Supreme Court keeps all LUMA filings but tells government to stop submitting more
The court denied several government motions and warned all parties against further filings without its request, while reiterating it has not ruled on the merits of the attempt to cancel LUMA's contract extension.
File photoThe short version
- The Supreme Court issued a resolution Tuesday keeping all documents submitted by the government, PREPA, AAPP and LUMA in the record without deciding on their merits or validity, according to El Vocero
- The court admonished the government for filing a motion opposing LUMA documents and another exceeding page limits, instructing all parties to refrain from additional submissions unless requested, Primera Hora reported
- Government energy czar Josué Colón Ortiz said the ruling does not accept LUMA's arguments, including its $1.3 billion claim if the extension is voided, and reiterated that the extension was made without required legal steps, per El Vocero
- The government maintains that voiding the extension would end the LUMA contract per its terms and allow transition to another private operator, El Vocero reported
Updates
Update, Oct 21, 2:31 PM AST
Supreme Court issued a resolution keeping all documents in the record but admonishing the government not to file further submissions without permission.
El Vocero reported that on Tuesday the Supreme Court of Puerto Rico ruled to keep in the record all pleadings submitted by the government, the Puerto Rico Public-Private Partnerships Authority, PREPA and LUMA Energy, despite the government's request to withdraw certain LUMA documents. The resolution explicitly states it does not adjudicate the merits, relevance or legal validity of the filings. El Vocero reported
The government, through AAPP executive director and energy czar Josué Colón Ortiz, reiterated its position that the LUMA contract extension letter is null because it was executed without complying with legal requirements. Colón Ortiz stated that if the extension is declared void, the original contract would end according to its terms and allow an orderly transition to another private operator. He added that the court's order not to file additional writings applies to all parties. El Vocero reported
Primera Hora reported that the Supreme Court denied several government motions, including one opposing LUMA documents and another that exceeded the court's page limit, and warned the government: "Se les instruye abstenerse de presentar escritos posteriores, salvo que este Tribunal así lo solicite." The resolution clarifies it does not constitute a ruling on the merits of the case to cancel the supplemental agreement that extended LUMA's operation of the transmission and distribution system. Primera Hora reported
Board opposes contract termination
The Junta de Supervisión Fiscal (JSF) opposed the cancellation of LUMA Energy's contract to operate Puerto Rico's transmission and distribution system. In a motion filed Tuesday, the board asked the Supreme Court of Puerto Rico for permission to appear as friend of the court in the consolidated cases brought by the Puerto Rico Public-Private Partnerships Authority, the Puerto Rico Electric Power Authority (PREPA), Governor Jenniffer González and the government against LUMA Energy. Metro Puerto Rico reported.
The JSF warned that a decision in favor of the government would force PREPA to resume operation of the electric grid, for which it lacks the necessary resources. The board argued that Puerto Rico legislation, the certified fiscal plan for PREPA and the proposed adjustment plan in the utility's bankruptcy case all require a private company to operate the grid. Returning operations to PREPA, even temporarily, would be illegal, violate the fiscal plan and have "nefarious consequences" for the Title III case, PREPA's ability to restructure and Puerto Rico's fiscal recovery, the motion states. NotiCel reported.
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What the sources posted
Posts and statements below are the sources' own words, quoted as published. They are not independently verified.
Devolver la operación de la red eléctrica a la AEE—aun cuando sea por un período breve, y cuya duración real ahora mismo se desconoce—sería ilegal, violaría el plan fiscal y [...] tendría consecuencias nefastas para el caso de Título III de la AEE, su capacidad para reestructurarse y la recuperación fiscal de Puerto Rico
Our translation: Returning operation of the electric grid to PREPA—even for a brief period, the actual duration of which is currently unknown—would be illegal, would violate the fiscal plan and [...] would have disastrous consequences for the Title III case of PREPA, its ability to restructure and the fiscal recovery of Puerto Rico
The source's own statement, as quoted by Metro Puerto Rico. Not verified by PuertoRico.com.
No successor operator identified
The board stated that the contracts with LUMA were validly granted and that the Supreme Court should not allow the government to terminate the T&D Operation Contract without a qualified private successor operator ready to assume control immediately. The government has not identified such an operator nor submitted it for the board's evaluation, according to the filing. The JSF acts as the sole representative of PREPA in the debt restructuring process that began in July 2017 under Title III of PROMESA.
The board added that it has an equally urgent interest in ensuring residents and businesses have reliable electric service at a reasonable price. It noted that LUMA's position is that annulling the contract would allow it to claim more than $250 million plus other substantial payment obligations. Such a payment could exhaust PREPA's already insufficient operating fund and could provoke increases in electricity rates or complicate confirmation of a plan of adjustment in the Title III case.
Where the sources differ
The original Metro Puerto Rico and NotiCel stories covered the Fiscal Oversight Board's Tuesday motion to intervene as friend of the court opposing LUMA contract cancellation. The new El Vocero and Primera Hora stories report on a separate but related Supreme Court resolution issued the same day in the underlying case. All four sources agree the court has not ruled on the merits. The new reports add that the court denied certain government motions, warned against further filings, kept all documents in the record, and that the government continues to argue the extension letter is invalid; they do not mention the Oversight Board. The sources do not conflict.
What the reports do not say
The reports do not state when the Supreme Court will rule on the merits of the contract cancellation case, whether the government has identified or begun the process to select a replacement private operator, the current status of any Oversight Board evaluation, or what specific steps a transition would involve. The exact procedural next steps after the resolution are also not detailed.
Sources
Every link below was opened and checked when this story was published and last updated. Official means a government body, agency or the organization itself; Reporting means a news outlet.
- Official Junta pide al Supremo evitar la cancelación del contrato de LUMA
- Reporting Junta pide al Supremo evitar la cancelación del contrato de LUMA
- Reporting La cancelación del contrato de LUMA sería «nefasta» para el país, dice la Junta Fiscal
- Reporting Gobierno mantiene su postura contra LUMA tras resolución del Tribunal Supremo
- Reporting Supremo llama la atención al Gobierno en pleito contra LUMA
How we checked this
Metro Puerto Rico and NotiCel reported on the Fiscal Oversight Board's intervention motion. El Vocero and Primera Hora reported on the Supreme Court's resolution and the government's continued position. The Oversight Board's specific arguments about illegality, fiscal-plan violations and potential $250 million LUMA claim rest on the earlier sources.
Compiled by the PuertoRico.com News Desk from the reports and statements listed above, and checked against them before publishing. It does not include original interviews. Spot an error? Email support@puertorico.com with a link to this story.