Puerto Rico Power Rates Hit Record, Nearly Double US Mainland

Puerto Rico's electric rate climbed to a record 33.86 cents per kWh on Thursday, nearly double the 18.3 cents per kWh average that residential customers pay on the U.S. mainland, according to the U.S. Energy Information Administration.

The Puerto Rico Energy Bureau, which approved the increase, said a residential customer consuming 800 kilowatt-hours a month will see the monthly bill rise about 18%, from $229 to $271. The new rate stays in effect until at least Dec. 31.

The increase lands on an island of 3.2 million people where more than 40% of residents live in poverty, and it is expected to push an already high cost of living even higher.

Luma Energy, the private operator overseeing transmission and distribution on the island, had requested an increase of more than six cents per kWh. The company stressed the hike would not generate additional revenue for it, only cover rising costs.

"The difference is driven by higher energy consumption due to high summer temperatures, rising global oil prices resulting from the conflict in the Middle East — which has constrained fuel transportation and increased costs — greater use of customer batteries, and the need to rely on more expensive fuel when power plants do not generate enough electricity," Luma said in a statement.

The Energy Bureau approved a smaller increase of 5.28 cents per kWh to reduce the financial burden on customers. It also said it did not pass along $17.6 million in costs tied to what it called alleged failures by New Fortress Energy to supply fuel from June to August.

"Fuel costs must not be automatically passed on to the consumer simply because they were incurred or billed," the Energy Bureau said in a statement late Wednesday.

New Fortress Energy supplies natural gas to power plants on Puerto Rico's north coast. Those plants are currently running on diesel — at a higher cost — because a vessel carrying a natural gas delivery was blocked from entering San Juan Bay for two weeks due to its size. A judge authorized the vessel's entry on Thursday.

The Energy Bureau is also investigating some $19 million that Luma said was paid for gas quantities that officials say exceeded what Genera PR, the company overseeing power generation on the island, "ultimately needed or could receive."

The rate increase comes as outages persist nearly a decade after Hurricane Maria razed the grid in 2017 as a Category 4 storm. The grid was already fragile after decades of deferred maintenance and underinvestment. Last week, a large fire at a substation left more than 200,000 customers without power in the latest blackout to hit the island.

Political friction is compounding the operational crisis. The administration of Puerto Rico Gov. Jenniffer González is pushing to cancel the contract with Luma, with the case tied up in court amid ongoing lawsuits.

Luma and Genera PR were awarded their contracts as Puerto Rico's state-owned Electric Power Authority struggles to restructure more than $9 billion in debt.

The island's fuel mix leaves it exposed to the price swings now driving bills higher. In 2024, petroleum accounted for 63% of Puerto Rico's overall energy use, natural gas 31%, coal 5% and renewables just 1%, according to the U.S. Energy Information Administration.

With the record rate locked in through year-end, oil prices volatile and the court fight over Luma's contract unresolved, Puerto Rican households face a costly winter — and little near-term relief on reliability or price.