Puerto Rico Sues LUMA Energy to Cancel Power Grid Contract

Puerto Rico Sues LUMA Energy to Terminate Power Grid Contract

Puerto Rico's government filed a lawsuit in December 2025 seeking to cancel its contract with LUMA Energy, the private utility consortium responsible for managing the island's electricity transmission and distribution network since June 2021. Governor Jenniffer González Colón, who campaigned explicitly on removing LUMA if elected, pursued the legal action after years of mounting public frustration over persistent blackouts, rising electricity bills, and what she described as LUMA's failure to deliver the improvements it promised when the contract was signed.

LUMA's Record: Worse Outages Despite $1.5 Billion Contract

LUMA Energy assumed control of Puerto Rico's transmission and distribution network under a 15-year, $1.5 billion contract. Rather than improving, grid reliability worsened on LUMA's watch. According to federal data, the average Puerto Rico customer experienced approximately 30 hours without electricity in 2024, up from 26 hours annually at the time LUMA took over in 2021. By comparison, the typical mainland US electricity customer experiences approximately two hours of outage per year. Puerto Rico has the least reliable electricity system of any US jurisdiction, with residents experiencing roughly 15% more service interruptions and 21% longer outages than mainland Americans. "Despite the operator's expectations and representations, the electrical system has not improved with the speed, consistency or effectiveness that Puerto Rico deserves," Governor González said.

Federal Funding Cancelled and Military Implications

The Trump administration's cancellation of $815 million of a $1 billion Biden-era fund to expand rooftop solar and battery storage for low-income Puerto Ricans compounded the crisis. Additionally, at least 11 projects aimed at improving power reliability for two US military bases on the island — both central to Caribbean operations — were frozen or suspended amid the legal standoff. The path forward is complicated by PREPA's approximately $9 billion in bankruptcy debt and the difficulty of finding a qualified replacement operator ready to assume LUMA's role without additional service disruptions.