The Puerto Rico Energy Bureau (PREB) has issued a sweeping order this week that reshapes the FY2027 budget framework for the island’s electric system while simultaneously taking up a separate dispute over who must pay for procurement work tied to temporary generation. The two developments—one involving the allocation of nearly $100 million in surplus funds, […]
The Puerto Rico Energy Bureau (PREB) has issued a sweeping order this week that reshapes the FY2027 budget framework for the island’s electric system while simultaneously taking up a separate dispute over who must pay for procurement work tied to temporary generation.
The two developments—one involving the allocation of nearly $100 million in surplus funds, the other a $369,000 unpaid invoice—underscore the mounting financial and operational pressures facing LUMA Energy, Genera PR, and the Puerto Rico Electric Power Authority (PREPA).
In a June 15 Resolution and Order, the Bureau approved the creation of new contingency reserve accounts totaling $61 million for LUMA and Genera, funded from the FY2026 reconciliation surplus of $98.7 million. LUMA and Genera will each receive $30 million, while PREPA will receive $1 million. The PREB said the reserves are necessary to ensure the companies can respond quickly to extraordinary events such as hurricanes, catastrophic equipment failures, and major unplanned outages.
“Experience has demonstrated that the electric system is exposed not only to hurricane-related and severe weather events, but also to other extraordinary, unexpected operational, infrastructure, and reliability events,” the Bureau wrote, calling the reserves a “prudent and beneficial use” of the surplus.
The accounts are designated as funding sources of last resort. Companies may draw from them without prior approval but must file detailed monthly reports justifying each expenditure and explaining why it could not be covered through existing budgets or other funding sources. The Bureau warned it may disallow improper charges and require funds to be restored.
After establishing the reserves, roughly $37.7 million of the FY26 surplus remains unallocated. The Bureau said it will determine the disposition of those funds after reviewing additional information that Genera is now authorized to submit.
3PPO Seeks Intervention in Related Budget Dispute
The following day, on June 16, the Third-Party Procurement Office (3PPO) filed a motion seeking to intervene in the same docket—NEPR‑MI‑2021‑0004—to defend the validity of a $369,130.54 invoice that Genera has refused to process. The invoice covers procurement work performed for the Temporary Power Generation Request for Proposals (TPG RFP), which the Bureau ordered to be conducted through the 3PPO due to Genera’s conflict of interest arising from its affiliation with NFEnergia. The TPG-RFP sought to secure 800MW of power capacity.
Genera has asked the Bureau to relieve it of the obligation to pay the invoice, arguing that the costs fall outside the Operations and Maintenance Agreement (OMA). The 3PPO counters that the procurement work was mandated by both the OMA and the Bureau’s own orders, making the costs valid Pass‑Through Expenditures that Genera must process through its approved budget.
“The 3PPO Invoices represent actual, documented, and reasonable costs incurred… in direct compliance with contractual obligations and this Bureau’s own orders,” the filing states.
The 3PPO aligned itself fully with the Public‑Private Partnerships Authority (P3A), which has already opposed Genera’s position. It argued that an invoice exceeding the cap in the Memorandum of Understanding does not eliminate the payment obligation; rather, it triggers the budget‑amendment mechanism under the OMA.
The office asked the Bureau to authorize payment—either outright or subject to a prudence review—and to reject Genera’s attempt to characterize the payment as a “voluntary accommodation.”
