Demanda Federal Ajuste Combustible AEE

36
1 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO DUAMEL SANTIAGO-RAMOS, INDIVIDUALLY AND AS REPRESENTATIVE OF THE CONJUGAL PARTNERSHIP OF SANTIAGO MARINES RIVERA FIGUEROA, INDIVIDUALLY AND AS CLASS REPRESENTATIVE, and CARIBBEAN ECONOMIC COUNCIL, INC. PLAINTIFF VS. AUTORIDAD DE ENERGIA ELECTRICA DE PUERTO RICO, AKA PUERTO RICO POWER COMPANY [PREPA] and MARIMAR PÉREZ-RIERA, CHAIR,BOARD OF DIRECTORS INDIVIDUALLY, AND AS PRESIDENT OF THE BOARD OF DIRECTOR. DOES A-Z ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) / Case No.: CLASS ACTION COMPLAINT SEEKING DAMAGES EQUITABLE AND INJUNTIVE RELIEF Demand for jury trial CLASS ACTION COMPLAINT Plaintiff[s] sues defendant in chancery of this court. In support the appearing party state[s] and pray[s] as follows: PRELIMINARY STATEMENT 1. This class action is brought on behalf of 1.8 million customers of defendant[s] Autoridad de Energia Electrica (herein after “PREPA”) for damages suffered in the capricious, arbitrary, and predatory assessment for a fuel adjustment charge that violations the U.S. Constitution and the Robinson-Patman Act codified as 15 U.S.C. §13 for purchases involved which are , have been and continue to be in commerce, that there has been discrimination in price between different purchasers of products of like grade and quality [electric power commodity] , and Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 1 of 36

Transcript of Demanda Federal Ajuste Combustible AEE

Page 1: Demanda Federal Ajuste Combustible AEE

1

IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF PUERTO RICO

DUAMEL SANTIAGO-RAMOS,INDIVIDUALLY AND AS REPRESENTATIVE OF

THE CONJUGAL PARTNERSHIP OF SANTIAGOMARINES RIVERA FIGUEROA,INDIVIDUALLY AND AS CLASS

REPRESENTATIVE, and CARIBBEANECONOMIC COUNCIL, INC.

PLAINTIFF

VS.

AUTORIDAD DE ENERGIA ELECTRICADE PUERTO RICO, AKA PUERTO RICOPOWER COMPANY [PREPA] andMARIMAR PÉREZ-RIERA, CHAIR, BOARD

OF DIRECTORS INDIVIDUALLY, AND AS

PRESIDENT OF THE BOARD OF DIRECTOR.DOES A-Z

))))))))))))))))))/

Case No.:

CLASS ACTION COMPLAINTSEEKING DAMAGES

EQUITABLE AND INJUNTIVERELIEF

Demand for jury trial

CLASS ACTION COMPLAINT

Plaintiff[s] sues defendant in chancery of this court. In support the appearing party

state[s] and pray[s] as follows:

PRELIMINARY STATEMENT

1. This class action is brought on behalf of 1.8 million customers of defendant[s]

Autoridad de Energia Electrica (herein after “PREPA”) for damages suffered in

the capricious, arbitrary, and predatory assessment for a fuel adjustment charge

that violations the U.S. Constitution and the Robinson-Patman Act codified as 15

U.S.C. §13 for purchases involved which are , have been and continue to be in

commerce, that there has been discrimination in price between different

purchasers of products of like grade and quality [electric power commodity] , and

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 1 of 36

Page 2: Demanda Federal Ajuste Combustible AEE

2

that effect of discrimination is substantially to lessen compensation or tend to

create monopoly over the retail delivery of electric power to the consumer.

2. Counts 1-5 are constitution violation as against individual consumers, the

complaint seeks constitutional injury including damages for the differential

economic treatment between the religious, political and economic preferential

treatment, injunctive relief seeking affirmative treatment of equality in pricing

among all consumers; Count Six is the Robinson-Patman Act codified as 15

U.S.C. §13 for delivering -in commerce- the identical product at discriminatory

rates. The complaint seeks damages for the price differential with other classes of

rates charged for the same kilowatt hour commodity, injunctive relief, and

declaratory judgment that defendants have violated the Robinson-Patman Act 15

U.S.C. § 13. Count Seven is a declaratory judgment brought by Plaintiff

Caribbean Economic Counsel declaring PREPA predatory pricing violative of the

Robinson-Patman Act 15 U.S.C. § 13 and seeking injunctive relief to affirmative

require PREPA to formulate a tariff that complies with the congressional intent

Robinson-Patman Act 15 U.S.C. § 13. Count Eight is a civil rights violation under

42 U.S.C. § 1983 as against the individual capacity of defendant MARIMAR

PÉREZ-RIERA for violation of the Equal Protection clause of the Fourteenth

Amendment for applying disproportionately and benefitting certain religious

groups, by applying approving different tariffs which benefitted capriciously,

unilaterally, arbitrary, and unconstitutional formula and adjustment charges,

welfare recipients, religious groups, political associations, and municipal

subdivisions over the individual plaintiff and class of individual consumers.

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 2 of 36

Page 3: Demanda Federal Ajuste Combustible AEE

3

THE PARTIES

3. Plaintiff[s] is a conjugal partner of the conjugal partnership known as Duamel

Santiago-Ramos, Individually and as Representative of the Conjugal Partnership

of Santiago Marines Rivera Figueroa. Plaintiff demands and prays for relief in his

individual capacity and as member of the class of individual consumers which are

forced to pay for the fuel adjustments charge which contains capriciously,

arbitrarily, and unconstitutional charge that forces the individual consumer to pay

for religious and other governmental unwelcome associations. Plaintiff[s] is [a]re

at all times materials hereto are citizens of the Commonwealth of Puerto Rico

and, are sui juris. During the relatives period of time material hereto plaintiff has

maintain for (several years) an account with defendant with account number 032

0046137 0027. Plaintiff is a financial professional working at a major financial

institution in Puerto Rico.

4. Plaintiff Caribbean Economic Council is a non-profit organization to which

Plaintiff Duamel Santiago-Ramos is a member of the counsel. Plaintiff Caribbean

Economic Council brings this cause on its behalf and its entire association

members. Caribbean Economic Counsel association members are customers and

electric power consumer who have an interest to have a balance electric power

tariff so as to provide a balance economic development in the island of Puerto

Rico. Caribbean Economic Council members would otherwise have standing to

sue in their own right; (2) the interests it seeks to protect are germane to the

organization's purpose; and (3) neither the claims asserted, nor does the relief

requested, require the participation of the individual members in the lawsuit.

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 3 of 36

Page 4: Demanda Federal Ajuste Combustible AEE

4

5. Defendant PREPA is a political subdivision of the Commonwealth of PR created

by a legislative Act for the purpose of providing electric power to the

Commonwealth of PR with the most effective manner. Pursuant to 22 L.P.R.A. §

193 the defendant is hereby created a body corporate and political subdivision

constituting a public corporation and governmental instrumentality of the

Commonwealth of Puerto Rico by the name of the “Puerto Rico Electric Power

Authority” [“PREPA]. The Authority created is and shall be a governmental

instrumentality subject, as provided herein, to the control of its governing board,

but it is a corporation having legal existence and personality separate and apart

from that of the Commonwealth of Puerto Rico. The debts, obligations, contracts,

bonds, notes, debentures, receipts, expenditures, accounts, funds, undertakings,

and property of the Authority, its officers, agents or employees shall be deemed to

be those of said government-controlled corporation and not to be those of the

Commonwealth Government or any office, bureau, department, commission,

dependency, municipality, branch, agent, officer or employee thereof.

