LUMA Seeks $500 Million FEMA Reallocation

Private operator wants to reactivate stalled T&D projects

LUMA Energy has asked the Puerto Rico Energy Bureau to approve a major amendment to the island’s FEMA reconstruction plan that would free up $500 million for inactive transmission and distribution projects, many of which already carry incurred costs but remain outside the active FEMA pipeline.

In a motion filed May 22, LUMA submitted Attachment C, a proposal to reduce the FEMA FAASt Global Equipment and Materials allocation from $1.66 billion to $1.16 billion. According to the filing, the current allocation exceeds LUMA’s confirmed contractual commitments, and the reduction would realign the budget with actual obligations. The freed funds would then be redirected to reactivate priority projects that were sidelined earlier this year when the Energy Bureau cut the active T&D portfolio from 571 to 282 projects.

The filing stems from the Energy Bureau’s February 5 and February 11 orders, which required LUMA, PREPA, and Genera PR to reconcile overlapping costs, identify duplicative FEMA funding, and reallocate resources to high‑priority projects. LUMA’s latest submission positions Attachment C as the next step in that process, describing it as an integrated strategy to maximize Section 428 funding, advance grid resilience, and minimize ratepayer exposure.

LUMA argues that many of the projects listed in Attachment C have already incurred equipment and materials costs and must be returned to the FEMA FAASt pipeline to allow federal review, obligation, and reimbursement. The company notes that reactivating these projects through the proposed amendment would reduce the risk that unreimbursed expenses fall on ratepayers. It also emphasizes that all amounts remain subject to FEMA and COR3 review and that no funding becomes effective until FEMA obligates it through the Public Assistance program.

Under the proposed reallocation, the child project allocation would increase from $3.09 billion to $4.23 billion, while the Global E&M allocation would decrease to $1.16 billion. The Global A&E allocation would remain at $965 million, and the total Section 428 allocation would stay at $6.35 billion. LUMA states that this adjustment ensures compliance with FEMA allowability requirements and aligns federal resources with actual project needs.

If the Energy Bureau approves the amendment, LUMA will submit the revised allocations to FEMA and COR3 for versioning. Only after FEMA completes its eligibility and cost‑reasonableness reviews can the projects identified in Attachment C move forward. LUMA is also asking the regulator to confirm that the released funding may be redeployed to eligible child projects under Section 428, a step the company says is necessary to maximize federal funds and minimize the financial impact on customers.

LUMA Energy has also asked PREB to fast‑track approval of a new FEMA-funded transmission project connecting the Costa Sur power plant to the Garzas substations, while also requesting that key portions of the filing remain confidential due to the presence of Critical Energy Infrastructure Information (CEII).

In a motion filed May 26, LUMA submitted an Initial Scope of Work (SOW) for the rebuild of Line 8700, a 7.7‑mile, 38‑kV transmission corridor identified as a near‑term priority in the `utility’s system restoration plans. The project would repair, restore, or replace damaged and interdependent components along the line, which runs from the Costa Sur power plant through Garzas 2HP and Garzas 1HP. According to the filing, the work may include replacing up to 60 structures, installing new conductor and optical ground wire, and upgrading breakers at multiple substations.

“This SOW… will consist of repairing, restoring, or replacing damaged elements and functionally interdependent non‑damaged elements of the overhead portions of the line,” the document states. LUMA notes that the rebuild could also enable a potential black‑start capability at Costa Sur, a feature that would allow the plant to restart independently after a system-wide outage.

The project carries an estimated cost of $36.5 million, including $4.87 million for architectural and engineering design and $31.7 million for procurement and construction. The work is being advanced under FEMA’s Public Assistance Alternative Procedures (Section 428), with additional hazard mitigation measures to be developed under Section 406.