Government of Puerto Rico selects Luma Energy for the operation and transformation of the transmission and distribution system

This Authority for Public-Private Partnerships of Puerto Rico release was published using machine translation.

San Juan, PR. June 22, 2020. - The executive director of the Authority for Public-Private Alliances in Puerto Rico, Fermín Fontanés, today announced the selection of the company Luma Energy, LLC (Luma) for the operation, maintenance and modernization of the transmission system. and distribution (T&D) of the Electric Power Authority (PREPA) through a public-private alliance with a term of 15 years.

Luma's selection is the result of a robust bidding process that lasted more than 18 months and attracted the interest of five (5) world-class participants, of which four (4) were pre-qualified to advance to the request for proposals stage of the process (RFP - request for proposals), as dictated by the processes of the Authority for Public-Private Partnerships in Puerto Rico.

"This public-private partnership places Puerto Rico on the right path towards the goal of achieving a reliable and sustainable infrastructure that will guarantee Puerto Ricans the tranquility they deserve. For decades, our electric power system has undergone countless changes and attacks that have affected the operation and service to its clients. To this is added the impact of Hurricanes Irma and María, and earthquakes in recent months. The Authority for Public-Private Partnerships of Puerto Rico is extremely satisfied with the selection of Luma Energy as the company that will lead the historic transformation of the electrical system on the island, "said Fermín Fontanés.

"It was a rigorous, thorough and methodical analysis evaluation and selection process, guided by the responsibility that governs all P3 processes. We are committed to working with LUMA to optimize the Transmission and Distribution system to better serve the Puerto Ricans and to strengthen Puerto Rico's resilience to possible future natural disasters. Through this agreement, investment in infrastructures that will contribute to the economic development, revitalization and growth of the island is made viable, "added Fontanés.

LUMA is a company that has been established in Puerto Rico by the companies Canadian Utilities LLC (CUL), ATCO Ltd.'s, Quanta Services, Inc. (Quanta) and Innovative Emergency Management, Inc. (IEM). Luma and her main ally IEM, an expert in federal funds, were selected through a competitive bidding process. Both companies are industry leaders in the areas of:

- Safe and reliable energy service to millions of clients;

- Development of reliable and sustainable infrastructure;

- Specialized training for the local force;

- Acquisition and implementation of federal funds;

- Assists the public and private sectors in optimizing their preparedness, risk mitigation, effective response to and recovery from a disaster; and

- Management of public-private alliances.

Among the services and benefits that LUMA will provide during the course of the public-private partnership, are:

- Increase in the reliability of the service to improve the well-being of clients and promote economic development;

- Promote a culture focused on safety throughout the organization to help ensure the safety of LUMA employees and the general public;

- First-class customer service organization;

- Improve operational efficiency and financial stability in order to contribute to offering a more affordable energy service for customers in the long term; and

- Leverage the reach of your expert workforce to meet emergency response needs where appropriate.

LUMA projects that it will generate a cumulative net savings of $ 323 million during the first half of the 15-year term. LUMA's average annual operating savings projection for the first half of the term is 27% higher than the annual service charge payable to LUMA, so the projected amount of savings offsets the service charge.

"We are honored to have been selected for this historic contract, we are extremely excited to begin charting the path that will bring long-term value for Puerto Ricans," said Wayne Stensby, LUMA President and CEO. "LUMA will not only provide a safe, reliable and affordable energy service, but we will accelerate this transformation of the system in a way that results in lasting benefits for the people and communities on the island. Working alongside the great talent and employees of the Energy Authority Eléctrica, LUMA will develop an organization that will provide operational excellence and exceptional customer service. "

During the press conference in which the LUMA selection was presented, important aspects such as the current situation of the electric power system in Puerto Rico were discussed, including operational and financial factors of the Electric Power Authority; the processes of the Authority for Public-Private Alliances of Puerto Rico for the evaluation and selection of bidders, the scope of LUMA's work and contractual terms, and the goals of the transformation of the transmission and distribution system for energy in the short and long term term.

The Authority for Public-Private Partnerships, which was established in 2009, is the only authorized government entity responsible for the implementation of the policies of public-private partnerships of the Government of Puerto Rico, as well as for determining the functions , services or facilities for which public-private partnerships are established.

The Electric Power Authority is a public corporation of the Government of Puerto Rico. As the only electric power supply company in Puerto Rico, PREPA provides electricity to approximately 1.5 million customers, making it one of the largest public energy supply companies in the United States. With close to 6,000 employees, PREPA generates approximately $ 3.5 billion in annual revenue across seven (7) regions. PREPA's Transmission and Distribution system interconnects power plants with major switching and load centers throughout Puerto Rico.