Puerto Rico Faces Major Electricity Bill Hikes Amid Persistent Outages and Public Anger

Puerto Rico is holding a series of regulatory hearings on rate increase requests from private power companies that, if approved, would sharply raise electricity charges for residents. The hearings — overseen by Puerto Rico’s Energy Bureau — began in mid-November and are scheduled to continue through late December. The process so far has proceeded without direct public testimony; the bureau will decide whether to authorize the proposed changes.

Proposed increases and concerns

Advocacy groups including the Solar and Energy Storage Association of Puerto Rico (SESA) and Solar United Neighbors say the combined proposals could move the monthly base charge from roughly $4 to more than $40. One proposal from Luma Energy, which manages transmission and distribution on the island, would raise the residential fixed monthly charge from about $4 to $15 starting in January.

“The larger issue here is the impact on low-income people … on elderly people,” said P.J. Wilson, president of SESA. Javier Rúa-Jovet, SESA’s public policy director, called Luma’s request an “unjustified economic blow” and said no supporting analysis has been presented publicly to justify the jump.

Impacts on residents and rooftop solar

Advocates warn the increases would disproportionately hurt households in Puerto Rico, where the poverty rate exceeds 40% and the cost of living is high. Higher fixed charges also weaken the financial case for rooftop solar and other distributed energy systems, making it harder for customers to reduce reliance on the central grid.

If some proposals take effect, electricity rates on the island could approach about 33 cents per kilowatt-hour, compared with a U.S. mainland average near 17 cents per kWh, according to the U.S. Energy Information Administration.

Outages and political moves

Chronic blackouts continue to trouble the island, with major outages reported during Easter week this year and on New Year’s Eve last year. Many residents remain frustrated by repeated power failures and the resulting damage to appliances.

Puerto Rico’s governor has pledged to begin legal steps to terminate the government’s contract with Luma Energy. Chief of Staff Francisco Domenech said the legal process to cancel the contract would start before the end of the year but noted that Luma would be required to continue providing service for about a year after any formal cancellation.

Finances, debt and grid challenges

Luma was contracted in June 2021 by the island’s Electric Power Authority (PREPA), which is restructuring more than $9 billion in debt. Negotiations with bondholders remain contentious, and experts warn consumers could face further rate increases if a debt resolution is not reached.

Observers note Puerto Rico’s grid was fragile before Hurricane Maria in 2017 because of decades of underinvestment and deferred maintenance. Luma has said PREPA’s weak financial position has limited access to credit and financing, forcing it to divert funds from planned upgrades to emergency repairs and to fund investments on a yearly basis rather than through multi-year financing.

Luma maintains it would not profit directly from the proposed rate increases, saying additional revenue would be used to modernize and strengthen the electrical system.