Quanta Services, Inc. (NYSE: PWR) announced today that LUMA Energy, LLC (LUMA), a joint venture between Quanta Services (Quanta) and Canadian Utilities Limited, an ATCO Ltd. Company (ATCO), in conjunction with Innovative Emergency Management, Inc. (IEM), has been selected by the Puerto Rico Public-Private Partnership Authority (P3) for a 15-year Operation and Maintenance Agreement (the O&M Agreement) with the Puerto Rico Electric Power Authority (PREPA).
This O&M Agreement engages LUMA to operate, maintain and modernize PREPA's more than 18,000-mile electric transmission and distribution (T&D) system in Puerto Rico following a transition period. LUMA's selection by the P3 for the O&M Agreement has received all necessary final regulatory and government approvals and follows a competitive process that lasted for more than a year.
In addition to delivering a more reliable and resilient power grid, LUMA believes its efforts will lead to the transformation of PREPA and deliver long-term social and economic benefits to the people of Puerto Rico. LUMA will not own the T&D assets nor own or operate the power generation assets. Quanta and ATCO each own 50% of LUMA.
Duke Austin, Quanta's President and Chief Executive Officer, commented, "We believe this opportunity is transformative for Quanta and supports our ongoing strategy of providing sophisticated and valuable solutions to the utility industry that benefit consumers.
By bringing together Quanta's industry leading electric utility services and project execution, ATCO's operational excellence and customer service expertise as a utility provider and IEM's unparalleled experience in federal funds management, we have created a purpose-built and effective operator for the Puerto Rico T&D system and the people of Puerto Rico. We intend to invest our time, expertise and resources in LUMA to operate a world-class electric grid and to develop a modern, highly trained craft-skilled workforce for the future of Puerto Rico.
Through a disciplined, committed approach, LUMA will have the benefit of Quanta's industry-leading craft-skilled workforce, as well as recognized experts in technical areas such as high-voltage transmission construction, distributed energy resources and microgrid integration.
LUMA also will manage the disciplined implementation of targeted investments by PREPA and drive efficient operations to facilitate delivery of a modern, secure, resilient and affordable electric grid for the residents of Puerto Rico."
LUMA Overview and Value Proposition
LUMA is headquartered in San Juan, Puerto Rico and is in the process of mobilizing a talented team of experienced professionals to oversee and implement a tailored, community-first approach for the full transfer of PREPA's T&D operations to LUMA, which is expected to occur at the end of a transition period targeted for mid-2021. LUMA expects to capitalize on the strengths and proven expertise of its world-class organizations to deliver a unique infrastructure solution for Puerto Rico's electric T&D system.
During the transition period, LUMA will work collaboratively with PREPA and the government of Puerto Rico to complete numerous steps necessary to ensure a smooth transfer and begin the historic opportunity to modernize the T&D system and transform PREPA.
LUMA will receive a fixed Front-End Transition Service Fee and reimbursement of labor costs, third party consulting fees and out-of-pocket expenses incurred for transition services.