Luma’s First Day Running Puerto Rico Grid Brings Strike Threats
(Bloomberg) -- A private company running Puerto Rico’s public power system for the first day faced calls for strikes and protests Tuesday, as well as some customers without electricity, an indication of the political and operational challenges of taking over a fragile system decimated by a hurricane almost four years ago.
Luma Energy -- a consortium of Atco Ltd. and Quanta Services Inc. working with Innovative Emergency Management Inc. -- took over the operation and management of the Puerto Rico Electric Power Authority’s (Prepa) transmission and distribution lines on Tuesday. Prepa is among the largest public power utilities in any U.S. jurisdiction, with 1.4 million clients. Under the Luma deal signed last year, Prepa retains ownership of the assets and continues to run power generation for the island’s 3.3 million people.
A coalition of unions in Puerto Rico threatened to “paralyze” the island with strikes and protests if the government doesn’t rescind the contract that gives Luma Energy control of the grid. Meanwhile, Luma’s workers were scrambling Tuesday to restore power to 19,000 clients who had lost electricity in recent days while Prepa was still in control.
Speaking in front of Prepa’s headquarters in San Juan, a group of unions said they would take to the streets like they did during the summer of 2019 when mass marches led to the resignation of then-governor Ricardo Rossello. The groups didn’t offer any details but said they would announce more measures Wednesday.
“There will be no peace in Puerto Rico until the contract is rescinded,” said Carlos Rodriguez, the coordinator of the trucker’s union -- one of more than a dozen groups that say they will join the effort. “We’re here to tell Luma that they shouldn’t get comfortable in the country, because we’re not going to let them be in peace until they get out of Puerto Rico.”
Backers of the 15-year contract say it’s needed to overhaul the island’s antiquated and fragile grid, restore investor confidence in the bankrupt U.S. territory and revert years of economic decline. Residents and businesses suffer with unreliable service, chronic outages and rates that are higher than on the U.S. mainland. Prepa never fully recovered from the destruction across the island wrought by Hurricane Maria in 2017.
Critics say the contract has left thousands of Prepa employees, who didn’t transfer to Luma, working for other government agencies. Detractors -- including politicians -- argue the estimated $1.3 billion contract is too generous.
Wayne Stensby, Luma’s president and chief executive officer, is urging everyone to put customers first. Luma will press charges if there are any acts of sabotage, trespassing or destruction against the infrastructure that the company is responsible for protecting, Stensby told reporters Tuesday.
“What are they fighting against?” Stensby said about anyone seeking to disrupt or derail Luma’s takeover. “How can you fight against better customer service and better electricity and great careers and a great training and putting health and safety first?”
Luma has 350 lineworkers to help restore service and fix outages and will increase that number as the company grows, Stensby said. It’s also brought in about 60 employees from its parent companies to help with the transition during the next three to four weeks, he said.
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