Welcome to the December issue of Connect Puerto Rico,

Puerto Rico’s government is making some high-stakes calls right now about how the power system is run, how much electricity costs, and how easy it is for the public to see what’s happening behind the scenes.

Officials have moved to cancel LUMA Energy’s contract to operate the islands’ electric grid. Regulators are weighing proposals that could push power bills higher. Federal watchdogs are taking a closer look at tax incentives, and lawmakers have approved changes to public records law that critics say could make it harder to get government information.

In this issue, we walk through each of these developments, explain why they matter, and flag what to watch as court cases and regulatory decisions move forward.

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Puerto Rico’s government has filed a lawsuit seeking to cancel LUMA Energy’s contract to run the islands’ electric transmission and distribution system, calling it a failure marked by chronic outages, rising bills, and broken promises (AP News). 

The lawsuit argues that a 2022 contract extension gave LUMA indefinite control of the grid without proper approvals, enforceable performance standards, or meaningful oversight.

Days later, a judge declined to grant the government’s request for immediate, emergency access to LUMA’s internal documents — but scheduled a court hearing later this month to decide whether that access should ultimately be required — keeping the case moving forward (El Nuevo Día).

This is the most concrete step yet by Gov. Jenniffer González to act on her pledge to remove LUMA. But it also underscores how much of this fight will now hinge on the legal process. The government is asking the court to rule that the contract extension itself is invalid, while LUMA insists the lawsuit is politically motivated and says it has made measurable progress rebuilding the deeply neglected grid.

Read more: Puerto Rico sues Luma in first push to cancel contract with private power company (AP News)

Juez deniega remedio provisional solicitado por el gobierno contra LUMA Energy, pero cita a importante vista judicial (El Nuevo Día)

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A few weeks ago, we sent out a year-end Subscriber Impact Survey to better understand what you want more of from Connect Puerto Rico — and what’s most useful to you right now.

If you haven’t had a chance yet, there’s still time to weigh in. Your responses help guide what we cover and how we show up in this work.

Connect Puerto Rico Subscriber Impact Survey

Puerto Rico’s Energy Bureau is holding hearings on proposed electricity rate increases from private power companies that could raise the islands’ average residential bill by at least 40% (AP News). 

The hearings, which began in mid-November and run through late December, do not include public testimony and will determine whether regulators approve new fixed charges and fees.

One proposal from LUMA Energy would raise the residential fixed charge from about $4 a month to $15 starting in January, according to industry and consumer advocates. Power companies argue the increases are needed to modernize a grid that was badly damaged by Hurricane Maria and has suffered from decades of underinvestment.

Electricity in Puerto Rico is already far more expensive than on the U.S. mainland, and a jump of this size would hit hardest in a territory where more than 40% of residents live in poverty. Critics say the proposals would place an unfair burden on low-income households and older residents, while also undermining incentives to invest in rooftop solar and energy storage.

The hearings are happening amid growing political and legal pressure on LUMA and broader frustration over persistent outages, including major islands-wide blackouts over the past year.

Read more: Puerto Rico holds hearings on proposed power bill increases as customers fume and outages persist (AP News)

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A new report from the U.S. Government Accountability Office (GAO) takes a hard look at Puerto Rico’s tax incentive programs, warning that federal oversight has been weak and that some beneficiaries may not be meeting their U.S. tax obligations (AP News).

The report was requested by Democratic lawmakers and focuses on incentives that have drawn thousands of wealthy individuals and export-oriented businesses to the islands over the past decade.

The GAO found that the exemptions could amount to hundreds of millions of dollars a year and flagged gaps in coordination between the IRS and Puerto Rico’s Treasury Department, including years when the IRS lacked complete data to verify whether recipients met residency and compliance requirements.

These incentives — created in 2012 and now consolidated under Act 60 — are a central pillar of Puerto Rico’s economic development strategy, but they’ve long been controversial on the islands. Critics argue the programs fuel inequality, drive up housing costs, and benefit wealthy newcomers more than local residents, while supporters point to job creation and investment tied to the incentives.

The GAO report adds weight to concerns that the federal government hasn’t been adequately tracking who qualifies for the breaks or whether the promised public benefits outweigh the costs, especially in a territory where more than 40% of residents live in poverty and overall economic growth has remained sluggish.

Read more:  Federal report scrutinizes Puerto Rico’s tax incentives luring wealthy Americans (AP News)

Puerto Rico Gov. Jenniffer González signed a bill amending the islands’ access to public information law, a move critics say will make it harder for residents, journalists, and watchdog groups to obtain government records (AP News).

The governor says the changes are meant to clarify rules, reduce confusion, and limit lawsuits, while also adding penalties for agencies that fail to comply.

Under the new law, government agencies now have more time to respond to records requests, broader authority to classify information as confidential, and greater flexibility to deny requests based on how information is stored or formatted.

Access to public records in Puerto Rico has long been difficult, often forcing news organizations and advocacy groups to go to court to obtain information. Journalism and civil-rights organizations argue the new law weakens the 2019 transparency statute and shifts power further toward government agencies, making oversight more difficult at a moment when public trust in government remains fragile.

Critics also point to the rushed legislative process, with limited public hearings and little opportunity for public input before the bill was approved.

Read more: Critics say new law in Puerto Rico will restrict access to public information (AP News)

🧐 Who’s Behind Connect Puerto Rico? 🧐

Hi, I’m Jillian. I’m a journalist, editor, and the founder of Connect Puerto Rico.

I started thinking about what would become C-PR after reporting from Puerto Rico in 2019. While learning about Hurricane Maria recovery, I saw how rebuilding efforts to incorporate renewables, distribute energy, and build grid resilience lacked cross-sector coordination and the input of Puerto Ricans communities and experienced industry professionals.

This newsletter connects U.S. policy decisions to what’s happening on the ground because Puerto Rico shouldn’t just recover from disasters, it should lead in building for the future.