6. Marimar Pérez-Riera, Chairperson, Board of Directors individually, and as

President of the Board of Director is a natural person that manages and controls

the Board of Director and is vested with the establishment of discriminatory price

of the commodity in commerce. Defendant Marimar Pérez-Riera public policy is

to lower the cost of fuel based on the Governors policy1.

7. Does A/Z are fictional parties that are members of the governing board of

defendant PREPA that approved the discriminatory price practice and are liable

under the Robinson-Patman Act 15 U.S.C. § 13.

1 http://www.aeepr.com/noticiasread.asp?r=DESQDSWMAC

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 4 of 36

Page 5: Demanda Federal Ajuste Combustible AEE

5

8. The primary purpose of the creation of the Public corporation is to purpose the

conserving, developing and utilizing, and aiding in the conservation, development

and utilization of water and energy resources of Puerto Rico, for the purpose of

making available to the inhabitants of the Commonwealth, in the widest economic

manner, the benefits thereof, and by this means to promote the general welfare

and increase commerce and prosperity, see 22 L.P.R.A. § 196. Puerto Rico

Electric Power Authority (the Authority) is a public corporation and governmental

instrumentality of the Commonwealth of Puerto Rico (the Commonwealth)

created on May 2, 1941, pursuant to Act No. 83, as amended, re-enacted, and

supplemented, of the Legislature of Puerto Rico (the Act) for the purpose of

conserving, developing and utilizing the water, and power resources of Puerto

Rico in order to promote the general welfare of the Commonwealth. Under the

entity concept, the Authority is a component unit of the Commonwealth. The

Authority produces, transmits, and distributes, sells to consumers all of the

electric power consumed in Puerto Rico. The operating and financial goals of the

PREPA do not envision the payment of subsidies to promote religious groups,

welfare and political subdivisions subsidies, and state government finance of

electric power. As a government instrumentality PREPA maintains a tax

exemption from taxation of the state and is prohibited (by its creation) from

entertaining the notion or practice to finance the state government or pay taxes to

the state government, or its political subdivisions. When defendant PREPA was

created the goal was to provide the most efficient commodity in commerce to the

consumers of Puerto Rico and if through the efficient successful operation profits

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 5 of 36

Page 6: Demanda Federal Ajuste Combustible AEE

6

were generated only 11% would be paid to the Commonwealth of Puerto Rico. In

2010 the Commonwealth of Puerto force a payment $232,431.00 as a form of

contribution in lieu of taxes, when in fact the net income for PREPA was

$24,029,000.00 which would have required a payment of $2,643,190.00 to

conform to the organizational mandate.

9. Defendants A-Z are individual members of the board of directors appointed [in

part] by the political designation who are responsible for marinating the public

policy and price discrimination of the commodity in commerce delivered to

consumers in Puerto Rico.

GENERAL ALLEGATIONS

10. During the relative period of time the defendant PREPA has had an absolute

monopoly of the production, generation, sale, and distribution of electric power,

the defendant PREPA has become a political functionary of the party in

Government by inter alia establishing political views, borrowing moneys for

other sister agencies, lending other Governmental agencies and political

subdivisions monies, and requiring the payment of subsidies to pay for certain

political views and associations.

11. By some economists Puerto Rico's economy is considered somewhat fictitious.

Puerto Rico has very few natural resources of economic value and its economy

relies mainly on Federal Aid from the United States Government, which depends

on the industrialization programs and the tax incentives that U.S. offers. The main

government expenditures are on health, education and welfare. GDP per Capita

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 6 of 36

Page 7: Demanda Federal Ajuste Combustible AEE

7

Country Comparison establishes a reduction in per capita income in Puerto

Rico:

Country 2000 2008 2009 2010

Puerto Rico 10,000 18,100 17,400 16,300

United States 36,200 48,300 46,700 47,400

Jamaica 3,700 8,800 8,500 8,400

Cuba 1,700 9,700 9,800 9,900

12. The Puerto Rico per capita income has been declining to levels that prevent most

consumers from paying the highest electric power rated in the United States. The

available data suggests that Puerto Rico per capita income has decrease by -5.

8percent. See table

Country 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Puerto Rico 4.2 2.8 2.2 0.5 1.6 2.7 2.5 0.5 -1.2 -2.5 -3.7 -5.82

13. In 2008 the average electricity tariff in the U.S. was 9.82 Cents/kilowatt-hour

(kWh). In 2006-07 electricity tariffs in the U.S. were higher than in Australia,

Canada, France, Sweden and Finland, but lower than in Germany, Italy, Spain and

the UK. Residential tariffs vary significantly between states from 6.7 Cents/kWh

in West Virginia to 27.0 Cents/kWh in Puerto Rico. In Puerto Rico consumers are

forced to pay up to $0.27Cents/LWh, almost three times more than the average

American household.

14. Since approximately 1970’s the public corporation has been utilizing a fuel

adjustment charge that is capriciously, unilaterally, arbitrary, unconstitutional, and

2 http://www.indexmundi.com/g/g.aspx?v=66&c=rq&l=en

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 7 of 36

Page 8: Demanda Federal Ajuste Combustible AEE

8

violative of the Robinson-Patman Act, codified as 15 U.S.C. §13. The practice has

inflicted unconstitutional, and commercial injury upon plaintiff because –inter

alia- forces plaintiff to pay for subsidies, grants preferential treatment to religious

groups, provides for payment of governmental obligations of welfare subsidies to

indigent parties, finances political subdivisions (Municipalities) failure of

payments, debts services and obligations of the public corporation, and other

governmental agencies which do not pay the public corporation for the related

consumption of electric power. Provides for different prices to commercial

enterprises, over residential process, and sell the like kind product in commerce to

individuals and organizations based on social and economic basis unrelated to the

actual cost of producing the commodity. The sale of the same product to two or

more purchasers at different prices creates the violation of the Robinson-Patman

Act codified as 15 U.S.C. §13.

15. The capriciously, unilaterally, arbitrary, and unconstitutional formula and

adjustment charge, forces the individual plaintiff[s] and all individual consumer[s]

of the public corporation to unreasonably and unconstitutionally associate with

welfare recipients, religious groups, political associations, and municipal

subdivisions which the individual consumer[s] is [are] not forced to associate

because the U.S. Constitution under its First Amendment guarantees each citizen

and right of free association, a separation of church and state, and to choose what

political association to be a member or participate with.

