LUMA Energy
| Company type | Private |
|---|---|
| Industry | Electric utility |
| Founded | January 17, 2020 |
| Headquarters | Puerto Rico , United States |
Key people | Juan Saca (CEO) |
| Products | Electricity transmission and distribution, grid modernization |
| Parent | Joint venture between Quanta Services and ATCO |
LUMA Energy is a privately held electric utility company tasked with overseeing the transmission, distribution, and modernization of Puerto Rico's electrical infrastructure. These responsibilities were formerly handled exclusively by the Puerto Rico Electric Power Authority (PREPA). Following legislative reforms in July 2018 that permitted the privatization of PREPA’s assets and services, LUMA entered into a 15-year operational agreement on June 22, 2020, to manage the island’s electricity system. The full transition was finalized on June 1, 2021, establishing LUMA as the principal operator of Puerto Rico’s electrical grid.
Infrastructure and power grid
In the aftermath of Hurricane Maria in 2017, which revealed significant deficiencies in Puerto Rico’s electric network under PREPA’s management, the government engaged LUMA Energy—a private consortium—in 2021 to take charge of electricity transmission and distribution.
LUMA initiated extensive infrastructure rehabilitation and enhancement efforts, including the replacement of upwards of 17,000 utility poles and vegetation clearance along thousands of miles of power lines. To strengthen system durability, over 17,850 hurricane-resistant poles were installed along with upgrades to more than 1,800 poles and essential distribution breakers.
For grid modernization initiatives, LUMA proposed 460 projects for FEMA funding; currently, 144 projects are active, and eight major substation upgrades have received approval. The company intends to focus on substation and transmission improvements, preventive maintenance activities, and inspections of 51 critical transmission segments during fiscal year 2025. Additionally, it aims to clear vegetation across approximately 16,000 miles of power lines over a four-year period.
To improve system monitoring and operational efficiency, LUMA plans to deploy battery storage solutions and replace around 1.5 million conventional electricity meters with advanced smart meters within three years. In alignment with Puerto Rico’s energy objectives, the company is advancing nearly 1 gigawatt of renewable energy projects and more than 700 megawatts of energy storage capacity, including nine renewable interconnection points. LUMA has connected solar installations for roughly 12,000 customers, added 50 megawatts of renewable capacity to the grid, and introduced a resource mapping tool to support solar development.
LUMA has managed power restoration efforts following major weather incidents such as Hurricane Fiona in 2022 and Tropical Storm Ernesto in 2024. The company continues to prioritize enhancing grid reliability and has reached an agreement with the electrical workers’ union to foster workforce growth through technical training programs.
2020-2021
Initially registered as LUMA Energy ManageCo, LLC on January 17, 2020, the company was renamed LUMA Energy, LLC on June 12, 2020. It represents a joint venture between Quanta Services (United States) and ATCO (Canada), created specifically to oversee Puerto Rico’s electrical grid operations.
After a competitive bidding process involving five contenders, LUMA secured a $1.5 billion contract spanning 15 years in 2020. The company officially assumed control of grid operations on June 1, 2021, managing both distribution and transmission infrastructure while not owning any generation assets or facilities. This handover was part of Puerto Rico’s Public-Private Partnership Agreement designed to address PREPA’s bankruptcy challenges.
2022-2025
By mid-2022, LUMA reported notable enhancements in customer support, system dependability, and advancement on FEMA-backed projects within its inaugural year. In November 2023, the company hosted the IEEE Power and Energy Society conference in San Juan, marking the first time this event took place in Puerto Rico.
In early 2025, LUMA unveiled its strategy to incorporate nearly 1 gigawatt of renewable energy alongside over 700 megawatts of storage capacity, attracting $4 billion in private capital. Collaborations with Linxon US LLC and AtkinsRéalis Caribe were established to create nine energy interconnection sites, facilitating the integration of 990 MW of clean energy and 700 MW of storage.
Despite progress, LUMA continues to face challenges related to energy supply stability. During a 2022 U.S. House oversight hearing on Puerto Rico’s power grid restoration and development, a senior official highlighted LUMA’s efforts since 2021 to enhance reliability and resilience. These efforts included restoring electricity to 90% of customers within 12 days after Hurricane Fiona by deploying 1,300 field technicians and utilizing a $130 million inventory of materials. The official clarified that LUMA has not requested base rate increases for transmission and distribution services; previous rate hikes were linked to fuel expenses managed by PREPA. Measures aimed at minimizing outages involve vegetation control, improved customer service, and accelerated response times.
LUMA has advanced more than 250 FEMA-funded infrastructure projects totaling over $6 billion in federal investment, with 23 currently under construction. The company works closely with FEMA and other entities to bolster power generation capacity.
