Puerto Rico's power firm suspends $65 mn worth of maintenance projects

The private operator of Puerto Rico's power grid confirmed Monday the deferral of $65 million worth of maintenance and improvement projects in the US territory, with some repairs postponed for at least a year because of budget constraints, putting at risk the already troubled grid and sparking a widespread outcry.

Some of the deferred projects include maintenance of more than 100,000 light posts, fire mitigation and repairs on underground circuits, among other improvements.

Luma Energy's head of regulatory affairs, Mario Hurtado, told The Associated Press on Monday that the suspended projects, which he aims to bring back next year, risk more outages across the island.

 

The risk is always that there will be more failures in terms of public lighting, Hurtado said.

At a budget hearing on Friday, Hurtado said Luma Energy prioritized other tasks based on professional judgment, which they consider calculated risks. The lack of fire mitigation puts the grid at risk as hotter temperatures seize Puerto Rico, increasing the chances of wildfires disrupting power lines.

We make judgments based on what we have available and what our goals are, Hurtado said Friday. Although it entails a risk, it's an acceptable risk.

Luma's budget, proposed to Puerto Rico's Energy Bureau, includes $1.3 billion for the entire electrical sector, with 65 per cent allocated to Luma, which is in charge of transmission and distribution, 32 per cent to Genera PR, which operates and maintains the grid, and 3 per cent to the Puerto Rico Electric Power Authority.

The budget aims to inject funds into Luma's customer service, personnel safety and renewable energy projects.

Luma's announcement to defer millions of dollars' worth of projects amid chronic power outages has angered many.

It is unacceptable that Luma Energy can unilaterally decide to suspend crucial tasks, Jess Manuel Ortiz, a member of the House of Representatives who's also running for governor, said in a statement Monday. It is evident that Luma continues to fail in its responsibilities, and that no one in the Government of Puerto Rico is responsible.

The company confirmed a delay in funds disbursement from the Federal Emergency Management Agency on Friday. Luma has submitted about 400 projects for approval to upgrade the energy grid, and about 100 have been approved, Hurtado said.

The budget hearing comes as the island of 3.2 million people contends with frequent power outages more than six years after Hurricane Maria ravaged Puerto Rico as a Category 4 storm. The combination of storms, earthquakes and underinvestment has hindered recovery efforts.

A massive blackout in mid-June left over 340,000 customers in the capital, San Juan, and nearby cities without power during a heat wave. Prior to the blackout, towns in central and southern Puerto Rico were left without power for about five days after a transformer collapsed early June. The company restored the service on June 9, with some residents still experiencing sporadic outages last week.

Over the weekend, Luma shipped a transformer via boat from San Juan to the southern coastal city of Ponce and then transported it to the nearby town of Santa Isabel.

Governor Pedro Pierluisi activated the National Guard to help with the energy crisis and ordered an investigation into the June 13 blackout. The Energy Bureau is also investigating and has directed Luma and Genera PR to submit a plan to stabilize the island's electrical network.