For Immediate Release - June 29, 2009

Attorney General Martha Coakley Applauds Department of Public Utilities for Upholding $8 Million Fine Against National Grid

BOSTON - Attorney General Martha Coakley praised the Massachusetts Department of Public Utilities (DPU) for upholding an approximately $8 million fine against National Grid for the company's failure to meet service quality standards in 2006. On Friday, the DPU issued a ruling refusing National Grid's request to exclude four storms from the calculation of service quality penalties in 2006. The $8 million penalty will result in a slight decrease in rates for customers in National Grid's service territory.

"We appreciate the DPU's recognition that utility service quality is important and utilities that lose power repeatedly and fail to restore service quickly should be penalized," said Attorney General Coakley.

From 2004 through 2006, National Grid failed to meet service quality standards because of repeated outages and its failure to timely restore service. The company faced automatic penalties for its service quality failures for these years, and, under the terms of the company's service quality plan, the penalty was doubled for 2006 for failing to meet the standards for three years in a row. Arguing that four storms in 2006 that had led to outages were extraordinary, National Grid brought a petition requesting that the DPU exclude these four storms from the calculation of service quality penalties. The Attorney General's Office opposed the exclusion of the storms arguing that they were not extraordinary or excluded under the guidelines including that the Governor had not declared a state of emergency in each case. If these storms had been excluded, National Grid would have been penalized a lower amount in 2006. On Friday, the DPU found these storms were not extraordinary and therefore ruled that the storms should not be excluded from the calculation of fines in 2006. National Grid has met service quality standards since 2006.

In a separate matter, National Grid has recently asked the DPU for an approximate 18% increase in residential distribution rates (this is a total bill increase of 5.5%). The Attorney General opposes this rate increase as excessive and unwarranted. The DPU will host public hearings on the proposed rate increase next week in Nantucket, Worcester, and Andover where members of the public can testify. Following the public hearings, the DPU will host evidentiary hearings where the Attorney General and the company will present witnesses.

The Attorney General serves as the ratepayer advocate and is authorized to intervene in administrative and/or judicial proceedings on behalf of consumers in connection with any matter involving the rates, charges, prices or tariffs of any gas company doing business in the Commonwealth.

Representing the Attorney General's Office and ratepayers in this matter were Assistant Attorneys General Joseph Rogers and Tackey Chan.