16. Upon best information and belief, the capriciously, unilaterally, arbitrary, and

unconstitutional formula and adjustment charge forces the plaintiff and all

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 8 of 36

Page 9: Demanda Federal Ajuste Combustible AEE

9

individual class members to pay for the following: (1) Finance political

subdivisions in a sum of $190,400,000.00 (2) pay for subsidies in residential

services in an amount of $29,600,000.00; (3) Pay for churches and other nonprofit

associations the sum of $3,500,000.00; (4) pay for finance of tourisms subsidies

in the amount of $6,500,000.00; (5) residential subsidies to public housing and

public projects in amount of $18,100,000.00; (6) finance and pay for subsidies to

industries $9,800,000.00; (7) finance and pay for the development incentive laws

for Puerto Rico development $15,015,000.003; (8) finance and pay for agricultural

subsidies in the amount of $1,800,000.00 (other subsidies to the elderly, students

public projects of RH3, these include subsidies to persons who receive welfare or

nutritional assistance programs); (9) pay for and finance public education electric

power in a sum of $90,000,000.00.

17. The United States Congress created The Federal Power Act is a law appearing in

Chapter 12 of Title 16 of the United States Code, entitled "Federal Regulation and

Development of Power". The act created the Federal Power Commission (FPC)

(now the Federal Energy Regulatory Commission) as the electric power

regulatory commission. FERC Order No. 2000 at 332 establishes that

Competition and Consumer Protection Perspectives on Electric Power Regulatory

Reform are the public policy of the federal agency: Focus on Retail Competition

organizations to manage reliability, pricing, congestion management, planning,

expansion, and interregional coordination are critical to effective wholesale and

retail competition programs are essential to the United States. The public policy

of the Federal Agency is to promote competition in the generation of wholesale

3 $140,000,000.00 in nine years.

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 9 of 36

Page 10: Demanda Federal Ajuste Combustible AEE

10

and retail sale electric power to consumers like plaintiff. Defendant PREPA

maintains and absolute monopoly over the production, distribution and sales of

electric power in Puerto Rico. PREPA denies plaintiff and all Puertorican

consumers of the public policy and opportunity to benefit from the federal public

policy. In recent PREPA financial publication defendant has admitted to have a

strong credit rating because it maintains a complete monopoly (exhibit A) in

Puerto Rico. In the same report defendants admits that is strong credit rating is

supported by “Sole Provider of an essential service”; “Fuel rate setting

Authority”; “fuel and setting power passed through” (exhibit A). It is this over

exercise of power that has led defendant to violate the consumer’s rights under the

United Sates Constitution and laws of the United States, by requiring forced

association with religious and political parties, and pay for welfare subsidies and

benefits to advance other political views of the Government in power through in

the fuel adjustment charge formula.

18. As a utility company defendant PREPA is capable of producing 5839 MW of

electricity, while most peak at 3404 MW. Established in 1941, a commonwealth

government public corporation, PREPA ranks fifth among the largest public

power-utility companies in the U.S. in terms of megawatt-hour (mWh) sales, just

behind the Los Angeles Department of Water & Power, and first in terms of

electric revenue.

19. With over 1.8 million customers residential clients accounted for 34.6% of

PREPA’S electric-energy revenue, commercial $1.17 billion or 45.1%, industrial

17.1, for a total of over $4 billion in electric-energy revenue in fiscal 2009.

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 10 of 36

Page 11: Demanda Federal Ajuste Combustible AEE

11

20. The commonwealth government is PREPA’S largest client. The public sector,

which is comprised of the central government and its public corporations and

municipalities (included primarily in the commercial category), accounted for

12.1% of kilowatt-hour (kwh) sales and 13.7% of revenue from electric-energy

sales for the 12-month period ended Dec. 31, 2004.

21. Public hearings are required before setting permanent rates, with final approval

vested solely within PREPA. Puerto Rico Law No. 21, approved May 31, 1985,

provides uniform procedures for public hearings and review of the actions of

certain public corporations in connection with rate changes set by such public

corporations. The law also authorizes the Legislature by resolution to review rates

of certain public corporations, including PREPA. At the request of another public

corporation under Law 21, the justice secretary has rendered an opinion to the

effect that it doesn’t grant veto power to the Puerto Rico Legislature over rates

properly adopted by such public corporation. Since 2004 11% of PREPA’S gross

electric-energy sales are being used by the utility to fund its government-subsidy

programs, to pay contributions in lieu of taxes to the municipalities, to finance the

utility’s capital-improvement programs, and for other purposes. In 2009 PREPA

gave in form of contribution (in lieu of taxes) the sum of $224,792,000.00 and

charged its customers the sum as part of the fuel adjustment charge which in 2009

account for 73% of the revenues of PREPA. This assessment of contribution is a

form of taxation upon electric consumers which PREPA is not authorize to asses

as part of the fuel adjustment formula.

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 11 of 36

Page 12: Demanda Federal Ajuste Combustible AEE

12

22. The increase in the purchased power adjustment revenue and expense of $24.9

million and $21.9 million, respectively, was due to an increase of 243,159 MWh

(or 3.6 percent) purchase power for fiscal 2010 when compared to fiscal 2009.

The increase in the purchased power adjustment revenue and expense of $6.9

million and $10.8 million, respectively, was mainly due to an increase of 1.0 cent

(9.9 percent) per kWh in the average price of purchased power for fiscal 2009

when compared to 2008. The increase in the purchased power adjustment revenue

and expense of $36.8 million and $36.4million, respectively, was mainly due to

an increase of 312,676 MWh (4.5 percent) purchased power for fiscal 2008, when

compared to fiscal 2007. See audited financial statement. In the audited financial

statements from PREPA it is clearly established that liabilities

($9,184,621,000,000) exceed assets ($9,081,005,000,000) and the fuel adjustment

charge is used to support government expending unrelated to the cost of fuel,

amounting to the consumer of electric power into unconstitutional taxation. In

2010 PREPA provided the central government with $224,792,000.00 in lieu of

taxation. This amount was assessed against the fuel adjustment charge as a form

of unauthorized taxation to support the political goals of the Commonwealth of

Puerto Rico, resulting in a financial bankruptcy of the public utility for on related

utility business4.

4

http://www.aeepr.com/INVESTORS/DOCS/Financial%20Information/Annual%20Reports/Final%202010%20FS%20PREPA.pdfFor fiscal year ended June 30, 2010, as compared to June 30, 2009, Net Assets decreased by $142.8 million.The reduction in Net Assets was mainly due to an increase in operating expenses of $171.9 million, mainly dueto increases of $38.9 and $37.8 in the Administrative and General and Depreciation Expenses, respectively, aswell as increases in Interest Expense and Contribution in Lieu of Taxes.

