Puerto Rico power hits a record 33.86 cents a kWh, 85% above the mainland average, as fuel costs rise

A record electricity rate took effect in Puerto Rico on Thursday. Residential customers will pay 33.86 cents per kilowatt-hour from October through December after the Puerto Rico Energy Bureau approved most of a fuel-cost adjustment requested by grid operator LUMA Energy, El Nuevo Dia and the Associated Press reported.

What the bill does

The bureau approved an increase of 5.28 cents per kWh, below the more than six cents LUMA had asked for, according to the AP. A household using 800 kWh a month will see its bill go from about $229 to $271, roughly 18% more. The rate is set to stay in place until at least Dec. 31.

Working back from the reported figures, the previous rate was about 28.58 cents, so the per-kWh charge rose about 18.5%. The new 33.86 cents compares with an average of 18.3 cents for residential customers on the US mainland, according to the Energy Information Administration as cited by the AP. Puerto Rico now pays about 85% more for each unit of power.

Why it went up: it is mostly oil

LUMA blamed higher summer demand, rising global oil prices linked to the conflict in the Middle East, greater use of customer batteries, and reliance on more expensive fuel when plants fall short. That last point is concrete right now: according to the AP, plants on the island's north coast that normally run on natural gas are burning diesel because a tanker carrying gas has been blocked from entering San Juan Bay for two weeks, a dispute that is in court.

The fuel mix explains why this rate tracks the oil market so closely. EIA data cited by the AP show petroleum supplied 63% of Puerto Rico's overall energy use in 2024, natural gas 31%, coal 5% and renewables 1%. A grid that depends on oil for most of its energy passes a crude rally through to customers within a quarter. Brent crude jumped above $100 this week, as we reported, and that is the backdrop for the next quarterly adjustment.

What the regulator held back

The bureau did not pass on $17.6 million it tied to alleged failures by New Fortress Energy to supply fuel from June to August, saying fuel costs "must not be automatically passed on to the consumer simply because they were incurred or billed." It is also investigating about $19 million LUMA said it paid for gas in quantities officials say exceeded what generator Genera PR needed or could receive. If those amounts had been included, the increase would have been larger.

Who it hits

For households, the AP noted that more than 40% of the island's 3.2 million residents live in poverty. For businesses, the reports we read covered the residential rate only, so we cannot state a commercial figure. As a plain illustration of scale, every 1,000 kWh a month at 5.28 cents more costs $52.80 more a month. A restaurant running walk-in coolers, a small grocery or a laundromat uses electricity in multiples of that, and they are doing it on a grid where a substation fire knocked out power to more than 200,000 customers last week.

The increase also arrives while the government of Gov. Jenniffer Gonzalez is trying to cancel LUMA's contract in court, and while the island's public power authority works to restructure more than $9 billion of debt.

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Sources: Associated Press; El Nuevo Dia; Puerto Rico Energy Bureau and LUMA Energy statements as reported by both; U.S. Energy Information Administration data as cited by the AP. The prior-rate, percentage and per-1,000-kWh figures are our calculations. This is market information, not investment advice.