Although he demands changes in the performance of the company LUMA Energy, Governor Pedro Pierluisi justified today the decision to extend the supplementary contract to the entity, which does not have a certain expiration date and is tied to the completion of the restructuring process of the debt of the Electric Power Authority (AEE), in the federal court.
In a press conference at the Convention Center, Pierluisi warned that the implications of the company leaving the power transmission and distribution system would be disastrous for the country. In addition, he recognized that the entity will receive a higher compensation as a result of inflation costs, among other factors, which would be around $122 million.
“Right now under the supplemental agreement, LUMA collected in this year, which just passed, around $115 million. For next year, there is an adjustment that is already provided in the contract itself, based on inflation costs, among other things, which then increases the amount to around $122 million,” said Pierluisi, at a press conference.
In a letter that the Fiscal Control Board sent to the government yesterday informing the extension of the supplemental agreement, it is mentioned that the amount assigned for fiscal year 2023 is $121.7 million. As such, the amount will be spent from the effective date of the proposed amendment, which is tomorrow December 1, as stated in the letter.
The extension of the contract occurs at a time when the governor himself acknowledges that PREPA’s bankruptcy process can end in two ways: the federal court confirms the Debt Adjustment Plan (PAD) or the petition of the PREPA is dismissed. restructuring that federal judge Laura Taylor Swain, in charge of the process, has before her consideration.
“If the court confirms a PAD for the Authority, then all the provisions of the 15-year contract between the Public-Private Alliances (APP), PREPA and LUMA, which was signed in mid-2020, will enter into force. At that time, the amount to the company and a system of bonuses or penalties will be established based on their performance”, he mentioned.
On the contrary, the federal court dismissed PREPA’s bankruptcy petition, explaining that LUMA will have to continue rendering its services in accordance with a transition plan that has already been agreed upon by the parties and approved by the Puerto Rico Energy Bureau ( PREB). “That last possible scenario has great risks for Puerto Rico,” she said.
With this, he referred to the fact that it could lead to the imposition of a trustee, whose main function would be to ensure payments to PREPA bondholders. She said that the important thing is that “we focus on what we all want: we all want to achieve the transformation of our electrical system to a modern, resilient one based on renewable energy sources.”
