DACO sues LUMA to allow customers to claim damages caused by power outages

Consumer Affairs Secretary Valerie Rodríguez Erzo

By The Star Staff

Consumer Affairs (DACO by its acronym in Spanish) Secretary Valerie Rodríguez Erzo filed a lawsuit on Tuesday in the San Juan Court of First Instance to declare unconstitutional a clause that prevents consumers from filing claims for damages against LUMA Energy.

“Today I am here before the Court of First Instance because we have just filed a very important case in favor of all Puerto Ricans and all consumers,” Rodríguez Erzo said in a public statement. “Over the past four years, thousands have filed complaints against LUMA for the disastrous electrical system and its negligence, but this company has relied on an immunity clause granted to them by the Energy Bureau in 2021.”

The disputed clause -- Section 4.1(g) of the contract between the government of Puerto Rico and LUMA Energy -- exempts the company and its employees from liability for claims for damages caused by failures in the electrical system, even in the case of negligent acts. According to the document filed by DACO, the immunity was granted administratively, without legislative intervention, which, according to the agency, violates the Constitutions of Puerto Rico and the United States.

“DACO has the legal standing to bring this case,” Rodríguez Erzo stated. “We ask the court to declare this clause and the resolution that authorized it unconstitutional, as it takes away consumers’ right to claim damages when there is negligence.”

The secretary argued that the immunity clause makes LUMA an entity “with carte blanche not to respond” and that not even the former Puerto Rico Electric Power Authority enjoyed that type of legal protection. The lawsuit also alleges that the immunity was granted without going through the Legislative Assembly, as required by law for provisions that limit citizens’ rights.

“This type of immunity has never been seen in any other jurisdiction in the United States,” Rodríguez Erzo said. “Puerto Ricans cannot be deprived of their right to file a claim when a private entity, which has received billions in public funds, acts negligently and causes harm to third parties.”

In its lawsuit, DACO requests that the immunity clause be declared void and that all citizens be allowed to file claims in court for damages related to interruptions or fluctuations in electrical service.

In civil lawsuit K AC2025CV05155, DACO asks the court to declare Section 4.1(g) of the contract entitled Puerto Rico Transmission and Distribution System Operation and Maintenance Agreement, signed between the government of Puerto Rico and LUMA Energy, unconstitutional and void. The clause prevents consumers from claiming damages caused by ordinary negligence attributable to the company, its personnel, or contractors.

The lawsuit also challenges the validity of the Final Resolution and Order of May 31, 2021, issued by the Puerto Rico Energy Bureau, which allowed the challenged clause to be formalized without the approval of the Legislative Assembly.

DACO argues that such legal protection grants a private entity immunity that is contrary to the constitutional principles of separation of powers and due process of law. The agency maintains that the only valid way to grant this type of immunity is through legislation passed by the Puerto Rico Legislature.

The lawsuit includes case law and constitutional doctrine, in addition to expressly citing the negative effect of the immunity on consumers’ right to claim for damage to their belongings and property. It also points out that, according to LUMA’s admission in a public hearing in the House of Representatives, the company has received more than 1,800 complaints, but is not addressing them due to the clause that protects it from liability.

DACO’s pleas include a declaratory judgment and express recognition of consumers’ right to file claims for damages against LUMA for ordinary negligence, as part of the protection framework that must prevail in favor of the public interest.

LUMA reacts

“We have learned about the lawsuit filed against PREPA and LUMA today by the Department of Consumer Affairs (DACO). Once we receive the official notification, we will address it with the seriousness and responsibility it deserves through the Court,” LUMA Energy said in a statement. “Our commitment is to continue working for the benefit of our customers, despite the significant challenges we face in operating a fragile and deteriorating electrical system, which for years has lacked the necessary maintenance and investment.”