Puerto Rico Selects LUMA Energy for $1.5 Billion Grid Privatization Following McKinsey's Recommendations, Quanta Services Connection Raises Questions

The Puerto Rico Public-Private Partnership Authority recommended LUMA Energy—a joint venture between Quanta Services and Canadian Utilities Limited—to operate Puerto Rico’s electrical transmission and distribution system for 15 years in exchange for $1.5 billion, with annual management fees of $70-105 million plus up to $20 million in ‘incentive fees.’ The contract was developed under the Puerto Rico Electric System Transformation Act and the fiscal board’s privatization framework designed by McKinsey & Company. Critically, mega-consultancy McKinsey counted Quanta Services as a client while simultaneously advising the fiscal board on PREPA privatization—creating another layer of conflict where McKinsey’s recommendations directly benefited its own corporate clients. The selection process raised serious transparency concerns: regulators excluded public stakeholders from the 18-month selection, and the contract lacked adequate public oversight mechanisms. LUMA would manage Puerto Rico’s essential electrical infrastructure (excluding power plants) without owning it, operating under a structure that prioritized profit extraction over public service. The fiscal oversight board was ’eager to see it done,’ having written in a June 2017 Wall Street Journal op-ed that ‘only privatization will enable PREPA to attract the investments it needs’—just months before Hurricane Maria exposed PREPA’s infrastructure collapse. The privatization represented the culmination of McKinsey’s post-Maria ‘shock doctrine’ strategy: using disaster and debt crisis to transfer public assets to private corporations. Former utility leaders and consumer watchdogs warned the deal would increase costs while reducing accountability, but the unelected fiscal board and colonial governance structure left Puerto Ricans powerless to stop the transfer of their electrical infrastructure to mainland corporations.