Puerto Rico’s Public-Private Partnerships Authority (Autoridad para las Alianzas Público-Privadas, “P3”) and the Puerto Rico Electric Power Authority (“PREPA”) have filed a civil action in the San Juan Superior Court seeking declaratory and injunctive relief related to a 2022 extension of LUMA Energy’s interim operating arrangement for Puerto Rico’s electric transmission and distribution system. The complaint raises issues concerning statutory approvals, regulatory compliance, and the governance framework applicable to public-private infrastructure contracts.
In June 2020, P3 and PREPA entered into the Transmission and Distribution Operation and Maintenance Agreement (the “T&D OMA”), together with a related Supplemental Agreement, with LUMA Energy, LLC, the private operator of Puerto Rico’s transmission and distribution system.
The Supplemental Agreement was structured as a temporary, interim framework while PREPA remained in proceedings under the Puerto Rico Oversight, Management, and Economic Stability Act (“PROMESA”), codified at 48 U.S.C. § 2101 et seq.. Under its express terms, the interim arrangement was to terminate automatically after eighteen months—November 30, 2022—unless a valid extension was approved in accordance with applicable law.
According to the complaint filed by the Puerto Rico Public-Private Partnerships Authority and PREPA, on November 30, 2022—the same day the interim period was set to expire—the parties executed a letter agreement purporting to extend the Supplemental Agreement.
The plaintiffs allege that this letter agreement removed the automatic termination provision and replaced it with an open-ended term tied to PREPA’s exit from the PROMESA Title III process and the operator’s acceptance of a plan of adjustment, thereby altering the contractual framework governing LUMA’s continued operations.
The complaint asserts that the extension is invalid under Puerto Rico law due to the absence of approvals and certifications required for transactions involving PREPA, including approvals under the Electric System Transformation Act (Law 120), the lack of a Certificate of Energy Compliance from the Puerto Rico Energy Bureau, and the absence of legislative approval for a substantive extension under the Public-Private Partnerships Act (Law 29).
The plaintiffs do not challenge the validity of the original 2020 T&D OMA or the original Supplemental Agreement. Rather, the action is directed solely at the legality and effect of the 2022 extension.
On December 11, 2025, the San Juan Superior Court issued a Resolution and Order denying the plaintiffs’ request for an ex parte provisional restraining order. The court determined that, at this preliminary stage, the record did not establish an imminent risk of irreparable harm or circumstances warranting extraordinary relief without prior notice to LUMA. The court noted that the request focused on the production of information and documents and did not allege a risk of destruction of evidence or other conditions requiring immediate ex parte intervention.
The court did not reach the merits of the underlying claims and scheduled an in-person hearing for December 22, 2025, to determine whether preliminary injunctive relief is appropriate following full briefing and argument by the parties. A contemporaneous report on the procedural ruling was published by INDIARIO in “Tribunal deniega parte del caso del Gobierno contra LUMA Energy por no avisarle antes”.
In addition to declaratory relief, the plaintiffs seek preliminary injunctive measures requiring the production of operational, financial, technical, and system-planning information relating to LUMA’s management of the transmission and distribution system. The complaint states that the requested relief is intended to preserve continuity of electric service and to address transition-related considerations should the court determine that the extension is invalid.
The litigation is unfolding in parallel with an ongoing rate design proceeding before the Puerto Rico Energy Bureau, in which the regulator is examining how retail electric rates and cost allocation mechanisms should be structured going forward. The outcome of that proceeding is expected to influence how transmission and distribution costs, operational expenses, and system investments are reflected in customer rates. Developments in the LUMA litigation may therefore intersect with broader regulatory and financial considerations affecting utilities, large energy users, and investors operating in Puerto Rico’s electric system.
Although the litigation is limited to the validity of a specific contractual extension, the case highlights legal considerations relevant to public-private infrastructure arrangements, including statutory approval requirements for contract modifications, the role of regulatory certifications, and the treatment of interim operating frameworks that extend beyond their original term.
Issues to monitor include the court’s analysis of the statutory approval requirements applicable to the extension, the scope of any preliminary injunctive relief following the December 22 hearing, and the implications for the contractual and operational framework governing Puerto Rico’s electric transmission and distribution system during the pendency of the litigation. In addition, market participants may wish to follow developments in the Energy Bureau’s rate design case, as both proceedings may inform future governance and cost-recovery structures.
For additional coverage of Puerto Rico energy regulatory proceedings, including updates on the ongoing rate design case and related matters, see Maceira Zayas Law & Strategy’s Energy & Infrastructure Insights.
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