LUMA Energy — responsible for the nation’s electricity transmission and distribution system — today asked the Puerto Rico Bureau of Energy (PREB) to raise 4,955 cents per kilowatt-hour (kWh) or 17.1% in residential customer bills for the third quarter. 2022.
At a press conference, the company’s chief regulatory officer, Mario Hurtado, today, Tuesday, along with Nuriet Figueroa Melendez, Director of Customer Voice, and Melissa Puyo, Account Manager, validated the information and announced that the company today submitted fuel cost calculations adjustment to PREB.
That’s, based on energy-purchased fuel costs from the previous quarter for Electric Power Authority (PREPA) and forecasts for July-September 2022, the next quarter. Now it is up to PREB to assess the request and decide if it agrees to the rate increase.
If this happens, the increase will take effect on July 1 and will be in effect until September 30. This will be the seventh consecutive quarterly increase in the electricity service bill, at a time when the same company acknowledges that there are more than 10,000 customers with payment agreements.
Regarding the presentation of the generation fuel cost adjustments that LUMA made today before PREB, Hurtado explained that the cost of power generation fuel in Puerto Rico increased nearly 30% in the last quarter.
“Based on these generation factors and other factors presented to the office, we estimate that based on the always final PREB decision, there will be a potential increase of about four cents per kWh in the rate and total cost in the monthly bill for a customer’s residential home. Typically that would increase by 17%,” he emphasized. Hurtado, in the middle of the press conference.
In this context, the company official indicated that all such adjustments are determined by PREB and that all estimates are subject to the decision of the independent regulator. Hurtado realized that these changes would have a significant impact on all LUMA clients.
“The factors submitted to the PREB for fuel are 4.1, which is what was introduced today. In addition, there is an annual adjustment for contributions in lieu of taxes from municipalities and subsidies that exist for different consumer groups and this adjustment will be 0.8 cents. From there, from this amount, the total will be 4,955 cents,” Hurtado said.
If this change were to materialize, the cost per kWh would rise from 29.04 to 33.99 cents. However, the press conference did not specify how much this will affect commercial and industrial customers.
“All of us at LUMA are concerned about the impact and impact of the increase in the cost of fuel generation on all customers in Puerto Rico. As everyone knows, LUMA does not generate power nor is it responsible for the impact of increased rates related to fuel used by PREPA and other generators,” Hurtado said.
He stated that LUMA’s primary responsibility is to calculate the costs of fuel and energy purchases based on information on those items provided by PREPA. “LUMA does not decide fuel prices. These are set by global markets. Global fuel prices have skyrocketed.”
He said that this was due to several reasons: increased demand, production of supply, delays in global production and, above all, the current conflict between Ukraine and Russia. “LUMA does not determine or control how increases in fuel costs will affect prices or customer bills, since it is PREB that sets prices,” he added.
“Although we are not responsible for these fuel costs, we are focused on our customers and that is why we are committed to helping all those affected by the increase in these costs and their families… We have taken a series of measures to support our customers affected by the rise in these costs,” Hurtado emphasized.
Without affecting the cessation of raw food
Hurtado, responding to a reporter’s questions about the effect, if any, of the 45-day moratorium on the estimate of gasoline and diesel use, known as crudeta, on the energy rating, replied: “In this case, no.”
“This tax does not affect the purchase of fuel by PREPA. PREPA is already exempt from this tax precisely because this fuel is used for electricity distribution. Unfortunately, in this case, this measure and this policy will not have a direct effect,” he admitted.
25,000 customers have solar energy
He emphasized that LUMA is committed to reducing Puerto Rico’s dependence on fossil fuels used for power generation at the aggregate level. For this reason, he noted that they have taken measures to promote the use of renewable energy on the island, and emphasized that in the past twelve months they have connected more than 25,000 customers with residential and net metered solar energy.
“This means that we have activated approximately 2,100 customers per month, which is a rate we have not seen before in Puerto Rico. In fact, in one year we have connected roughly what has been connected in the past decade to net metering and residential solar. This means that these customers can mitigate Part of this cost increase is because they generate their own energy or part of it,” Hurtado said.
Puyo, for his part, supported the statements regarding concern about the impact of rising fuel costs on customers’ electricity bill. Currently, LUMA has 1.5 million customers.
He noted that LUMA has provided more than $31.1 million in financial assistance from the Low Income Home Energy Assistance Program (LIHEAP), the Rental Assistance Program, and other financial assistance programs available to provide support to those in need.
Meanwhile, Figueroa Melendez reported that LUMA offers specific programs to help people pay their electricity bills. “For example, we are working with customers who may have difficulty paying their electricity bill and need payment flexibility by creating different payment plan options,” Figueroa Melendez said.
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