Federal Court Allows Due Process Claim To Proceed Against WAPA Amid Allegations of Overbilling and System Failure
In a significant legal development, U.S. District Judge Juan R. Sánchez ruled Friday that customers of the Virgin Islands Water and Power Authority may proceed with a constitutional claim alleging the utility failed to provide due process before threatening or cutting off electricity services tied to a faulty metering system.
2025-04-02 17:38:36 - VI News Staff
The decision stems from a broader case in which a group of residents and businesses claim they were overbilled due to a failed smart meter installation and left without a meaningful avenue to challenge those charges.
While Sánchez allowed the due process claim to proceed, he dismissed all other counts brought against WAPA and its private contractors, Tantalus Systems Inc. and Itron Networked Services Inc. The plaintiffs had alleged violations under the federal False Claims Act, the Virgin Islands Consumer Fraud and Deceptive Business Practices Act, and a product liability claim related to cybersecurity vulnerabilities in the electrical grid. The ruling narrows the scope of the lawsuit considerably but leaves the door open for legal scrutiny of WAPA’s internal procedures and the statutory protections afforded to customers.
At the heart of the case is WAPA’s 2014 contract with Tantalus and Itron to replace its analog meters with a digital Advanced Metering Infrastructure system. The $13 million project was financed in part by a loan from the U.S. Department of Agriculture and was promoted as a cost-saving measure that would eliminate the need for meter readers and allow customers to monitor real-time usage. But according to the plaintiff — a mix of individual residents and local businesses, including KH, RV, Gordon Ackley, Gasworks Inc., and Fruit Bowl Inc. — the AMI system never worked as promised. They allege that WAPA continues to estimate bills because the meters cannot reliably report usage, resulting in frequent overbilling.
Some of the examples cited in the complaint are stark. One plaintiff said he relied solely on a generator for an entire billing period, yet still received a high-usage bill. Another was charged thousands of dollars during a time when his family was out of town. Several plaintiffs reported receiving disconnection notices after unsuccessfully disputing charges with WAPA’s customer service. Ackley, one of the named plaintiffs, had his service temporarily shut off for nonpayment of what he claims was an incorrect bill and continues to receive disconnection warnings.