For Immediate Release - July 11, 2012

After Multiple and Serial Power Outages AG Coakley Launches Review to Propose New Utility Service Quality Standards

BOSTON – In light of the recent massive power outages that left thousands without electricity across the state, Attorney General Martha Coakley has begun a review of standards used to measure the overall service quality of utility companies to determine if they are adequate or effective.

Currently, utility companies are evaluated yearly by a set of service quality standards under the Department of Public Utilities (DPU). Those standards are designed to make sure utilities maintain an acceptable level of preparedness for storms, infrastructure levels, and responsiveness to customers. Utilities also receive incentive payments for meeting those standards.

Currently, utilities can improve their overall scores by focusing on metrics unrelated to system reliability, such as reducing the number of rings before customer calls are answered or by speeding up the resolution of customer complaints.  Performance improvements in such areas can mask weaknesses in actual system maintenance.

“The frequency and extent of the recent power outages have been unacceptable,” AG Coakley said. “While utilities routinely request and receive rate increases to improve their infrastructure and overall service quality, it’s time to make sure ratepayers are getting the benefits they’re paying for.”

The AG Office’s review will assess whether the service quality data currently required to be reported by utilities provides adequate information to state regulators.  It will also focus on retooling the current metrics used to grade utilities on their performance.

In recent years, utility companies have been requesting, and receiving, significant rate increases and accelerated rate recovery mechanisms in order to pay for infrastructure upgrades made to their distribution systems. At the same time, the current service quality rules have not been strengthened to require more reliable service. AG Coakley believes that the current standards are deficient because despite the incidence of major outages some utilities are eligible for incentive payments under the current rules.

The goal of the AG’s review is to study alternative ways to measure service quality so that utilities can be required to improve the maintenance of their distribution systems and increase the quality of service actually delivered. Improved distribution system maintenance can prevent or reduce the duration of outages, even during major storms or other unexpected events.

At the end of the review, the AG’s Office will provide official recommendations to the Department of Public Utilities (DPU). Over the last few weeks, attorneys from the AG’s Office of Ratepayer Advocacy have represented ratepayers at hearings to gather information regarding utility companies’ response to the October 2011 snowstorm and Hurricane Irene, both of which left thousands of customers without electricity.  The hearings are part of DPU’s investigation into the response to the storms by utility companies including NStar and National Grid.

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