For Immediate Release - January 13, 2012

AG Coakley: Utility Customers Should be Compensated for Inadequate Storm Responses

Working With Legislature To Ensure That All Storm Response Penalties Paid By Utilities Be Credited Directly To Customers

BOSTON - In the wake of major storms last year that left thousands of Massachusetts customers without power for days, Attorney General Martha Coakley is working with the legislature to implement changes to the law that would direct all penalties paid by utilities directly back to impacted customers through rate credits. 

In a letter to the Joint Committee on Telecommunications, Utilities & Energy pdf format of letter to the Joint Committee on Telecommunication
, issued Wednesday, AG Coakley expressed support for a bill filed by Senate Chairman Benjamin Downing (D-Pittsfield) that would require utility companies to implement additional storm-related communications and plan details, and requested that the bill include the AG’s proposed penalty changes.

“We believe that customers harmed by inadequate emergency storm response should be directly compensated through rate reductions,” said AG Coakley.  “These updates to the law would greatly assist our Office's continuing efforts to protect ratepayers by holding utilities accountable for utility safety and reliability at reasonable costs for ratepayers. We are working with Chairmen Downing and Keenan on these issues and appreciate their cooperative efforts in working to support customers.”

“I welcome AG Coakley’s interest in improving our storm response process and look forward to reviewing her suggestions with the rest of the Committee,” said State Senator Benjamin B. Downing (D- Pittsfield).  “Legislation improving storm response continues to be a priority, and I anticipate a robust debate on this important consumer protection initiative with my colleagues this session.”

Senate Bill 2087, An Act Relative to Emergency Response of Public Utility Companies, would amend existing laws, adding specific requirements to ensure the prompt restoration of service, provide management contacts to municipalities and a communications infrastructure for consumers.  In her letter, AG Coakley called these updates “common sense changes” while requesting that the bill also eliminate the existing cap on penalties and allow those penalties to be returned to affected customers through a rate credit. 

As ratepayer advocate, Attorney General Martha Coakley has the authority to request a formal investigation by the DPU into the utilities’ storm response.  In July, 2011, AG Coakley reached an agreement requiring National Grid to pay $2.2 million in penalties, service improvements and other conditions in connection with its inadequate response to the December 26, 2010 winter storm. A formal investigation is already underway into the preparedness and response in connection with Tropical Storm Irene and the 2011 October snow storm.

The AG’s Office has become increasingly concerned that, despite changes in the law meant to enhance storm response, the response plans themselves and the utility response may still be inadequate. The AG’s Office is reviewing this issue more thoroughly in the current DPU investigations and expects to provide more information as the regulatory process continues.