Luma Energy has countersued Puerto Rico's government, accusing officials of acting in bad faith and with malice to illegally fulfill a campaign promise. The move follows a lawsuit by the government seeking to cancel Luma's contract, with Luma claiming billions in damages if terminated.
The escalating legal battle between Luma Energy and the Puerto Rican government could further destabilize the island's already fragile power infrastructure, impacting residents and businesses and potentially leading to significant financial claims against the territory.
Luma Energy, the private company managing Puerto Rico's power transmission and distribution, has countersued the U.S. territory's government. The company accused the government of acting "in bad faith and with intentional malice to the detriment of the public interest," and of illegally trying to fulfill a campaign promise.
This legal action comes six months after the Puerto Rican government initiated a lawsuit to cancel its multimillion-dollar contract with Luma. Governor Jenniffer González had stated that the island's electrical system had not improved with the promised speed, consistency, or effectiveness.
The dispute highlights the ongoing struggles of Puerto Rico with chronic power outages and a damaged electrical grid, exacerbated by Hurricane Maria in 2017. The island's Electric Power Authority also remains in bankruptcy, with over $9 billion in public debt.
Luma asserted that it would be owed billions of dollars, including at least $4.5 billion in damages, should its contract be terminated. Luma Energy, a consortium including Calgary-based Atco and Houston-based Quanta Services Inc., took over power operations in June 2021, inheriting an infrastructure in disrepair.
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