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 12 of 36

Page 13: Demanda Federal Ajuste Combustible AEE

13

23. In the month of August 2011, the individual Plaintiff was forced to pay a fuel

adjustment charge [for fuel purchased in interstate commerce there is no

production of oil of fossil fuels in Puerto Rico] in the amount of $0.208515, or

$0.21 per kilowatt hour, this rate was in addition to the standard rate of $.037693

per kilowatt hour. When comparing the fuel adjustment charge with other public

municipalities in the United States, defendant PRPA charges unreasonable

amounts of fuel adjustment charge. When compare with Public Utility Harrison

County Utility a cost of $0.09 is the published rate for that public utility

corporation, when comparing fuel adjustment rates with Anderson Municipal the

rate of the Municipal Corporation is $0.87 per kilowatt hour. Defendant’s fuel

adjustment rate exceeds more than double the rates of similar municipal utilities

which are forced to purchase the same fuel in the open market. When comparing

fuel adjustment charges with other jurisdictions we find that defendants have not

protected plaintiff equally under the law because through the United States fuel

adjustment charges charged by defendants are disparate with the reality of the fuel

market. The National Residential Consumer Bill for others Municipal Utility

Corporations established the capricious and unreasonably fuel adjustment charges

with culminates in unconstitutional taking, association and equal protection:

JURISDICTIONAL ELECTRIC UTILITYRESIDENTIAL CUSTOMER BILL SUERVEY

[July 1, 2011 Billing] By Utility Name and Type

kWH ConsumptionOverall

MUNICIPALUTILITIES

500 1000 1500 2000 Ranking*

Anderson Municipal $ 51.88 $ 93.92 $ 135.95 $ 175.78 13

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 13 of 36

Page 14: Demanda Federal Ajuste Combustible AEE

14

Auburn Municipal 36.32 67.63 98.95 130.27 22Columbia City Municipal 53.23 98.41 143.59 188.76 9Crawfordsville Municipal 52.97 90.95 128.92 166.90 14Frankfort Municipal 46.53 82.79 119.04 151.00 21Kingsford HeightsMunicipal

49.16 94.82 140.48 186.13 11

Knightstown Municipal 49.43 94.25 134.77 175.29 12Lebanon Municipal 47.48 88.18 125.09 161.99 18Logansport Municipal 59.69 110.57 159.03 206.49 6Mishawaka Municipal 47.22 84.45 121.68 158.90 20Peru Municipal 51.34 96.10 139.25 182.41 10Richmond Municipal 52.35 89.16 125.97 161.04 15Tipton Municipal 47.16 88.32 127.19 166.06 17COOPERATIVEUTILITIESHarrison County REMC $ 69.51 $ 115.09 $ 156.75 $ 198.40 3Jackson County REMC 65.51 113.02 160.53 208.04 5Marshall County REMC 83.50 147.50 200.00 252.50 2Northeastern REMC 66.25 114.06 161.86 204.16 4INVESTOR OWNEDUTILITIESDuke Energy Indiana $ 62.81 $ 104.61 $ 141.53 $ 178.49 8Indiana Michigan PowerD/B/A AEP

45.72 84.65 123.57 162.50 19

Indianapolis Power &Light Co.

55.68 88.86 122.03 155.20 16

Northern Indiana PublicService Co.

58.56 110.37 162.17 213.98 7

So. Indiana Gas &Electric Co. D/B/AVectren

83.05 155.10 227.15 299.20 1

*Overall Ranking based onTotal Rate at 1000 kWhconsumption.

SPECIFIC ALLEGATIONS

24. The capriciously, unilaterally, arbitrary, and unconstitutional formula and

adjustment charge forces the plaintiff and all individual class members to

associate with municipalities that do not pay for the electric service. On the last

annual reportage of $190,400,000.00 is the amount believed to have been charged

the individual consumer who neither desires to associate with a municipal

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 14 of 36

Page 15: Demanda Federal Ajuste Combustible AEE

15

corporation[s] nor is required to finance the political subdivision or existence, or

even associate with public housing (residenciales publicos).

25. The capriciously, unilaterally, arbitrary, and unconstitutional formula and

adjustment charge forces the plaintiff and all individual class members to

associate with political goals and views of providing subsidies to public housing

which has traditionally become zest pools of crime and violence, while good

citizens are sometimes force to live in such housing, the individual consumer is

guaranteed by the First Amendment a right not to associate with such subsidies. In

–particular the published fuel adjustment factor:

FCC ($/kWh) $/BBL BBLS estimados Ajuste C0.89

includes factors that contain further factors that included payments to the central

government payments and political subdivisions such as Municipalities. These

factors have an unconstitutional result which forces association with the payments

of subsidies to indigent and or welfare recipients, political association pay the

finance of political subdivisions, and agencies of the state, creates a de facto

taxing authority without legislature power to tax, and take property (individual

monies) without just compensation. The multitude of discriminatory tariff and aid

to welfare projects at the cost of the individual consumer create violation of the

Robinson-Patman Act 15 U.S.C. § 13, by assessing different rates in commerce

for the same like commodity (electricity)5.

5 Electricity is a “commodity” for purposes of the Robinson-Patman Act, amending this section and addingsections 13a, 13b and 21a of this title. Borough of Ellwood City, Pa. v. Pennsylvania Power Co., W.D.Pa.1983,570 F.Supp. 553.

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 15 of 36

Page 16: Demanda Federal Ajuste Combustible AEE

16

26. The basic residential rate [GRS] as published by the defendants includes $ 35 for

the first 425KWH and $4.97 for additional kWh. When comparing this rate to the

special residential rate [LRS] (given to indigents and public housing recipients)

the rate is reduced for the same basic like kind commodity to a rate of $1.46 for

the first 425 kWh, an $18.00 maximum charge for cost of barrel of fuel, costing

today in excess of $80.00, and after consumption of 425 kWh there is a 100%

Negative adjustment, thus providing the cost of the commodity for all electricity

used or consumed in excess of 425 kWh to the paying consumers restricting trade,

price determination, quantity of output, terms of transactions and unreasonable

restrained of trade.

27. The capriciously, unilaterally, arbitrary, and unconstitutional formula and

adjustment charge forces the plaintiff and all individual class members to

associate with churches which are separated by the First Amendment from go The

capriciously, unilaterally, arbitrary, and unconstitutional formula and adjustment

charge forces the plaintiff and all individual class members to associate with

religious groups which are not the religious belief of consumers who must

nonetheless pay and finance the fuel adjustment charge.

28. The capriciously, unilaterally, arbitrary, and unconstitutional formula and

adjustment charge forces the plaintiff and all individual class members to

associate with the finance of industries such as tourism, finance income producing

entities such as hotels, governmental agencies, political groups and projects.

29. The Agricultural gross domestic product in Puerto Rico accounts for less than one

(1%) of the gross domestic product of the Island. Defendant in violation of the

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 16 of 36

Page 17: Demanda Federal Ajuste Combustible AEE

17

Robinson-Patman Act provide a subsidize rate to agricultural services (GAS)

these consumers pay less than $0.054 per Kwh, and others consumers must pay

for the cost of subsidy paying consumers restricting trade, price determination,

quantity of output, terms of transactions and unreasonable restrained of trade.

30. The rates charged for parks is [LP-13] $0.0900 cents per Kwh for the first kWh.

In cases where these parks are owned by a municipality the subsidize payment is

generally not collected and forced to be finance through the fuel adjustment

charge. Consumers must pay for the cost of subsidy restricting trade, price

determination, quantity of output, terms of transactions, enhancing the monopoly,

and unreasonable restrained of trade.

31. The street and highway [PLG] is charged at $0.07 cents per kWh to the

appropriate Government agency who in turn does not pay for the service and

places a financial burden upon the individual consumer who must pay the burden

of the highest rate charged by defendants, and the loss of electric power when

payment is not made. Consumers must pay for the cost of subsidy restricting

trade, price determination, quantity of output, terms of transactions, enhancing the

monopoly, and unreasonable restrained of trade.

