already underway by LUMA in the stabilization and restoration of the power transmission and distribution system,” LUMA External Affairs Advisor José Pérez Vélez said in a statement.

Some observers, however, doubt that Electricoop has the expertise LUMA requires.

“It does not appear that they are trained linemen, which is really what LUMA needs,” Cathy Kunkel, formerly an analyst at Institute for Energy Economics and Financial Analysis, said in an email. Kunkel now works with CAMBIO PR, which promotes sustainable solutions for Puerto Rico.

The island’s electric system was destroyed in 2017 by Hurricane Maria, and efforts to rebuild and modernize it are underway. The Federal Emergency Management Agency has authorized $9.6 billion to assist in those efforts and projects are beginning to roll out.

While PREPA continues to own the island’s power plants, LUMA operates the distribution and transmission system through a public-private partnership designed to save customers money, improve the grid’s resilience and add renewable power. But there are growing doubts about the agreement.

NBC Nightly News covered Puerto Rico’s power woes on Monday, reporting the grid is in “critical condition” and PREPA is “under fire.”

One resident told NBC their power bills are more than 50% higher under LUMA, but with degraded service. Meanwhile, utility CEO Stensby touted the company’s work on customer service and promised “this will get better.”

Lawmakers note that despite LUMA’s problems, the utility has already attempted to increase rates “notwithstanding promises to keep them constant for the first three years of operation.” The Puerto Rico Energy Bureau recently rejected LUMA’s request to recover $52 million in additional fuel and other costs in June and July.