July 27, 2012

Coakley Seeks $16 Million In Fines From National Grid

The attorney general's office has hit utility provider National Grid with a $16 million fine for the way it allegedly handled Tropical Storm Irene and last October's snowstorm.

Attorney General Martha Coakley's office filed a brief with the Department of Public Utilities on Wednesday, making the recommendation. The DPU would impose the fine, which is the largest penalty recommended against a utility company in Massachusetts.

According to Coakley's brief, National Grid violated storm response obligations under the company's emergency response plan.

"Combined, these two storms left nearly a million National Grid customers without power, some for more than a week," Coakley said in a statement."National Grid's preparation for these storms was inadequate and its response was unacceptable.The company compounded these mistakes with a lack of communication to municipalities and first responders about restoration efforts, leaving many of them in the dark as they were making critical decisions around public safety and emergency treatment."

National Grid spokeswoman Deborah Drew said the company will file a formal response with the DPU Aug. 1 and will wait to see what the DPU's response to Coakley is.

"While we acknowledge that our storm restoration efforts did not meet our customers' expectations, and there is room for improvement, we strongly disagree with the extreme conclusions the attorney general has drawn," Drew said in a statement. "We will address those issues in our Aug. 1 response to the DPU."

If granted, the penalties can't be passed on to National Grid customers and would have to be borne by shareholders. Money would be paid to the commonwealth's general fund; however, Coakley has announced her support for pending legislation that would make sure that penalties ordered by the DPU go to customers instead.

According to the AG's brief, National Grid did not respond to emergency calls about downed wires within a reasonable amount of time, partly due to inadequate staffing levels. Company officials testified that they do not use computer models or tables to predict a storm's severity and instead rely on the experience of top-level officials.

Coakley's office also said that during Tropical Storm Irene, in late August 2011, electric distribution companies along the East Coast requested an additional 7,000 personnel, but National Grid received only 24 as other utility companies had already contracted the available extra workers from mutual assistance and other resources. The AG's brief alleges that if National Grid had used more scientific methods of predicting storms than merely relying on personal experience, it may have gained a greater level of assistance, responding more quickly to the 13,000 downed wires during Irene, and 22,000 downed wires during the October snowstorm.

Several communities reported that National Grid didn't maintain communication with municipal officials and emergency management offices. According to the brief, there was such a lack of staffing and communication that towns were forced to leave firefighters at downed wires to ensure public safety.

Coakley is recommending to the DPU that National Grid be fined $4.6 million in response to Tropical Storm Irene and $11.7 million for the snowstorm.

Recommendations to the DPU for similar fines against NStar will be filed Aug. 7.

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