LUMA loses request to stay DACO suit over damaged appliances

By THE STAR STAFF

A federal judge has denied LUMA Energy’s petition to stop a lawsuit filed by Puerto Rico’s Department of Consumer Affairs (DACO by its acronym in Spanish), which seeks to hold the private energy grid operator accountable for damages to electrical appliances allegedly caused by power fluctuations.

LUMA had argued that DACO’s legal action violated the automatic stay provisions under the Puerto Rico Oversight, Management and Economic Stability Act’s bankruptcy framework. However, the court ruled that DACO’s lawsuit falls under the government’s “police powers,” which are exempt from such stays. The decision clears the way for DACO to continue its case in the Puerto Rico Supreme Court, where it is challenging a liability waiver granted to LUMA by the Puerto Rico Energy Bureau.

DACO claims the waiver unconstitutionally shields LUMA from responsibility for service failures, including voltage surges that have damaged thousands of consumer appliances. The agency is seeking to restore consumers’ right to file claims for compensation.

LUMA has warned that removing its immunity could lead to higher electricity rates, citing increased exposure to legal claims. DACO, however, insists that consumer protection must take precedence over corporate safeguards.