Record Puerto Rico Electric Rate Takes Effect as Outages and Costs Mount
SAN JUAN, Puerto Rico (AP) — A record electric rate took effect Thursday in Puerto Rico, deepening the financial strain on residents as chronic outages continue to plague the U.S. territory's fragile power grid.
A residential customer who uses 800 kilowatt-hours a month will see their bill rise about 18%, from $229 to $271, according to the Puerto Rico Energy Bureau, which approved the increase.
The new rate, 33.86 cents per kWh, will remain in effect until at least Dec. 31 and is expected to push up an already high cost of living on the island of 3.2 million people, where more than 40% of residents live in poverty. It far exceeds the U.S. mainland average of 18.3 cents per kWh for residential customers, according to the U.S. Energy Information Administration.
Luma Energy, which oversees transmission and distribution in Puerto Rico, had sought an increase of more than 6 cents per kWh. The company said the money would not generate additional revenue for Luma but would cover higher costs.
Luma said in a statement that the difference was driven by heavier energy use during hot summer temperatures, rising global oil prices tied to the conflict in the Middle East — which has constrained fuel transportation and increased costs — greater use of customer batteries, and the need to rely on more expensive fuel when power plants do not generate enough electricity.
The increase comes nearly a decade after Hurricane Maria destroyed Puerto Rico's power grid when it hit in 2017 as a powerful Category 4 storm. The grid was already weak after decades of deferred maintenance and insufficient investment, and outages have persisted since.
Last week, a large fire at a substation left more than 200,000 customers without power, the latest widespread outage to hit the island.
The Energy Bureau said late Wednesday that it had approved an increase of 5.28 cents per kWh to reduce the burden on customers. It said it did not pass along $17.6 million in costs tied to what it described as alleged failures by New Fortress Energy to supply fuel from June to August.
Fuel costs must not be automatically passed on to consumers simply because they were incurred or billed, the bureau said.
New Fortress Energy supplies natural gas to power plants on Puerto Rico's north coast. Those plants are now using diesel, which is more expensive, because a vessel carrying a natural gas delivery has been blocked from entering San Juan Bay for two weeks because of its size. The matter remains in court.
The Energy Bureau also said it is investigating about $19 million that Luma said was paid for gas quantities that officials say exceeded what Genera PR ultimately needed or could receive. Genera PR oversees power generation in Puerto Rico.
The increase comes as the administration of Puerto Rico Gov. Jenniffer González pushes to cancel its contract with Luma, a dispute now tied up in court along with other lawsuits.
Luma and Genera PR were awarded contracts as Puerto Rico's state-owned Electric Power Authority struggles to restructure more than $9 billion in debt.
In 2024, petroleum accounted for 63% of the island's overall energy use, according to the U.S. Energy Information Administration. Natural gas made up 31%, coal 5% and renewables 1%.
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