Regulator Notes $39 Million Shortfall to LUMA
The Puerto Rico Energy Bureau (PREB) has ordered the Puerto Rico Electric Power Authority (PREPA) to fund LUMA Energy and Genera’s service and reserve accounts in accordance with the approved budget.
The PREB directed PREPA to transfer $39.15 million to LUMA by July 31 after determining that recent payments fell short of the levels required under the April 15 Final Rate Order. The decision, issued July 13, seeks to correct months of underfunding that regulators say violated the Transmission and Distribution Operation and Maintenance Agreement (T&D OMA) and contributed to growing liquidity pressures across the system.
LUMA is the private operator of PREPA’s transmission and distribution system, while Genera operates the utility’s legacy power plants.
The PREB found that PREPA continued to rely on the Provisional Budget rather than the Fiscal Year 2026 amounts approved by regulators and certified by the Financial Oversight and Management Board. The shortfall for May and June alone exceeds $39 million. PREPA must reconcile the discrepancy, fund newly established contingency reserves—$30 million each for LUMA and Genera and $1 million for PREPA—and begin monthly compliance reporting at the end of July. Regulators cautioned that failure to meet these requirements may result in fines and administrative sanctions.
The order aligns with concerns LUMA raised months earlier in testimony before the House Government Committee in October 2025, where the operator detailed the financial and operational strain caused by PREPA’s sustained noncompliance. LUMA told lawmakers that PREPA had failed to fund essential service accounts, including the Emergency Interruption Reserve Account, which has remained unfunded since 2023. As a result, LUMA said it was forced to redirect more than $225 million from its operational budget to cover emergency response costs. The diversion led to postponed or canceled maintenance and modernization projects, and suppliers began suspending services due to unpaid invoices totaling more than $200 million.
“The current liquidity crisis is not the result of a lack of revenues, but of PREPA’s deliberate decision to withhold funds, in violation of the T&D OMA and the approved budgets,” former LUMA president and CEO Juan Saca testified at the time. “PREPA’s continued failure to provide funding is limiting our ability to advance critical work that directly benefits customers.”
As the Bureau moves to enforce the rate‑case directives, LUMA is also seeking more time to complete a major filing tied to Puerto Rico’s long‑term grid reconstruction. In a July 10 motion, the operator requested a one‑month extension—until August 17—to submit the comprehensive list of more than 300 inactive transmission and distribution projects required under the Bureau’s June 18 order. LUMA said it will meet most of the July 15 reporting requirements but cannot finalize the detailed cost and prioritization analysis for the inactive projects by that date.