Renewable energy
On February 6, 2025, LUMA Energy revealed plans to expand Puerto Rico’s electrical grid by adding close to 1 gigawatt (GW) of renewable energy along with more than 700 megawatts (MW) of storage capacity. This $4 billion private investment is projected to generate around 4,200 construction jobs and create 139 permanent roles.
As part of the initial tranche of Puerto Rico’s renewable energy procurement, LUMA teamed up with Linxon US to establish nine interconnection points aimed at integrating new renewable resources into the grid. This initiative aligns with Puerto Rico’s objectives to eliminate coal-fired power generation by 2028 and achieve a fully renewable energy system by 2050.
Since assuming control of grid operations, LUMA has connected solar installations for approximately 12,000 customers, contributing an additional 50 MW of solar capacity.
Grid reliability and service stability
LUMA Energy has replaced in excess of 17,000 utility poles and conducted vegetation clearing along roughly 4,800 miles (7,700 km) of power lines as part of its grid modernization program. The company has also installed thousands of automation devices to improve system performance.
For fiscal year 2025, LUMA plans to inspect 51 critical line segments responsible for major transmission outages and aims to clear vegetation from about 16,000 miles (25,700 km) of power lines over the next four years. Out of the 460 grid reconstruction projects submitted to FEMA, 144 are currently underway.
The company intends to deploy additional battery energy storage systems and replace approximately 1.5 million meters with smart meters within three years to enhance outage detection capabilities. On February 6, 2025, LUMA announced the integration of nearly 1 GW of renewable resources and over 700 MW of energy storage designed to improve grid resilience, supported by the development agreement for nine interconnection points.
Nevertheless, power interruptions remain a challenge. In December 2024, a blackout impacted more than 1.2 million residents. After Hurricane Fiona in September 2022, over 100,000 customers experienced outages lasting two weeks; by October 2nd, service had been restored for about 1.34 million users. Following Tropical Storm Ernesto in August 2024, tens of thousands remained without power after one week; however, officials reported that service was restored for approximately 96% within three days.
LUMA leadership acknowledges ongoing difficulties amid a high frequency of critical failures. CEO Juan Saca noted that when power generation was available, over 95% of customers received uninterrupted service more than 98% of the time.
Monacillos fire
On June 10, 2021, a blaze at the Monacillos substation in Río Piedras resulted in extensive power disruptions throughout Puerto Rico shortly after LUMA Energy took over the island’s electricity transmission and distribution operations. The incident involved a transformer catching fire, which activated safety mechanisms and initially left between 700,000 and 800,000 customers without electricity. Investigations conducted by both state and federal agencies suggested that defective equipment might have been responsible, while law enforcement and fire officials dismissed any criminal intent and pointed to insufficient maintenance as a contributing factor.
This blackout unfolded amid heightened public scrutiny of LUMA Energy, with many critics questioning the company’s readiness and handling of the situation. LUMA attributed these difficulties to deep-rooted vulnerabilities within Puerto Rico’s electrical infrastructure. At the same time, LUMA’s digital platforms experienced a cyberattack that potentially interfered with customers’ ability to access their account information.
Government contract
The contract awarded to LUMA Energy by Puerto Rico stirred debate due to its lack of transparency and minimal public participation. The agreement grants LUMA authority over essential utility services, permits contract termination with a 120-day notice period, and encompasses broad provisions addressing scenarios such as disasters, warfare, sabotage, and civil disturbances.
LUMA sought legal protection from liability, including for negligence or intentional misconduct; however, this request was denied. Instead, the Puerto Rico Energy Bureau enforced a liability clause comparable to that of PREPA. The Office of the Inspector General advised that LUMA should secure insurance coverage for potential costs, while LUMA’s president emphasized that the limited liability clause was designed to safeguard customers.
In October 2024, the Special Commission of the Puerto Rico Bar Association determined that LUMA’s contracts violated essential legal standards and exacerbated the island’s energy challenges. The Commission recommended pursuing either annulment litigation or contract termination according to established provisions.
Sabotage allegations
LUMA Energy reported incidents involving sabotage, vandalism, and a distributed denial-of-service (DDoS) attack affecting its operations. A fire at a substation was suspected to be an act of sabotage, prompting calls for thorough investigations. On June 15, 2021, LUMA alerted the public about fraudsters impersonating company employees to illicitly collect payments. The firm introduced a new online platform but encountered service interruptions attributed to overwhelming traffic and a suspected DDoS attack generating up to two million visits per second; investigations were ongoing as of mid-2021.