32. The capriciously, unilaterally, arbitrary, and unconstitutional formula and

adjustment charge forces the plaintiff and all individual class members to pay and

finance subsidies, political groups churches, because the fuel adjustment charge

requires each individual consumer, like plaintiff, to finance these governmental

projects, the same is a taking under the takings clause of the U.S. Constitutions,

which is not for public use, and does not provide for just compensation.

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 17 of 36

Page 18: Demanda Federal Ajuste Combustible AEE

18

33. The Low Income Home Energy Assistance Program (LIHEAP) received federal

funding of $5.1 billion in Fiscal Year 2009. It is funded mainly by the federal

government through the U.S. Department of Health and Human Services,

Administration for Children and Families, and is administered by states and

Puerto Rico. LIHEAP offers financial assistance to qualifying low-income

households who require support in paying their home heating or cooling bills. The

capricious fuel adjustment charge requires plaintiff to pay for these subsidies

when there are federal programs that already account for these subsidies and the

payment of subsidies is a form of taxation when the defendant public corporation

has no taxing authority. The public housing residential rate [RH3] the rate is

fixed at $2.00 per client with a 100% credit for consumption of electric service

over 425Kwh. There is also a maximum $0.033 charge for each Kwh in excess of

425Kwh. This rate results in an unequal, discriminatory, unconstitutional finance

and association with welfare, and with the nexus and assistance to certain drug

points which locate themselves in these privilege/subsidize locations throughout

Puerto Rico. Consumers must pay for the cost of subsidy restricting trade, price

determination, quantity of output, terms of transactions, enhancing the monopoly,

and unreasonable restrained of trade.

34. In the 2010 financial PREPA audited financial statements PREPA admits that

PREPA spent $ 2,006,000,000.00 purchasing of fuel. The fuel adjustment charge

generated 72% of revenues of $4,170,000,000.00 or $3,000,000,000.00 for

PREPA establishing an increase over one billion dollars in excess of the actual

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 18 of 36

Page 19: Demanda Federal Ajuste Combustible AEE

19

cost of fuel6. It is the billion dollars in excess of costs that has gone to pay the

unconstitutional religious and welfare and government subsidies and association,

creating a de facto taxing authority to pay for theses political goals of the

Commonwealth of Puerto Rico. These excess charges and payments to the

Commonwealth in lieu of taxation violate the purpose and reason for which

PREPA was created, i.e. to provide the most efficient electric power to the

consumer have culmination in unconstitutional violations and restriction in trade

by enhancing the monopoly to sell electric power in Puerto Rico.

35. During the relative period of time from 2008 to 2011, the defendant PREPA had

an executive director (Angel Cordero). During the relative period of time in 2011

Mr. Angel Cordero after making payments to the Central Government of

$232,431,000.00 gave his closed associates and employees a 50% salary increase

resulting in millions of dollars in salary costs to chosen employees thereby

increasing the fuel adjustment charge to consumers. These excessive salary

increases were predatory non market related price increases that violated the

Robinson-Patman Act. The payments of $232,431,000.00 placed the defendant

PREPA in a bankrupt position because its liabilities exceeded the assets,

expecting only to increase the cost of the interstate purchase fuel to produce

electricity to its consumers when these financial transactions beard no free market

economic purpose. Upon political pressure the executive director resigned and

was replaced (within 24 hrs.) with Mr. Antonio Escudero, who had directed the

Puerto Rico Ports Authority. During the tenure of Mr. Antonio Escudero at the

6

http://www.aeepr.com/INVESTORS/DOCS/Financial%20Information/Annual%20Reports/Final%202010%20FS%20PREPA.pdf

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 19 of 36

Page 20: Demanda Federal Ajuste Combustible AEE

20

Puerto Rico Ports Authority had compiled over $50,000,000.00 dollars in unpaid

subsidized electric consumption and had not paid their share of consumed

electricity. Upon review of Mr. Alberto Escudero background, the public and the

board of directors learned that the now Executive Director had have an incident in

2006 where a devise to alter the measuring of expenditure of electricity had been

found at his domicile in Dorado, Puerto Rico. The board of directors terminated

the 36 hour tenure of the political appointment to lead the public utility.

SPECIFIC ALLEGATION VIOLATIONS OF THEROBINSON-PATMAN ACT CODIFIED AS 15 U.S.C. §13

36. The defendants’ purchases in interstate commerce barrels of fuel which in turn the

convert to the commodity of electricity. The electricity is delivered in commerce

to over 1.8 customers which the defendant maintains an absolute monopoly for

the sales and purchase of electricity. The defendant PREPA formulates

unilaterally the fuel adjustment price for the fuel purchase from outside of Puerto

Rico.

37. The defendants formulate several tariffs that is/are discriminatory because it

provides for different rates to social and economic groups not based on the cost

associated with the production cost but discriminatory based on political and

social goals of the central government. When congress, through enactment of the

Robinson-Patman Act 15 U.S.C. § 13, sought generally to obviate price

discrimination practices threatening independent consumers, merchants and

businessmen, presumably, from whatever source, and intended to assure, to the

extent reasonably practicable, that businessmen at the same functional level

would start on equal competitive footing so far as price was concerned. The

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 20 of 36

Page 21: Demanda Federal Ajuste Combustible AEE

21

section forbidding price discriminations where effect may be substantially to

lessen competition or tend to create a monopoly in any line of commerce was

originally enacted to curb use by financially powerful corporations like defendant

PREPA to localized price cutting tactics which impaired competitive position of

others like plaintiff and the class or consumers represented.

38. Pursuant to 15 U.S.C. § 13(a) it shall be unlawful for any person engaged in

commerce, in the course of such commerce, either directly or indirectly, to

discriminate in price between different purchasers of commodities

[fuel/electricity] of like grade and quality, where either or any of the purchases

involved in such discrimination are in commerce, where such commodities are

sold for use, consumption, or resale within the United States or any Territory

thereof or the District of Columbia or any insular possession or other place under

the jurisdiction of the United States and where the effect of such discrimination

may be substantially to lessen competition or tend to create a monopoly in any

line of commerce, or to injure, destroy, or prevent competition with any person

who either grants or knowingly receives the benefit of such discrimination, or

with customers of either of them: 15 U.S.C.A. § 13. The tariffs charge for deferent

types of customers receiving like kind electric service over those commercial

rates, and those subsidized rate are tantamount to violation of the Robinson-

Patman Act. Plaintiff in the instant case is charging, and has charged, higher

residential rates than those charges to public housing, customers receiving

financial aid or political subdivision which are prohibited from charging or

assessing a tax against another governmental agency. Similarly, defendant is

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 21 of 36

Page 22: Demanda Federal Ajuste Combustible AEE

22

charge a rate that discriminates over commercial users of the same commodity

(electricity) and industrial users. Similarly, the Act prohibits (e) Furnishing

services or facilities for processing, handling, etc. It shall be unlawful for any

person to discriminate in favor of one purchaser against another purchaser or

purchasers of a commodity bought for resale, with or without processing, by

contracting to furnish or furnishing, or by contributing to the furnishing of, any

services or facilities connected with the processing, handling, sale, or offering for

sale of such commodity so purchased upon terms not accorded to all purchasers

on proportionally equal terms.

