Puerto Rico once again put its electric system in the hands of the courts. Governor Jenniffer González’s move to file a new lawsuit to annul LUMA’s contract, after the original lawsuit was paralyzed by the attempt to transfer it to the federal court, marks a turning point. It is not just one more step: it is a political decision that returns the country’s energy future to a realm of uncertainty.

The action serves as a dangerous multiplier of tensions. It revives the contract dispute with LUMA, introduces doubts about the continuity of federally funded reconstruction work, adds pressure to the Electric Power Authority (PREPA) bankruptcy process, and sends ambiguous signals to both Washington and the investment environment. In a fragile system, these fronts feed on each other. The result is not order or clarity, but a crisis that is no longer just a technical one, but a political and governance problem once again.

The step taken by the government implies high risks, such as the possible paralysis of critical projects contemplated as part of the necessary rehabilitation of the energy network. Federal funds for this purpose may be lost. In addition, a diligent response in the event of breakdowns or blackouts is at stake because the entity being sued will not necessarily respond at 100% of its capacity.

The legal claims related to obstacles to the improvement of the power grid this year include a lawsuit filed by LUMA in October, when it claimed in the federal forum a multimillion-dollar disbursement from the government. In its motion, the company denounced the “deliberate and unjustified withholding of operational funds,” which has prevented the payment of $202 million owed to local suppliers who have stopped essential maintenance and other services for lack of payment.

The transition to which the government aspires has already been estimated to have a cost that could exceed $450 million, which is approximately equivalent to a rate increase of close to three cents per kilowatt-hour for one year. We are entering a highly sensitive phase because the prolongation of the litigation may cloud the business climate, essential to stimulate private investment, which will be crucial for the energy transformation. In the meantime, it is clear that a new operator will not remedy the structural flaws and other deficiencies immediately.

It is relevant that in this erroneous pattern throughout this privatization process, the figure of Josué Colón has always been present, first as Prepa’s director and now as energy czar. His shifting positions foster an informality that undermines the seriousness of the efforts to improve the country’s energy system.

The prolonged bankruptcy has been corrosive. Few companies with financial muscle and expertise are willing to do business with a corporation trapped in Title III. In addition, traumatic blackouts -many caused by generation failures- brought the electricity issue back to the center of the political debate.

In her campaign, the governor promised to dispense with LUMA. However, after insisting that there were arguments to prove contractual breaches, the government now argues that it was the State itself that committed fraud by negotiating an ultra vires contract, null and void, and appeals to the Supreme Court invoking the highest powers of the Executive. In this context, the energy czar cannot limit himself to administering processes: his position was created to anticipate risks and respond when the system fails.

The turnaround is profound. The institutional frameworks for rebuilding the electricity system and for contracting with the private sector have been called into question, just when the Energy Bureau is evaluating a new Integrated Resource Plan. And therein lies the core of the problem. Because, as so many times before, problems are not solved here: they get tangled up. Like a power line covered with weeds that nobody cleans in time, the process is filled with contracts, litigation and accumulated errors. Clearing that tangle requires decision and precise command so that sound management practices shine through and rigorous compliance with terms and conditions is enforced.

In the short term, it will be essential to communicate clearly about each step of the litigation, as a step to stop circumstances that could lead to greater damage to any line of energy infrastructure, its regular or subcontracted personnel and the country that depends on its operation. Given the position of terminating the contract with LUMA, it is necessary for the government to demonstrate reliability and transparency and to announce without delay the proponents that could assume fundamental responsibilities for Puerto Rico.

The crucial goal is to fine-tune an equation that guarantees a good business climate, which depends on forging a resilient and robust energy model with diverse sources to eradicate the uncertainty that today impacts the public and private sectors, but above all the people, who will not regain confidence in the government if they do not perceive that actions are being taken focused on the collective well-being of the country.

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This content was translated from Spanish to English using artificial intelligence and was reviewed by an editor before being published.