Government accuses LUMA of sowing fear with $1.3 billion cancellation claim
Puerto Rico's public-private partnerships authority and power utility asked the Supreme Court to exclude LUMA executive's sworn statement estimating $1.3 billion in costs if the contract extension is nullified.
File photoThe short version
- AAPP and AEE asked the Supreme Court to exclude a sworn statement by LUMA CEO Janisse Quiñones estimating $1.3 billion in costs if the contract extension is nullified according to Metro Puerto Rico
- The government called the figure a false and alarmist narrative that uses fear to perpetuate an operation under judicial challenge Metro Puerto Rico reported
- Of the $1.3 billion more than two-thirds or $935.4 million corresponds to pre-existing items including $588.3 million in service accounts and $347.1 million in supplier payables that AEE denies owing NotiCel reported
- AAPP and AEE said Article 16 of the main contract requires LUMA to operate for 12 months and cooperate with a successor during transition and that nullifying only the extension would allow this NotiCel reported
Motion to exclude LUMA evidence
The Autoridad para las Alianzas Público-Privadas (AAPP) and the Autoridad de Energía Eléctrica (AEE) filed a motion asking the Supreme Court to exclude a sworn declaration by LUMA Energy president and chief executive Janisse Quiñones. Metro Puerto Rico reported. The declaration estimates a cost of $1.3 billion if the extension of LUMA's contract is annulled. The agencies said the statement was first presented with LUMA's legal filing on Oct. 5.
AAPP executive director Josué A. Colón said the company is trying to introduce estimates that are not part of the judicial record to create a narrative of chaos before a possible declaration of nullity and eventual transition. He added that LUMA seeks to divert attention from the central controversy the Supreme Court must resolve: whether the amendment that extended the supplemental contract complied with the law. 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.
LUMA quiere que el pueblo crea que hacer cumplir la ley costará $1,300 millones. Esa es una narrativa falsa y alarmista que rechazamos.
Our translation: LUMA wants the people to believe that enforcing the law will cost $1.3 billion. That is a false and alarmist narrative that we reject.
The source's own statement, as quoted by Metro Puerto Rico. Not verified by PuertoRico.com.
Dispute over cost breakdown
According to the motion $935.4 million of the $1.3 billion figure more than two thirds corresponds according to LUMA's own arguments to items that supposedly existed before any transition. Of that amount $588.3 million relates to service accounts and $347.1 million to accounts payable to suppliers which in their vast majority correspond to LUMA's parent companies. The AEE denies owing those amounts and maintains they cannot be presented as new costs caused by the potential nullity of the amendment known as the Carta Extensión. Metro Puerto Rico reported.
The agencies also attribute to LUMA deficiencies in billing and collection failure to reduce energy theft and unbilled energy and poor performance in recovering federal reimbursements for reconstruction of the electric system. They argue these problems caused the liquidity difficulties that LUMA now uses to prevent cancellation of its contract. Colón stated that LUMA cannot fail in fundamental tasks and then present the consequences of its poor performance as a claim the public must accept. NotiCel reported.
Contractual obligations and consumer costs
AAPP and AEE reaffirmed that Article 16 of the contract contemplates a 12-month period during which LUMA would have to continue operating the system and collaborate with a successor operator. They said the judicial determination sought would annul only the Carta Extensión but not the main contract allowing activation of that article. Metro Puerto Rico reported.
The motion also notes that maintaining the supplemental agreement indefinitely implies continuing to pay a fixed annual service charge of more than $143 million paid by consumers compared with a base fixed charge of $70 million under the main contract. Colón concluded that service continuity is a contractual obligation not a concession by LUMA and that Puerto Rico can enforce the law protect consumers and carry out an orderly transition. NotiCel reported.
Where the sources differ
All three sources agree on the core facts: AAPP and AEE filed a motion to exclude Janisse Quiñones' sworn statement estimating $1.3 billion in costs the characterization of the claim as fear-mongering the breakdown showing $935.4 million as pre-existing items the denial of those debts and the reference to Article 16 allowing a 12-month transition. Metro Puerto Rico and NotiCel provide nearly identical direct quotes from Josué A. Colón while El Sol de Puerto Rico only repeats the headline and a brief summary without adding new details or quotes. The sources do not conflict on any numbers dates or attributions.
What the reports do not say
The reports do not state what LUMA's full response to the motion is or whether the Supreme Court has scheduled a hearing on the request to exclude the declaration. They also do not specify the current status of the underlying case how much has already been paid under the supplemental contract or what exact steps a transition under Article 16 would involve. No comment from LUMA Energy or Janisse Quiñones appears in any of the articles.
Sources
Every link below was opened and checked when this story was published. Official means a government body, agency or the organization itself; Reporting means a news outlet.
- Official Gobierno acusa a LUMA de “sembrar miedo” con factura de $1,300 millones
- Reporting Gobierno acusa a LUMA de “sembrar miedo” con factura de $1,300 millones
- Reporting El gobierno rechaza que la cancelación del contrato de LUMA cueste $1,300 millones
How we checked this
Metro Puerto Rico and NotiCel supplied the detailed account of the government's motion and Colón's statements. El Sol de Puerto Rico repeated the same headline without adding substantive new information and was not relied upon for any specific facts or quotes.
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.