National Grid sees AG fines as 'extrem e'

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July 27, 2012

National Grid sees AG fines as 'extrem e'

From Wire and Staff Reports Gloucester Daily Times The Gloucester Daily Times Fri Jul 27, 2012, 11:06 PM EDT

Utility giant National Grid was unprepared, understaffed and unhelpful during two massive storms last year, leading state Attorney General Martha Coakley to issue a blistering assessment of the company along with a sky-high fine against the energy giant.

But while the utility company, which serves all of Cape Ann and much of Eastern Massachusetts, admitted it was ill-prepared and had other problems, company officials said Friday they thought Coakley’s assessment and fines were “extreme.”

Coakley announced that her office is seeking penalties against the company because of its inadequate response to Tropical Storm Irene last August and the surprise October snowstorm that pummeled much of the state. The AG is seeking $4.6 million for the utility’s response to Irene and $11.7 million for its response to the snowstorm, a total of more than $16 million.

The recommendations come on the heels of a monthlong investigation of National Grid’s utility standards conducted by the attorney general’s office. In response to the findings, Coakley filed her recommendation with the state’s Department of Public Utilities, which has the authority to enforce the fines.

“We believe that the performance of Grid during these two events left thousands of people in Massachusetts in the dark, literally and figuratively, for far too long,” Coakley said.

Ironically, while local officials and residents have questioned National Grid’s reaction to and handling of significant power outages at different times over the last two years — including a two-day Christmas 2010 storm and a nine-hour Gloucester outage on a calm day a little more than a week later — Cape Ann did not take significant hits from either of the storms at the center of the Attorney General’s probe. The October snowstorm, especially, delivered heavy snow to as near as Peabody, and dustings to Danvers and Beverly, but left Gloucester and Cape Ann largely unscathed and dealing only with rain while other parts of the state were socked with up to two feet of white stuff.

But the attorney general said her office will seek similar fines against NSTAR and Western Massachusetts Electric Company, public utility companies that also have been criticized for their response during the two storms that left more than 500,000 state customers without electricity.

In response to the attorney general’s recommended fines, National Grid released a statement calling them “extreme.” The company acknowledged that its response to the two storms failed customers’ expectations, saying “there is room for improvement.” But National Grid said it addressed the attorney general’s recommendations in a formal response to the public utilities department and will “continue to work to provide the level of service ... customers expect and deserve.”

The Department of Public Utilities will take Coakley’s recommendations “under serious advisement” and will act in the best interest of consumers, Rick Sullivan, the state’s Energy and Environmental Affairs Secretary, said in a prepared statement .

According to Coakley’s office, National Grid had “unacceptably low staffing levels” and failed to adequately communicate with municipal officials, first responders and customers in the wake of the two storms.

The attorney general says National Grid failed to respond to emergency calls concerning downed wires in a timely manner. She said some of the delay was due to insufficient staffing. There were about 13,000 downed wires in Massachusetts during Irene and 22,000 during the snowstorm.

Coakley’s office said the company’s response during both storms would have been better if National Grid had used more technical methods of predicting storms rather than just “relying on personal experience.”

The penalties, if granted, cannot be passed on to customers, but must come out of returns to National Grid shareholders. The money would go to the general fund, Massachusetts’ largest account.

Coakley said her office supports legislation that would allow penalties ordered by the public utilities department to be returned to customers.