The power company fails to maintain its equipment, and the resultant power surge fries your electronics and appliances. Sure, it's their fault. But do they have to pay? You'll find the answer shocking.
If, through negligence, neglect or just bad luck, someone destroys your property, they’re typically liable to repair or replace it.
Or are they? The answer is not as simple as you might think.
Here’s this week’s reader question:
I live in Florida. About five months ago I awoke to find four of my kitchen appliances were all burnt out. I called my electric provider, who came out and discovered that my terminal out at the street was severely corroded and caused the “negative neutral” that fried my appliances. They fixed the terminal but, despite much effort in communicating with the company and their insurance company, they denied any liability. Meanwhile, I have four appliances that are shot to the tune of about $1,250. I don’t know where to turn. It was their equipment which they neglected to properly inspect and maintain that obviously caused the problem. I would really appreciate any advice. I’m retired with a fixed income and probably can’t afford an attorney. Has anyone ever won a case against a utility company with similar circumstances? — Keith
Before we get to Keith’s troubles, here’s a video I did last year. It’s called “Why Today’s Appliances Suck.”
Now, let’s get to Keith’s question.
If someone messes up your stuff, they have to pay. Right?
Generally, the answer to that question is yes. If I run a red light and hit your vehicle with my car, I’m responsible for the damage to both you and your car. If you drop a bowling ball on my foot, you should have to pay my medical expenses. When we’re at fault, we pay. That’s only fair.
As most of us have discovered, however, life isn’t always fair.
I sent an email to the Florida Public Service Commission asking about damage to appliances through the negligence of a utility provider. The following is part of the response I got back from their spokesperson. It’s from the Tariff, the set of rules defining the relationship between a utility and its customers.
The [utility] company will use reasonable diligence at all times to provide continuous service at the agreed nominal voltage, and shall not be liable to the customer for complete or partial failure or interruption of service, or for fluctuations in voltage, resulting from causes beyond its control or through the ordinary negligence of its employees, servants or agents.
The customer shall indemnify, hold harmless and defend the company from and against any and all liability, proceedings, suits, cost or expense for loss, damage or injury to persons or property, in any manner directly or indirectly connected with, or growing out of the transmission and use of electricity on the customer’s side of the point of delivery.
So this says the Public Service Commission is granting immunity to the power company for any problems it causes, including those resulting from the ordinary negligence of its employees.
Why would a Public Service Commission, whose job it is to represent customers, let utilities off the hook? In a 2012 article from The Palm Beach Post concerning another customer whose appliances were fried in a situation similar to Keith’s, a spokesperson from the Public Service Commission said this:
These clauses protect the company from excessive insurance costs, keeping electric rates reasonable. Without these provisions, insurance costs to the company would be passed on to the consumer, making electric rates prohibitively expensive.
That statement would make a lot more sense if public utilities were nonprofit organizations rather than for-profit monopolies. Nextera, for example, the company that owns Florida Power & Light, made $423 million in profits in just the last quarter.
That’s probably more than Keith and I made combined, although we’re liable when we screw up.