Big Fines for Utilities’ Storm Response

Thursday, December 13, 2012 @ 07:12 PM gHale


Utility regulators in Massachusetts are hitting three power companies with penalties totaling nearly $25 million for their poor handling of widespread outages caused by two major storms last year.

The fines against National Grid, NStar and Western Massachusetts Electric Co. came into play after a lengthy investigation by the state into how the utilities planned for and responded to Tropical Storm Irene and a surprise October snowstorm. Hundreds of thousands of customers lost electricity and quite a few waited longer than a week for the lights to come back on after each storm.

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The biggest penalty went against National Grid, which regulators hit with a fine of $8.2 million for Irene and more than $10.5 million for the snowstorm, totaling $18.7 million.

The company suffered “systematic and fundamental failures in how the company planned for and responded to both storms,” said Ann Berwick, chairwoman of the Department of Public Utilities.

The investigation revealed inadequate planning for the storms, as well as failures in responding to public safety threats posed by toppled electrical wires, she said. National Grid also suffered from lapses in communication with its customers and municipal officials after the storms, and for not prioritizing facilities such as nursing homes while restoring power.

National Grid said it was reviewing the decision and evaluating its options. The company can appeal to the state’s highest court.

“We understand customers were frustrated by the outages resulting from the devastating storms in 2011 and we share that frustration,” the company said, adding it implemented many changes in emergency planning put in practice during the more recent Superstorm Sandy.

Both NStar and Western Massachusetts Electric (WMECO), both divisions of Hartford, CT-based Northeast Utilities, said they would appeal the penalties.

NStar was hit with a $4.1 million fine — $2.2 million for Irene and $1.9 million for the snowstorm. WMECO ended up fined $2 million just for its response to the snowstorm.

Regulators said while both companies met most standards for response, neither did an adequate job of clearing downed wires that posed a major safety hazard for police and firefighters along with the general public.

“We strongly disagree with the department and are disappointed that they dismissed the tireless effort put forth by our employees to respond to customers after these historic storms,” said Werner Schweiger, NStar’s president.

Irene alone damaged 80 percent of the NStar’s overhead circuits, Schweiger said, forcing the utility to essentially rebuild its power grid even as it was trying to restore electricity.

Peter Clarke, president of WMECO, said his company also strongly disagreed with the findings, saying it responded to the emergencies in a “safe, responsible and methodical way under extremely difficult conditions.”

Attorney General Martha Coakley said the penalties, while smaller than the combined $30 million she had sought against the companies, sent a “clear signal” that utilities would be held accountable for failures in preparing for and responding to major outages.



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