Why are some Puerto Ricans demanding the island cancel its contract with power company LUMA Energy?

Story at a glance

• A recent protest in San Juan, Puerto Rico, made headlines late last month after police officers clashed with demonstrators.

• Protesters gathered outside of the Governor’s Mansion in Old San Juan to protest the island’s contract with LUMA Energy.

• LUMA has overseen Puerto Rico’s energy transmission and distribution since last June.

Over the last 13 months, Puerto Ricans have repeatedly taken to the streets to protest LUMA Energy, the private company that controls the island’s energy transmission and distribution, as frequent blackouts and high energy costs become more burdensome.

One of the most recent demonstrations took place late last month with hundreds of protesters gathering outside of the Governor’s Mansion in Old San Juan demanding that the island’s contract with the private energy company be canceled.

The demonstration took a violent turn after police discharged tear gas into a crowd, clashed with protesters and appeared to attack a photojournalist covering the gathering.

“We share the frustration our customers have over the fragile nature of Puerto Rico’s electric system, which has suffered from years – if not decades of mismanagement and neglect by the prior operator,” a LUMA spokesperson said in an email to Changing America.

“The 3,000 men and women of LUMA are determined to rebuild the energy system and in just a little over a year, they have made significant progress in rebuilding, repairing and restoring the grid, including replacing thousands of poles, connecting tens of thousands of customers to solar and improving customer service.”

In a press conference the day after the protest, Puerto Rico Police Commissioner Antonio Lopez blamed a small group of protesters at the Aug. 25 demonstration for attacking officers with rocks and other objects and promised that the incident with the photojournalist would be investigated.

LUMA has been in Puerto Rico since June of 2021 and was contracted to work with the Puerto Rico Electric Power Authority (PREPA) in managing the island’s power. PREPA is now solely responsible for electricity generation while LUMA oversees transmission and distribution.

The company, which is a consortium between the Canadian company ATCO and Houston-based Quanta Services, was awarded a 15-year-contract to provide electricity and make desperately needed upgrades to the island’s fragile power grid, which was devastated by Hurricane Maria in 2018.

But while LUMA’s presence was meant to help an island still reeling from the aftermath of deadly hurricanes Maria and Irma, it has struggled so far to make life easier for millions of Puerto Ricans, critics say.

So why are people so frustrated with LUMA?

Job losses and alleged worse working conditions

Thousands of PREPA line workers lost their jobs or transferred to other government departments following the LUMA contract. The president of UTIER, the union that represents PREPA workers, told The Washington Post members were offered jobs with LUMA but many opted to not join the private company due to what they considered were poorer working conditions. Many would lose pension benefits, seniority or have their health care plans changed, he told the outlet.

Yet many of LUMA’s 3,000 workers are former PREPA employees, a LUMA spokesperson told Changing America.

The LUMA spokesperson did confirm that some former PREPA employees who chose to be transferred to another government position were assigned to jobs that they were not qualified for, like custodial work at schools.

Frequent (and long) blackouts

Puerto Rico suffered power outages before LUMA Energy arrived on the scene. And the company was contracted specifically to help fix Puerto Rico’s fragile power grid. But islanders continue to be plagued with power outages and blackouts sometimes lasting for days with the private company at the helm.

One particularly bad power outage occurred in the spring. In April, at least 500,000 people on the island were left without electricity after a fire broke out at a main power plant in Guayanilla, a city in the southwest of the island. People were left without electricity for three to five days causing the island’s education department to cancel classes for students and for courts to close. The outage also forced some businesses to close early since they couldn’t afford the cost of running a generator, and an intensive care unit at a major hospital in the city of Mayaguez was left without power.

A spokesperson from LUMA argued that no true blackout, where 100 percent of the island is in darkness, has occurred under the company’s watch and that the April 6 outage was “irregular.”

There is an ongoing investigation into what happened at the plant to cause the outage, according to the LUMA spokesperson. They added that outages like what happened in the Costa Sur plant are things that LUMA workers are constantly trying to prevent.

Energy cost hikes

Electricity bills have repeatedly gone up in Puerto Rico since LUMA arrived. In July, the company announced, on the behalf of PREPA, its seventh consecutive monthly bill increase this year, bumping prices to 34 cents per kilowatt hour. The company did announce its first rate decrease ever last month, a reduction of 2.75 cents per kilowatt hour. But the lower price will only last two months.

Increases in electricity costs stem from rising fuel prices, a LUMA spokesperson said.

An average household consumes 800 kilowatt-hours of electricity a month on the island. And power bills of more than $200 a month are a burden for the 43 percent of the island’s 3.2 million residents that live below the poverty line.

The U.S. national average for electricity is about 15 cents per kilowatt-hour.

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