The order follows a July 2025 court ruling that set limits on CELI eligibility
Puerto Rico’s Energy Bureau has moved to tighten and standardize how municipalities apply the Contribution in Lieu of Taxes (CELI), issuing a Resolution and Order that sets uniform administrative directives for all 78 municipalities.
The measure aims to eliminate long-standing inconsistencies in how towns classify their facilities under Regulation 8818, the rule governing the electric-service credit municipalities receive in lieu of tax revenue the Puerto Rico Electric Power Authority would otherwise owe. The Bureau emphasized that the new guidance does not amend the regulation itself but instead ensures consistent compliance with its provisions, following a series of judicial and administrative determinations that exposed uneven application across the island.
Under the new directives, municipalities must conduct a comprehensive review of their properties, installations, and municipal entities to determine which operate exclusively for nonprofit public purposes, which host for-profit activities, and which qualify as mixed-use facilities. The Resolution reiterates the annual compliance calendar already embedded in Regulation 8818: municipalities must submit all required classification information to LUMA by December 31 each year or risk losing CELI coverage for those facilities in the following fiscal cycle. LUMA must then notify municipalities of the classifications by March 31 and submit its report to the Energy Bureau and the Office of Energy Public Policy (OEPPE), which is responsible for issuing the maximum CELI allotment by April 15.
The Bureau also addressed mixed-use facilities without separate meters, directing municipalities to pursue measurement segregation so that for-profit consumption can be billed separately. It reaffirmed that all energy use attributable to for-profit activities remains excluded from CELI, including consumption recorded before segregation. When technical data is insufficient to quantify that consumption, the Bureau may rely on the estimation-by-analogy method already contemplated in the regulation. The Resolution underscores that these obligations, along with the rest of Regulation 8818, apply continuously to all current and future municipal facilities.
The new guidance follows a July 2025 ruling by the Puerto Rico Court of Appeals that modified Energy Bureau determinations for Bayamón and Guaynabo and clarified the limits of CELI eligibility. The court upheld the Bureau’s conclusion that several municipal facilities operated predominantly for public, nonprofit purposes and therefore qualified for CELI, but rejected the regulator’s attempt to include past consumption from mixed-use facilities in the subsidy. The judges held that for-profit consumption must remain excluded unless a municipality formally requests an exception under Regulation 8818, and that CELI eligibility cannot be presumed to continue indefinitely without annual review. The decision required the Bureau to revisit how for-profit consumption should be measured and billed for fiscal years 2016 through 2020, reinforcing the need for the uniform procedures now outlined in the new Resolution and Order.
