Record electric rate goes into effect in Puerto Rico amid soaring costs, demands

SAN JUAN, Puerto Rico — A record electric rate went into effect Thursday in Puerto Rico as outages persist and the U.S. territory’s power grid continues to crumble.

A residential customer that consumes 800 kilowatt-hours a month will see the monthly bill rise about 18%, from $229 to $271, according to Puerto Rico’s Energy Bureau, which approved the increase.

The new rate will remain in effect until at least Dec. 31 and is expected to drive up an already high cost of living on the island of 3.2 million people, where more than 40% of residents live in poverty.

The new rate of 33.86 cents per kWh far surpasses the average rate of 18.3 cents per kWh for residential customers in the U.S. mainland, according to the U.S. Energy Information Administration.

Luma Energy, which oversees the transmission and distribution of power in Puerto Rico, had requested an increase of more than six cents per kWh and stressed that it would not generate additional revenue for the company, but rather cover an increase in costs.

“The difference is driven by higher energy consumption due to high summer temperatures, rising global oil prices resulting from 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,” Luma said in a statement.

The increase comes as outages persist nearly a decade after Puerto Rico’s power grid was razed by Hurricane Maria when it struck the island in 2017 as a powerful Category 4 storm, although the grid was already weak given a lack of maintenance and investment for decades.

Last week, a large fire that erupted at a substation left more than 200,000 customers without power in the latest outage to hit the island.

The Energy Bureau said in a statement late Wednesday that it approved an increase of 5.28 cents per kWh to reduce the financial burden on customers.

It noted that it did not pass along the cost of $17.6 million associated with what it called alleged failures by New Fortress Energy to supply fuel from June to August.

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“Fuel costs must not be automatically passed on to the consumer simply because they were incurred or billed,” the Energy Bureau said.

New Fortress Energy supplies natural gas to power generation plants on Puerto Rico’s north coast. Currently, those plants are using diesel — driving up costs — because a vessel laden with a delivery of natural gas has been blocked from entering the San Juan Bay for two weeks given its size. The case remains mired in court.

The Energy Bureau said it also is investigating some $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 the generation of power in Puerto Rico.

The increase comes as the administration of Puerto Rico Gov. Jenniffer González pushes to cancel the contract with Luma, with the case currently tied up in court with ongoing lawsuits.

Luma and Genera PR were awarded contracts as Puerto Rico’s state-owned Electric Power Authority struggles to restructure its more than $9 billion debt load.

In 2024, petroleum represented 63% of the island’s overall energy use; natural gas accounted for 31%, coal 5% and renewables 1%, according to the U.S. Energy Information Administration.