LUMA Energy has escalated its confrontation with the Puerto Rico Electric Power Authority (PREPA), accusing the public utility of openly defying the Puerto Rico Energy Bureau’s (PREB) binding Fiscal Year 2026 budget order and short‑funding LUMA’s service accounts in violation of the Transmission and Distribution Operation and Maintenance Agreement.
In a motion filed May 28, LUMA says PREPA has not complied with the revenue requirement approved in PREB’s Final Order on Electricity Rates issued April 15, 2026, and instead deposited less than one‑twelfth of LUMA’s approved FY2026 budget, while simultaneously overfunding Genera PR. According to the filing, PREPA’s actions violate Section 7.5 of the T&D OMA, which requires PREPA to fund the Service Accounts monthly based on the regulator’s approved budget.
LUMA told the regulator that PREPA’s May 14 deposit was not a miscalculation but a direct breach of the Final Rates Order, which LUMA stresses is “not discretionary guidance” but a binding mandate. The company warned PREPA in writing the same day, stating that PREPA “did not use the Fiscal Year 2026 approved revenue requirement and budgets established in the Final Rates Order” and instead applied its own allocations—an act LUMA frames as unilateral, selective, and unlawful.
The operator is now asking the Energy Bureau to order PREPA to immediately implement the approved FY2026 budget for all purposes, including monthly funding calculations, and to cure the shortfall created by its noncompliance.
The motion marks yet another chapter in the power struggle between LUMA and PREPA—one that has increasingly spilled into the courts, the regulatory arena, and the political sphere.
The Puerto Rico government has pursued legal action to remove LUMA as operator of the transmission and distribution system, arguing that the company has failed to deliver reliable service. In early May, the U.S. District Court remanded the government’s lawsuits against LUMA back to Puerto Rico courts, a move the governor hailed as a validation of the government’s authority to hold LUMA accountable for service failures and contractual disputes. Meanwhile, LUMA and Genera have signaled dissatisfaction with PREB’s rate determinations, warning they may seek administrative review or court intervention after the regulator approved budgets far below what the operators requested.
Against that backdrop, LUMA’s latest motion frames PREPA’s refusal to follow the FY2026 budget order as part of a broader pattern of institutional resistance and operational dysfunction. The company argues that PREPA cannot “unilaterally disregard or selectively apply” PREB’s determinations and insists the regulator must step in to enforce compliance.
The Energy Bureau has not yet ruled on the request. PREPA did not immediately answer requests for comment.