39. The advertised rates for defendant PREPA are as follows:

MONTH RESIDENTIAL COMERCIAL INDUSTRIAL

JUL 2011 27 ¢/kWh 28 ¢/kWh 24 ¢/kWh

JUN 2011 28 ¢/kWh 29 ¢/kWh 24 ¢/kWh

MAY 2011 26 ¢/kWh 27 ¢/kWh 23 ¢/kWh

A review of the advertised rates establish -at a minimum- that the rate deferential

between tree different types of identical commodity purchasers. Providing

industrial rates, beneficial rate over residential rates, over commercial rates, for

the same like product delivery in commerce of kilowatt hour of electricity7 “in

commerce”, that is, that either, that there has been discrimination in price between

different purchasers of products of like grade and quality electricity, and that

effect of discrimination has substantially lessen compensation and tend to create

monopoly over the sale of electricity.

7 http://www.prepa.com/spanish.asp?url=http://www.aeepr.com/CALENDARIO.ASP

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 22 of 36

Page 23: Demanda Federal Ajuste Combustible AEE

23

40. The defendants provide beneficial rates to religious groups; socially economic

rates for public housing and government rates are not posted but are maintained

by the monopoly. The last rates for these tariff were made effective the year 2000.

41. The defendants violate the Robinson-Patman Act by -inter alia- stating that since

1989 the standard rate charge is a fixed rate from which the defendant pays their

entire fix operating costs adding only the cost of fuel as the differential cost. This

is false because the audited financial statements of Earnest & Young for 2010

establish that the majority of the revenues derives from fuel adjustment charge

and the fuel adjust charged to consumers exceed the cost of fuel by an amount in

excess of 1 Billion dollars.

42. Defendant falsely advertises to its consumers that the fuel adjustment rate is a

pass-through rate8 . The fact is that the audited statements establish a gain of over

1 billion dollars over the cost of fuel in revenues (see audited statement June

2010).

43. One example of the unconstitutional predatory and capricious tariffs, restricting

trade is the special industrial tariffs given to new industry and expanding

industries. Pursuant to state law 111 of July 1986 PREPA is authorize to issue

exempt tariffs in lieu of taxes. The practice creates a restriction on trade and a

financial burden upon the plaintiff and all consumers of like commodities and

electricity who must bear the burden and costs of the fuel adjustment charge to

finance the exemptions and taxes for the new or expanding industries. The

establishment of exemptions in lieu of taxes is equally an unconstitutional

8 Ajuste por Compra de Combustible: A través de este cargo la Autoridad recupera el gasto efectuado para lacompra y manejo del combustible consumido en las unidades generatrices de la Autoridad. Este es el renglónde la factura que más varía debido a las fluctuaciones del costo del petróleo en el mercado.

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 23 of 36

Page 24: Demanda Federal Ajuste Combustible AEE

24

violation of the equal protection under the law and an unconstitutional delegation

of taxing authority by the state legislature to the public utility.

THE CLASS MEMBERS

44. The first class members are all individual members like plaintiff DUAMEL

SANTIAGO-RAMOS who have been charge a fuel adjustment charge that

includes subsides, finance, and other benefits to religious, welfare groups,

indigent or political subdivision provided economic benefits to these groups and

requiring association, and these groups in violation of the U.S. Constitution.

45. Second class members are all who have receive in commerce the commodity of

electric service at discriminatory rates over those with beneficial rates in violation

of Robinson-Patman Act codified as 15 U.S.C. §13. These include residential

consumers that pay over special residential consumers, commercial consumers

and industrial consumers that pay in excess of government, and public housing

rates.

46. Subclass members are those who were charge commercial rates in excess of the

best rate provided to residential consumers and those charged to public housing

and other governmental agencies.

JURISDICTION AND VENUE

47. The court has original jurisdiction based on Federal question 28 U.S.C. § 1331;

that is the unconstitutional and discriminatory practices of PREPA in the

assessment of the fuel adjustment charge. The court has further jurisdiction

pursuant to 15 U.S.C. § 13 and 28 U.S.C. § 2201.

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 24 of 36

Page 25: Demanda Federal Ajuste Combustible AEE

25

48. Venue lies in this district, as the facts and occurrences took place in the District of

Puerto Rico; All acts events occurred in the Commonwealth of Puerto Rico.

I. Numerosity and Definition of the Class

49. Plaintiff Duamel Santiago-Ramos Individually brings this class action in behalf of

himself and the following classes:9 Class “a”: All individuals who have been

billed a fuel adjustment charge by defendant in the Commonwealth of Puerto Rico

The Class consists of over 1,000,000 individual consumers who have been forced

to pay a fuel adjustment charge that include charges for subsidies, and

associations with churches, and other charitable entities, political and municipal

subdivisions of the state. The exact number being unknown and unascertainable;

therefore, the Class is so numerous that joinder of all members is impracticable;

Class “b” all consumers of electricity who have purchased electricity in

commerce paying higher tariffs than those provided to agricultural consumers, or

a the best commercial rate as determined by the proof or the jury.

II. Commonality

50. This cause of action is predicated on violations of U.S. Constitution, equal

protection clauses, the takings clause, and the right of free association and the

rights protected under Robinson-Patman Act 15m U.S.C. § 13. At all times

material hereto the plaintiff petitioners allege and reaffirm that they are members

of a class of persons that have been subject to violations of the U.S. Constitution

and violation of the Robinson-Patman Act 15 U.S.C § 13, and have been injured

in business and property as a result of defendants’ discriminatory electric service

fuel adjustment charge and tariffs in Puerto Rico.

9 The class definition may be modified by the Court based on discovery or other factors that can surfacethroughout the course of the litigation.

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 25 of 36

Page 26: Demanda Federal Ajuste Combustible AEE

26

III. Typicality

51. The claims of the Plaintiffs are typical of the claims of the Class members they

represent as they seek essentially the same relief, namely damages in business and

property resulting from the defendants’ fuel adjustment charge and discriminatory

tariffs that include subsidies to political subdivisions, churches, charitable

institutions, and welfare subsidies to public housing, services and tourism in

Puerto Rico, and consumers who have been charge discriminatory tariff by

defendant in violation of the Robinson-Patman Act.

IV. Adequacy of Representation

52. Plaintiff Duamel Santiago-Ramos, Individually is a plaintiff representative of

citizen and consumers that have been injured in business and property as a result

of the violation capricious, arbitrarily, unconstitutional assessment of charges to

support political affiliations, subsidies to churches, other charitable entities,

political and municipal subdivisions of the defendants, who have been charge

discriminatory tariffs by defendant in violation of the Robinson-Patman Act.

V. Plaintiffs Meet the Requirements of Rule 23(b)(1)(A)

53. This action is maintainable under Rule 23(b)(1)(A), Fed.R.Civ.P., because the

prosecution of separate actions by individual members of the Class would create a

risk of inconsistent or varying adjudications with respect to individual members

of the Class which would establish incompatible standards of conduct for

Defendants.

