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Regulator Will Probe Alleged Irregularities in Prepa Billing Practices

By on March 1, 2021

A screen capture of a Feb. 17 PREB meeting.

Looks into OIPC Complaint Accusing Public Utility of Overcharging Customers 

SAN JUAN – The Puerto Rico Energy Bureau (PREB) announced Friday that it would start an investigation into allegations that the Puerto Rico Electric Power Authority (Prepa) is conducting billing estimates that may be violating the law. 

In a resolution on the matter signed by PREB Chairman Edison Avilés Deliz and bureau commissioners Lillian Mateo Santos, Ferdinand A. Ramos Soegaard, and Sylvia B. Ugarte Araujo, the regulator said that it accepted a request for the probe filed on Feb. 23 by the Independent Office for Consumer Protection (OIPC by its Spanish initials), which alleges that Prepa is using accumulated billing estimations to overcharge customers. 

“The OIPC contends that, based on information provided by several customers of [Prepa] who have come to request its services, Prepa has been engaging in the practice of estimating bills for long periods of time, sometimes for years, which results in a subsequent adjustment. According to the OIPC, in some cases, the referred adjustments exceed thousands of dollars,” the PREB resolution states. 

According to Section 6 of Act 83 of 1941, Prepa has 120 days to correct calculation errors on residential bills. At the end of this period, the utility cannot claim retroactive charges unless customers keep meters out of visual reach of Prepa readers or in force majeure events. The OIPC contends that in the cases received in its office, the adjustments were made after the term ended.  

Moreover, The OIPC requested that PREB issue corrective measures that it deems necessary to address the situation. 

The bureau determined that it has the “jurisdiction, power and authority” to carry out the investigation, delegating the probe to Commissioner Angel R. Rivera de la Cruz, who the resolution states has the power to summon witnesses, hold hearings, take sworn testimony, and issue a final report on the investigation. 

“Moreover, due to the high public interest that [Prepa] comply with all of the legal and regulatory provisions regarding electric service billing, [PREB] determines it is prudent and necessary to carry out a comprehensive investigation regarding estimated consumption billing,” the resolution states. 

Act 57 of 2014, which created PREB, authorizes the bureau to carry out inspections, investigations and audits, if necessary, to achieve the objectives of the aforementioned law. It also establishes that the bureau will have investigative and adjudicative regulatory jurisdiction over [Prepa] and any other certified energy company that renders services in Puerto Rico. Likewise, the law gives the regulatory agency jurisdiction to investigate any matter that refers to compliance with laws that affect the execution of public energy policy and the purposes of said law. 

The possible violation of the terms authorized by Act 57 could affect the reliable service that Prepa must offer, thereby violating the public energy policy of the government of Puerto Rico. In addition, it would have “the effect of restricting the right of consumers to exhaust administrative remedies and their due process of law, forcing them to make imprecise, unfair, and unreasonable payments through a process plagued by a lack of transparency and correction,” the bureau affirms in the resolution, which states that Prepa cannot make corrections to bills 120 days after they are issued, unless customers specifically request an adjustment under Act 272 of 2002, even when the customers object to the bill. This law amended Act 83 of 1941 to impose a maximum term on the public utility of 120 days, counted from the issuance of the invoices for the consumption of electricity, to notify customers of calculation errors in the charges. 

On Wednesday, OIPC Executive Director Hannia Rivera Díaz said that she filed the request for the probe of the Prepa billing correction practice, explaining that since a few months ago, she noticed a considerable increase in the number of utility customers who go to her office in search of a solution to the fact that Prepa estimates their electricity consumption for prolonged periods, sometimes years, and then receive an invoice with an adjustment identified as a “bill correction” or as “current charges.” 

“In the bills of some of these consumers, the charges exceed thousands of dollars and it is not until the citizen takes steps with [Prepa] that they become aware that the main reason for such a charge is the practice of estimating the invoices,” the official explained in a statement. “Although it is true that the estimation of invoices in itself is not a practice that is prohibited by law, the bill corrections that the Authority makes as a result of said action are illegal, as they exceed the 120 days allowed by Act 272-2002 for reporting calculation errors. It should be noted that, in 100 percent of the cases dealt with at the OIPC, the bill corrections made exceed the aforementioned term.” 

The OIPC director also indicated that she unsuccessfully negotiated with Prepa representatives, adding that they argued that if the affected consumers do not specifically request that an adjustment be made under Act 272, utility employees do not perform the adjustment even when the customer objects to the bill. 

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