Utility’s contract extended in Puerto Rico

SAN JUAN, Puerto Rico — A heavily criticized private company that operates the transmission and distribution of power in Puerto Rico secured a last-minute extension on its contract Wednesday despite widespread objections.

Luma Energy won a 4-1 vote of the Puerto Rico Electric Power Authority’s board, with the dissenting vote cast by the member representing the public interest. Luma will be paid about $122 million next year, up from the $115 million it has received so far.

The approval comes amid worsening power failures that prompted the U.S. government to intervene this month and start securing barges and land-based generators to ease blackouts. Crews have started to rebuild the power grid that Hurricane Maria razed in 2017, with only emergency repairs made until now.

Luma, a consortium of Calgary, Alberta-based Atco and Quanta Services Inc. of Houston, was awarded the contract in June 2021, taking over crumbling infrastructure resulting from decades of neglect and mismanagement.

But the duration of power failures has only worsened, and Luma has faced heavy scrutiny and calls for its contract to be canceled by customers who have been hit with seven electric rate increases in one year while often left in the dark. Several substations have caught fire in recent months, with Luma on occasion blaming bad weather, seaweed and even an iguana, as well as the aging infrastructure.

The company celebrated the contract extension, saying that “despite an array of inherited challenges, Luma has made significant progress over the last 18 months addressing key infrastructure challenges, as well as improving the reliability and resiliency of the system.”