VI. Plaintiffs Meet the Requirements of Rule 23(b)(3)

54. Certification is also appropriate under Rule 23(b)(3), Fed.R.Civ.P., because:

A. Common issues predominate where the exact same issues will applyuniformly to each class member seeking injunctive relief; and

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 26 of 36

Page 27: Demanda Federal Ajuste Combustible AEE

27

B. A class action is superior because individual class members have nopractical interest or ability to bring this action for damages.

In particular, there are numerous questions of law and/or fact that are

common to the claims of the Plaintiffs and the members of the Class.

Among these common questions of law and/or fact are the following:

A. whether the class members have no adequate remedy at law;

B. whether class members are subject to injury constitutional injuryby the fuel adjustment charge that includes subsidies to politicalsubdivisions, churches, charitable institutions, and welfaresubsidies to public housing, services and tourism in Puerto Rico,and whether the members of the class have been injured by theviolations of the Robinson-Patman Act differential rate charges,.

C. whether injunctive relief is appropriate and in the public interest;

D. whether equity supports the relief requested in the instant issues.

The class action is the superior method of adjudication of this controversy

as joinder is impracticable and the case is manageable and can be tried

with class wide proof for all members of the Class.

Certification is also appropriate under Rule 23(b)(3), Fed.R.Civ.P., because:

C. Common issues predominate where the exact same issues will applyuniformly to each class member seeking injunctive relief; and

D. A class action is superior because individual class members have nopractical interest or ability to bring this action for damages.

The class action is the superior method of adjudication of this controversy

FIRST CAUSE OF ACTIONViolation of the free association clause

55. Plaintiff avers and re-avers all preceding paragraphs, and further states:

56. Freedom of Association is defined as the right of people to meet together to

further their common goals. The fuel adjustment charge that inflicts a force

association with political and municipal subdivisions of the state, along with the

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 27 of 36

Page 28: Demanda Federal Ajuste Combustible AEE

28

association of churches, welfare groups is unconstitutional because it forces the

plaintiff to associate by paying for a subsidy to political and municipal

subdivisions of the state, along with the association of churches, welfare groups.

57. The forced associations to finance groups which are opposed to the individualconsumer are a violation of the freedom of association of each individualconsumer. In particular forcing the payment of subsidies to groups would forcethe individual consumer to repudiate its own belief system of free enterprisesystem and that each citizen should pay for every service that the governmentprovides.

SECOND CAUSE OF ACTIONEstablishment Clause

58. Plaintiff avers and re-avers all preceding paragraphs, and further states:

59. The Establishment Clause states that Congress shall make no law "respecting an

establishment of religion." The clause is generally interpreted to mean three

things. 1) That the government may not establish an official religion or

denomination and require people to support it or believe in it. 2) The government

may not favor in its laws one religion or denomination over another and 3)

Government may not favor or disfavor believers or unbelievers in any religion or

denomination over any other. By establishing a fuel adjustment charge the

includes subsidies to churches and other charitable organizations the Government

(PREPA) endorses and requires plaintiff to support a form of religion and to

finance and pay for cost to provide the benefit to these religious and charitable

organizations.

THIRD CAUSE OF ACTIONTakings clause

60. Plaintiff avers and re-avers all preceding paragraphs, and further states:

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 28 of 36

Page 29: Demanda Federal Ajuste Combustible AEE

29

61. The Fifth Amendment prohibits "private property [from being] taken for public

use without just compensation." The application of the fuel adjustment charge by

the state own PREPA constitutes a taking from an individual consumer[s] who is

[are] not interested in supporting subsidies to political associations, government

agencies, or religious entities who receive a subsidy paid by the individual

consumer’s rate and fuel adjustment charge. The taking of the individual

consumer’s money is a taking of property without just compensation.

FOURTH CAUSE OF ACTIONViolation of due process of law

62. Plaintiff avers and re-avers all preceding paragraphs, and further states:

63. The fuel adjustments charge or rate is determined unilaterally by individual

government agents who are interested in remaining as government employees

while working for PREPA. These government agents formulate a rate based on

the need of the agency to provide for subsidies to churches, political subdivisions,

municipalities, welfare recipients, and other governmental needs. As a

Governmental political subdivision there is no public hearing, or input to evaluate

the fairness of constitutionality of the fuel adjustment charge. The public agency

is not vested with the taxing power of the state and by implication of the fuel

adjustment charge, the agency of the state is taxing the individual consumers with

payment of subsidies to political subdivisions of the state, predicated on the cost

of fuel adjustment when in fact and in truth the needs of taxing by the state are

open for public hearings and scrutiny. The subsidies which a government must

provide are not part of the organic law which created the public agency of the

state. These entities, churches, political subdivisions of the state, municipalities

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 29 of 36

Page 30: Demanda Federal Ajuste Combustible AEE

30

already have stabled an assigned budget approved by legislature, and included in

the governmental budget of the state.

FIFTH CAUSE OF ACTIONEqual protection clause

64. Plaintiff avers and re-avers all preceding paragraphs, and further states:

65. The Equal Protection Clause of the 14th amendment of the U.S. Constitution

prohibits states from denying any person within its jurisdiction the equal

protection of the laws. See U.S. Const. amend. XIV. Defendant PREPA has failed

to protect Plaintiff[s] under the equal protection under the law by implemental a

fuel adjustment charge that is unconstitutional because it forces religious and

political associations, and takes property of plaintiff to finance and pay for

political associations and subdivision of the state that do not pay for electric

service. Similarly, the fuel adjustment charge is made by government workers that

implement the fuel adjustment charge without regard to rights of the plaintiff[s]

under the U.S Constitution and opportunity for a hearing and due process of law.

SIX CAUSE OF ACTIONViolation of the Robinson-Patman Act

66. Plaintiff avers and re-avers all preceding paragraphs and further states and prays:

67. Pursuant to 156 U.S.C. § 3 (a) Price; selection of customers makes it unlawful for

any person entity engaged in commerce, in the course of such commerce, either

directly or indirectly, to discriminate in price between different purchasers of

commodities of like grade and quality [electricity], where either or any of the

purchases involved in such discrimination are in commerce, where such

commodities are sold for use, consumption, or resale within the United States or

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 30 of 36

Page 31: Demanda Federal Ajuste Combustible AEE

31

any Territory thereof or the District of Columbia or any insular possession or

other place under the jurisdiction of the United States, and where the effect of

such discrimination may be substantially to lessen competition or tend to create a

monopoly in any line of commerce, or to injure, destroy, or prevent competition

with any person who either grants or knowingly receives the benefit of such

discrimination. The Robinson-Patman Act is concerned not with efficiency but

with the equitable dispersion of business power within a market like Puerto Rico.

Section 2(a) of the Robinson-Patman Act condemns “price discrimination”-two

sales of identical goods with equal marginal costs made at two different prices.

68. The Robinson-Patman Act makes it unlawful for any person engaged in

commerce to pay or contract for the payment of anything of value to or for the

benefit of a customer of such person in the course of such commerce as

compensation or in consideration for any services or facilities furnished by or

through such customer in connection with the processing, handling, sale, or

offering for sale of any products or commodities manufactured, sold, or offered

for sale by such person, unless such payment or consideration is available on

proportionally equal terms to all other customers competing in the distribution of

such products or commodities.

