State Fines Utilities Millions for 2011 Storm Responses

National Grid was fined nearly $19 million, the highest fine levied against utilities in Massachusetts.

The state on Tuesday ordered a total of $24.8 million in penalties to utility companies for their response to storms in 2011.

Massachusetts Energy and Environmental Affairs Secretary Rick Sullivan joined Department of Public Utilities (DPU) Chairman Ann Berwick and DPU commissioners today to announce the findings of the DPU’s investigation into responses to Tropical Storm Irene and the October 2011 snowstorm.

Provided the penalties hold up, customers should see a reduction in their bill, though it is unclear how much, officials said. 

National Grid faces the steepest penalty, at $18.725 million. NSTAR has been ordered to pay $4.075 million, while the Western Massachusetts Electric Company faces a $2 million penalty.

National Grid told the Boston Globe they have not decided whether to appeal the fine. NStar has announced it plans to appeal.

Extended outages throughout service areas in the 2011 storms led to the investigation.

Recognizing that outages are inevitable in storms of this magnitude, the DPU concluded that all of the utilities failed in their public safety obligation to respond to local public safety officials regarding downed wires. 

“As the number of serious weather events has risen dramatically in Massachusetts, it’s crucial for ratepayers to have electric service that is both safe and reliable,” Sullivan said in a press release. “I am grateful to the Department of Public Utilities for its thorough investigation into these storm responses and we are hopeful that its findings, penalties, and directives will ensure improved preparedness and services during weather events in the future.”

In the case of National Grid, the DPU found systematic failures in the company’s preparation for and response to both storms and ordered that National Grid undergo a comprehensive, third-party management audit of its capacity for responding to emergency events.  

Like the other companies, National Grid failed to effectively coordinate with the towns affected by the storms. Additionally, it left local public safety officials standing by downed wires for as long as several days, had a seriously inadequate response for priority facilities like nursing homes and sewage treatment plants, and secured too few crews, too late. The DPU also noted it had warned and penalized National Grid for similar behaviors in the December 2010 snowstorm.

DPU Chairman Ann Berwick said the state "will not tolerate inadequate responses to local public safety officials."

"Additionally, in this day and age, we expect competent communications with towns and customers alike,” she said.

The three utilities are required to submit their plans for penalty payment to the state within 30 days.

Jim O'Connor December 11, 2012 at 10:05 PM
Finally. Maybe now these monopolies will start to place a higher priority on meeting their service obligations to their customers and the public over payment of dividends and executive compensation.
Live and In Color December 11, 2012 at 11:02 PM
Not that I know, but if the state doesn't fund National Grid, how can you fine them for their service, I'm not sure how that works if it's a completely private company.
Mary MacDonald December 11, 2012 at 11:14 PM
The DPU is a regulatory agency. It has some authority over private companies, including water companies. The same agency is required to approve any water rate increase, such as in Milford, where the utility is a private company.


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