LUMA to appeal ruling against liability protection for damaged appliances

By THE STAR STAFF

LUMA Energy is appealing a recent ruling denying a request to halt a lawsuit filed by the island Department of Consumer Affairs (DACO) that would force the private grid operator to pay for damaged consumer appliances.

Through its counsel, DLA Piper, the operator of the Puerto Rico Electric Power Authority’s (PREPA) transmission and distribution system filed a notice of the appeal last week.

Last month, U.S. District Judge Laura Taylor Swain denied LUMA’s request to halt a lawsuit filed by DACO in the island’s Supreme Court. The lawsuit challenges a clause in LUMA’s contract with PREPA that exempts the company from liability for damages to consumer appliances and equipment resulting from blackouts or energy interruptions. Swain oversees PREPA’s bankruptcy procedure under Title III of the Puerto Rico Oversight, Management and Economic Stability Act, commonly known as PROMESA.

Following the ruling, LUMA reiterated that any ruling that limits or eliminates its liability exemption would affect the contractual mechanisms designed to protect both system operations and customers. This could translate into a negative economic impact on consumer bills, the company noted.

DACO argues that the immunity clause violates consumer rights by shielding LUMA from responsibility for damages caused by power outages or system failures.

The federal court determined that DACO’s lawsuit is not subject to the automatic stay under PREPA’s bankruptcy proceedings, concluding that the case involves the exercise of Puerto Rico’s regulatory and public protection powers.