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Massachusetts Utilities Hit With $25M in Penalties

December 12, 2012

By Bill Kirk, The Eagle-Tribune, North Andover, Mass.

Dec. 12--BOSTON -- Customers of National Grid, NStar and Western Mass. Electric are in line to receive nearly $25 million in reimbursements for poor performance during two storms in 2011.

Energy and Environmental Affairs Secretary Rick Sullivan yesterday joined Department of Public Utilities Chairwoman Ann Berwick and DPU Commissioners to announce the findings of DPU's investigation into the electric utilities' responses to Tropical Storm Irene and the Halloween snowstorm of 2011.

National Grid, which serves most of the Merrimack Valley, faces the steepest penalty, at $18.725 million; NSTAR has been ordered to pay $4.075 million; and Western Massachusetts Electric Companyto pay $2 million. The DPU concluded that all of the utilities failed in their public safety obligation when it came to responding 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. "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."

National Grid, in an emailed statement, said: "We understand customers were frustrated by the outages resulting from the devastating storms in 2011 and we share that frustration. We have implemented many changes to our emergency planning and put these into practice during Hurricane Sandy and the November nor'easter. We welcome the opportunity to review our emergency response procedures to continuously improve our service to customers during emergency events and will work closely with the DPU auditors in that review process."

The companies have 30 days to respond to the state order. NStar and Western Mass Electric are said to be considering an appeal of the order. Under a state law passed this year, the fines will be returned to consumers in the form of rate relief if the DPU decision is upheld.

Gov. Deval Patrick applauded the decision.

"Regulated utilities must be accountable to the residents they serve," he said. "After conducting a thorough investigation, the Department of Public Utilities has done just that. I trust this will encourage the utilities to refocus their efforts on preparation for and response to weather events in the future."

During Superstorm Sandy, response from utilities was considerably better than during the 2011 storms, according to a spokeswoman for the Sullivan's office.

During both Irene and the nor'easter, homeowners and businesses were left powerless for days. During the Halloween storm, the Merrimack Valley was among the hardest hit areas of the state, with huge trees down across utility wires, blocking streets and driveways, for days before utility crews ever showed up.

Following both storms, the DPU vowed a full and comprehensive review of the utilities' response tot he storm.

DPU officials concluded that "all of the utilities failed in their public safety obligation when it came to responding to local public safety officials regarding downed wires."

The DPU found "systematic failures" in National Grid's preparations for the storms and the company's response to the storms and ordered a third party audit of National Grid's capacity to respond to emergencies.

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 observed that it had warned and penalized National Grid for similar behaviors in the December 2010 snowstorm.


(c)2012 The Eagle-Tribune (North Andover, Mass.)

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