69. Defendants have violated, are violating, and continue to violate the Robinson-

Patman Act by their implementation of different rates for social, economic and

political groups setting different tariffs, rates based on social economic and

political views of the defendant[s]. It shall be unlawful for any person engaged in

commerce to pay or contract for the payment of anything of value to or for the

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 31 of 36

Page 32: Demanda Federal Ajuste Combustible AEE

32

benefit of a customer of such person in the course of such commerce as

compensation or in consideration for any services or facilities furnished by or

through such customer in connection with the processing, handling, sale, or

offering for sale of any products or commodities manufactured, sold, or offered

for sale by such person, unless such payment or consideration is available on

proportionally equal terms to all other customers competing in the distribution of

such products or commodities.

70. One example of the unconstitutional predatory and capricious tariffs, restricting

trade is the special industrial tariffs given to new industry and expanding

industries. Pursuant to law 111 of July 1986 PREPA is authorize to issue exempt

tariffs in lieu of taxes. The practice creates a restriction on trade and a financial

burden upon the plaintiff and all consumers of like electricity who must bear the

burden and costs of the fuel adjustment charge to finance the exemptions and

taxes for the new or expanding industries. The establishment of exemptions in

lieu of taxes is equally an unconstitutional violation of the equal protection under

the law and an unconstitutional delegation of taxing authority by the state

legislature to the public utility.

SEVEN CAUSE OF ACTIONDECLARATORY JUDGMENT

71. Plaintiffs aver and re-aver all preceding paragraphs and further state:

72. Pursuant to 28 U.S.C. § 2201 the court is empower to upon the filing of an

appropriate pleading, declare the rights and other legal relations of any interested

party seeking such declaration, whether or not further relief is or could be sought.

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 32 of 36

Page 33: Demanda Federal Ajuste Combustible AEE

33

Any such declaration shall have the force and effect of a final judgment or decree

and shall be reviewable as such.

73. Plaintiff Caribbean Economic Council respectfully prays to this court to declare

the subsidies and predatory tariffs of defendant PREPA unconstitutional and

against the Public Policy of the United Sates under the Robinson-Patman Act 15

U.S.C. § 15. Declaring that the payment of 11% of contributions in lieu of taxes

[as well as the payments in 2007 $ 192,591; 2008 $218,379; 2009 $224,792; and

2010 $232,431] from the operation revenues or profits of PREPA to the Central

Government an illegal act as a restriction in trade, free market process in

determining price, quantity output, quality, or other important terms of

transaction. The United States Supreme Court has articulated classic economic

price theory to be the touchtone, the standard for all antitrust analysis which

defendants have ignored and continue to ignore. The payments to the Central

Government are a further form of illegal unlegislated taxation which the

consumer of electric power must assume in the fuel adjustment charge which

bears no economic relation to economic price theory.

EIGHT CAUSE OF ACTIONViolation of the equal Protection Clause

Under 42 U.S.C. § 1983

74. Plaintiff[s] aver and reaver all preceding paragraphs and further state:

75. This is an action against defendant Marimar Pérez-Riera, Chairperson, Board of

Directors individually, defendant serves President of the Board of Directors, she

is a natural person that manages and controls the Board of Director and is vested

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 33 of 36

Page 34: Demanda Federal Ajuste Combustible AEE

34

with the establishment and approval of discriminatory prices and tariffs for the

commodity in commerce of electricity and fuel adjustment charges.

76. Pursuant to 42 U.S.C. § 1983 every person who, under color of any statute,

ordinance, regulation, custom, or usage, of any State or Territory or the District of

Columbia, subjects, or causes to be subjected, any citizen of the United States or

other person within the jurisdiction thereof to the deprivation of any rights,

privileges, or immunities secured by the Constitution and laws, shall be liable to

the party injured in an action at law, suit in equity, or other proper proceeding for

redress. Here, defendant has failed to protect plaintiff under the U.S. Constitution

as described under causes of action 1-6 and Eight, Robinson-Patman Act and has

failed to protect plaintiff and class members under the Equal Protection Clause of

the Federal Constitution to wit the 14th Amendment as against different type of

treatment for overcharges, beneficial tariff rates, to certain welfare recipients,

religious groups, public housing residents, political subdivisions of the State that

consume the same like commodity (electricity) as individual Plaintiff and are

receiving beneficial treatment over Plaintiff by -inter alias- receiving subsidies,

financing, and other benefits which are not offered to Plaintiff and the class of

individual consumer.

WHEREFORE, the Plaintiff[s], on behalf of himself [themselves] and the Class,

demand the following relief:

A. Recover the damages sustained by the individual plaintiffs by payment of feesthat support political, religious and other governmental association costs, and thecost of suit, including a reasonable attorney's fee

B. After notice and hearing, an Order certifying the Class and any appropriateSubclasses to administer the claims.

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 34 of 36

Page 35: Demanda Federal Ajuste Combustible AEE

35

C. An Order appointing Lorenzo Palomares P.S.C., as Counsel for the Class andawarding attorney’s fees, pursuant to Federal Law and the rules governing classactions, for the benefit of the Class for said representation;

D. Establishing a fund to provide relief for the injury to the class;

E. An Order requiring the Agency and its chief/director to cease and desist from

further discriminatory and unconstitutional practices.

F. An injunction requiring defendant PREPA to stop providing preferential treatment

to political subdivisions, agencies of the state, churches and welfare recipients and

otherwise providing price discounts and other forms of preferential treatment to

some buyers of like kind electricity and not to others.

G. Any and all further relief this Board/Court deems just and proper.

Respectfully submitted,October 6, 2011

S./ Ramon Rivera Iturbe, Esq.Ramon Rivera Iturbe, Esq.Rivera Iturbe & Assoiates

USDC #120156500 Ave Muñoz Rivera,

Centro IISan Juan PR 00918

Tel. 787- 754-7248

S/. Lorenzo J. Palomares Starbuck, Esq.Lorenzo J. Palomares, Esq.

U.S.D.C. #218017Lorenzo Palomares, P.S.C.

Attorneys & Counselors at Law421 Ave Munoz Rivera, Midtown Bld.

Penthouse Suite 1001,San Juan, P.R. 00918

Tel (787) 753-7441Fax (787) 622-2540

[email protected]

S./ Ricardo Izurieta, Esq.Ricardo IzurietaUSDC#124205

421 ave Muñoz Rivera, suite 1002San Juan PR 00918Tel. 787-531-9418

izurieta.ricardo @gmail.com

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 35 of 36

Page 36: Demanda Federal Ajuste Combustible AEE

36

NOTICE OF REPRESETATION

I hereby appoint the law offices of Lorenzo Palomares to represent the undersigned

plaintiff as class representative. I hereby agree to zealously represent the class of plaintiff that

has been injured by the defendants in the complaint at large.

S,/ Daumel Santiago RamosDUAMEL SANTIAGO-RAMOS

Case 3:11-cv-01987-JAF Document 1 Filed 10/06/11 Page 36 of 36