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Governor Vetoes Measure Against LUMA Energy Contract

May 5, 2021|Caribbean Business

Pierluisi Called it Unconstitutional

SAN JUAN – Gove. Pedro R. Pierluisi issued an “express veto” Wednesday to a House Joint Resolution that, among other issues, sought to postpone the LUMA Energy LLC contract that comes into effect June 1.

When issuing an express veto, the governor must explain why the measure was rejected. If two-thirds of each legislative body votes, they can override the veto.

In a statement, Pierluisi said the resolution was unconstitutional in that it undermines a contractual obligation.

The governor said the measure is inconsistent with the government and the Puerto Rico Electric Power Authority’s (Prepa) fiscal plans. He also maintained that the measure was “unnecessary since the protections it intends to implement are in the rule of law and is inconsistent with the transformation of the energy sector that the government and the people demand,” according to a the media release issued by his office. In his veto, the governor stated that there are “mechanisms to negotiate” the contract if amending it was needed.

“I understand that there is no justified cause to postpone the execution of the Luma contract to January 2022 or any later date, since all the requirements to commence said execution have been met or are expected to be met on or before 1 June 2021. I reiterate my support for the model of public-private partnerships to modernize and restore the transmission and distribution of energy in Puerto Rico in order to improve the service to our people, provide more accessible and cheaper energy, and promote the diversification of our energy sources. Likewise, I understand that the approval of this Joint Resolution is not necessary since the Authority for Public-Private Partnerships and PREPA will be in a position to negotiate any amendment to the Luma contract that is beneficial to the public interest,” the governor said.

“I always said that the contract had to guarantee several issues, such as not requesting increases in the electricity rate to compensate for Luma’s administrative expenses and that Act 120-2018 is complied with so that PREPA employees are guaranteed to be considered for employment with Luma with the same benefits that they received in [Prepa] or better, including the pension plan to which Luma as an employer must now contribute. In the alternative, that they be guaranteed a position in the government, either in PREPA or another agency,” Pierluisi reiterated.

The governor’s office further said that Pierluisi “had indicated that the contract must comply with the standards of services and improvements to the system in accordance with the public policy established in Act 17-2019, that there are measures that avoid conflicts of interest in the awarding of contracts, and that clear and specific compliance and performance metrics are established and met.”

“To ensure that these matters are fulfilled, as soon as I started my government I signed Executive Order 2021-012. which created the steering committee chaired by the Secretary of State, Larry Seilhamer. This committee may also evaluate and recommend possible amendments. We all want a robust and resilient electrical system, and my government is committed to the energy transformation that leads Puerto Rico towards renewable energy. Continuing to do the same thing is not an option. I am always focused on the best for our people and my actions prove it,” Pierluisi said.

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