Public reaction
Following LUMA’s assumption of control, widespread protests erupted across Puerto Rico involving former utility workers, the union UTIER, allied organizations, and members of the public. Demonstrators obstructed access to LUMA facilities, leading the company to file a lawsuit against UTIER on June 2, 2021, seeking an injunction against intimidation and operational interference. A court temporarily prohibited UTIER from blocking company premises but upheld constitutional free speech protections; ultimately, the case was dismissed on June 18 due to lack of sufficient evidence. Protests persisted at various LUMA locations where employees were physically prevented from entering or leaving in multiple municipalities.
Since June 1, 2021, customers have reported electrical surges damaging household appliances along with voltage fluctuations causing fires in two residences in San Sebastián. Concerns over privatization included fears of rising costs despite already elevated electricity rates amid Puerto Rico’s economic decline and widespread poverty.
In November 2024, Puerto Rico’s Court of Appeals ruled against LUMA Energy by upholding the New Energy Performance Regulator (NEPR)’s performance evaluation system that LUMA argued infringed upon its bonus entitlements. Protesters expressed skepticism regarding LUMA’s plans for grid modernization; however, president Wayne Stensby reaffirmed commitments to integrate renewable energy sources even though renewables accounted for only 2.5% of Puerto Rico’s power generation as of 2020.
LUMA has faced criticism for inadequate staffing levels and prolonged service delays. Customers cited average phone wait times exceeding three hours, malfunctioning web portals, and slower power restoration times averaging 333 minutes under LUMA compared to PREPA’s previous average of 155 minutes. Due to these service shortcomings, several municipalities declared emergencies in June 2021 and contracted private firms for repairs; some mayors also provided assistance addressing food spoilage and medication losses.
Legislators demanded remedial action; Representative Luis Raúl Torres set a 30-day ultimatum for LUMA to address deficiencies or risk contract termination. Operating with approximately 2,200 employees instead of the required 3,800 staff members, LUMA pledged improvements in service quality. Complaints regarding estimated billing prompted LUMA to request customers submit meter photographs and plan upgrades for remote meter reading. The company aimed to reduce customer call wait times to under five minutes by August 2021 through expanded personnel hiring.
Extreme weather conditions
Concerns have been raised regarding LUMA Energy’s readiness to handle extreme weather events, particularly given Puerto Rico’s susceptibility to hurricanes and tropical storms. Following the extensive grid destruction and lengthy power interruptions caused by Hurricane María in 2017, apprehensions increased when LUMA assumed control in June, coinciding with the hurricane season. These challenges have intensified advocacy for renewable energy integration and a decentralized grid system, which some view as contradictory to the utility’s privatization.
Employee rights
PREPA personnel demonstrated opposition to LUMA’s takeover due to anxieties over job stability, as staff members were required to reapply under the new management. Workers worried that inexperienced recruits from the US, Canada, and Puerto Rico might be favored during a critical hurricane period. The local union UTIER argued that the contract could breach labor regulations. Employees not retained by LUMA faced uncertain reassignment to other government entities with ambiguous salary financing. Additionally, concerns were raised about the security of retirement benefits.
On June 14, 2021, LUMA declared UITICE as the sole union authorized to represent its electricity workforce. UTIER president Ángel Figueroa Jaramillo condemned this decision as undemocratic, alleging a conspiracy between LUMA and UITICE leaders that compromised workers’ rights. He questioned UITICE’s capacity to effectively supervise LUMA due to potential conflicts of interest and reiterated UTIER’s commitment to organizing former AEE staff within other agencies while continuing opposition to the LUMA contract, citing worries over escalating energy costs and insufficient grid enhancements.
Electricity interruptions
Following LUMA’s assumption of operations, Puerto Rico experienced extensive power outages that led several mayors to declare emergencies. LUMA attributed these disruptions to existing grid vulnerabilities, adverse weather conditions, and possible sabotage. In June 2021, outages affected up to one million customers, including 40,000 who lost water service after the Monacillos fire. The Hospital Association warned that these blackouts posed serious risks to patient safety and urged prompt resolution.
On June 16, 2021, a significant blackout left more than 337,000 customers without electricity after three generating units unexpectedly shut down. The cause remained unidentified as of June 17. Earlier that day, LUMA had announced planned selective shutdowns for maintenance and capacity management but clarified that this outage was unrelated and accidental.
On June 21, a malfunction at unit #5 of the Central de San Juan power plant triggered a relay failure that cut power for 45,349 customers—primarily in the Ponce region.
The persistent crisis compelled Plaza del Caribe, one of Ponce’s largest shopping malls, to temporarily close on June 22 due to power loss.