For Immediate Release - December 31, 2012

AG Statement on Utility Companies' Appeals of Record Fines Against Them for Poor Storm Response

BOSTON – Massachusetts Attorney General Martha Coakley today issued the following statement regarding the decision by National Grid, NSTAR and the Western Massachusetts Electric Company (WMECO) to appeal the fines that were issued against them by the Department of Public Utilities (DPU) for their failed responses to the October 2011 snowstorm and Tropical Storm Irene.

“The inadequate planning and response by the utility companies left thousands of Massachusetts customers without power for far too long, and the record fines are certainly justified to hold them accountable for those failings. Our office intends to defend these fines in court.”

 

BACKGROUND:

An investigation by the AG’s Office determined that NSTAR and National Grid failed to adequately prepare, respond, and communicate during Tropical Storm Irene and the October 2011 snowstorms. It found similar issues in WMECO’s response to the October 2011 snowstorm. AG Coakley recommended that the DPU levy $16 million in fines against National Grid, $10 million against NSTAR, and $4 million against WMECO.

On Dec. 11, 2012, the DPU issued more than $24 million in record fines against National Grid, NSTAR and WMECO.

AG Coakley also announced in July that her office was launching a review of the standards used to measure the overall service quality of utility companies. As part of that review, the AG’s Office has been studying alternative ways to measure service quality so that utilities improve the maintenance of their distribution systems and increase the quality of service delivered to customers. Improved distribution system maintenance can prevent or reduce the duration of outages. The report by the AG’s Office was filed with the DPU on Dec. 13, 2012.

In November, AG Coakley also asked that all fines by the DPU be returned directly to customers. AG Coakley argued that the new 2012 law should apply to the 2011 storms because it went into effect in August before the DPU’s final decision on the penalties.  The law established that penalties levied against public utility companies for inadequate response shall be refunded to the Company’s customers, rather than given to the Commonwealth’s General Fund as under prior law.  AG Coakley had argued for this change as a matter of fairness for ratepayers. The DPU ultimately ordered that the fine should in fact be returned to ratepayers.

The Attorney General’s Office of Ratepayer Advocacy is by statute the utility ratepayer advocate for Massachusetts and is authorized to intervene in or institute administrative and judicial proceedings on behalf of consumers in connection with any matter involving the rates, charges, prices or tariffs of any gas or electric company doing business in the Commonwealth.

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