For Immediate Release - December 08, 2006

DTE Fines KeySpan $250,000 for LNG Security Breach

DTE Fines KeySpan $250,000 for LNG Security Breach

The Department of Telecommunications & Energy (DTE) today issued a Notice of Probable Violation (NOPV) to KeySpan, the operator of the Lynn LNG plant where a security breach occurred last August. The NOPV details several violations of safety regulations that the DTE alleges to have occurred at the Lynn plant.

The DTE's investigation concluded that these security lapses allowed the break-in to go undetected for five days. The NOPV includes proposed remedial actions to be undertaken by KeySpan to prevent a similar event in the future. The NOPV orders KeySpan to pay a civil penalty of $250,000 for these violations. It is important to note that the cost of the fine cannot be passed on to ratepayers.

In setting the amount of the fine, the DTE considered the gravity of the security breach, KeySpan's culpability, and remedial actions already undertaken by KeySpan after the incident. Under state regulations, KeySpan has 30 days to respond to the allegations by either signing a consent agreement and paying the fine or requesting a hearing before the DTE.

"Public safety is government's first priority and one of its most important functions," said Office of Consumer Affairs and Business Regulation Director Janice S. Tatarka, whose office oversees the DTE. "The LNG plants in Massachusetts are an important and vital part of the state's gas supply system. They must have in place rigorous security practices and procedures to safeguard their facilities against intruders so that they can continue to function safely with uninterrupted service to their customers. The security personnel and equipment at these plants not only protect the facility, but protect the public as well."

After the break-in at KeySpan's Lynn LNG plant last summer, the DTE undertook a comprehensive review of the security at all LNG plants across the state. The Massachusetts State Police Commonwealth Fusion Center Critical Infrastructure Assessment Unit provided valuable assistance and expertise as part of this review. The results were detailed in a joint report to Governor Mitt Romney in September. The inspectors found Massachusetts' LNG facilities to be in substantial compliance with state and federal safety and security regulations.

"The DTE will continue its mission to vigorously fulfill its oversight and enforcement role to ensure that the Commonwealth has a safe and reliable gas distribution system," added Tatarka.