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Pa. Sets Policy on Liability Waivers

Fortnightly Magazine - June 1 1997

The Pennsylvania Public Utility Commission has issued a set of guidelines for the development of "enforceable" tariffs that seek to limit a utility's liability to consumers for damages associated with the provision of utility services.

It directed the state's utilities to make sure that tariffs waiving liability are consistent with six principles:

1) Events covered lie within the commission's expertise and are subject to its ratemaking authority.

2) Limitations on liability may apply in case of interrupted service or property damage only and not personal injury.

3) Limitations may cover liability for loss of service or property damage through an "act of God," where utility action or inaction played no part in the harm.

4) Waivers are allowed for conduct that could be found negligent under tort law, but not for reckless, willful or other more serious actions.

5) Large utilities (intrastate annual operating revenues greater than $40 million) may not limit liability for negligence for amounts less than $25,000.

6) Small utilities may not limit liability for negligence for amounts less than $500.

7) Liability may be limited for damages associated with reasonable service, but not totally exculpated.

The PUC explained waivers of liability generally run against public policy, but that state law gave it authority to approve tariffs with such waivers in certain "narrowly defined" circumstances. Re Tariff Provisions that Limit the Liability of Utilities for Injury or Damage as a Result of Negligence of Intentional Torts, M-00960882, March 17, 1997 (Pa.P.U.C.). t

Phillip S. Cross is an associate legal editor of PUBLIC UTILITIES FORTNIGHTLY.

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