Private Companies Sue Luma Energy for $310M 

The lawsuit plans to represent all business and residential customers of the company, which blames its inefficient service on the poor state of the island’s power grid.

A group of private companies filed a lawsuit against Luma Energy, claiming inefficient service and frequent blackouts that have affected Puerto Rico ever since Luma took over the transmission and distribution of the local power grid almost a year ago.

The lawsuit was filed on April 25 on behalf of Wendco of Puerto Rico Inc., MultiSystem Restaurant Inc., Restaurant Operators Inc. and Apple Caribe Inc, which are in charge of the operation of US food franchises such as Wendy’s, Sizzler, Red Lobster, Olive Garden, LongHorn Steakhouse and Applebee’s.

The lawsuit seeks $310 million in compensatory damages and economic losses caused by frequent and, on several occasions, massive blackouts, like the one on April 6.

The plaintiffs expect the court to certify class A and class B lawsuits. Class A would represent the plaintiff companies and all merchants doing business on the island and receiving services from Luma Energy. Class B represents Manuel Couvertié Barrera and all residential customers of Luma. Class A would represent some 80,000 businesses and class B 1.5 million residential customers.

The lawsuit explains that the April 6 blackout caused losses to the economy estimated at $500 million, according to economic studies, for those represented in classes A and B.

LUMA Energy said in written statements to El Nuevo Día that it understood the frustrations caused by the April 6 blackout, but defended its performance by saying that the power grid “remains incredibly fragile due to years, if not decades, of neglect and lack of maintenance under the previous operator.”

A report from Puerto Rico’s Energy Bureau found that customers suffered more power outages in the first three months (June-August, 2021) of Luma’s transmission and distribution of electricity on the island, compared to past metrics.

However, at the end of March, the Bureau granted the company the sixth consecutive increase in rates it has requested since it began. Puerto Rico is among the places with the most expensive electricity in the world, although it has one of the most obsolete grids.