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SJC upholds $22M in fines against electric utilities

By: Patrick Cassidy |

The state’s highest court has affirmed most of the fines against three electric utilities for their response to outages caused by two 2011 storms.

In an order issued Thursday, the Supreme Judicial Court upheld nearly $22 million in fines the state Department of Public Utilities levied against NStar, National Grid and Western Massachusetts Electric Co. for failing to “restore service to customers in a safe and reasonably prompt manner” after Tropical Storm Irene on Aug. 28, 2011, and a snowstorm on Oct. 29, 2011.

The utilities had appealed the fines, claiming that the DPU had used the wrong standard, the findings were not supported by the evidence and the calculations constituted an abuse of discretion. The court rejected the arguments for the most part.

The court did, however, vacate $900,000 in fines against National Grid, which delivers electricity to Nantucket and other parts of the state, and more than $2 million in fines against NStar, which delivers electricity to Cape Cod, Martha’s Vineyard and other areas.

“We’re obviously pleased that the (Supreme Judicial Court) upheld the department’s authority to levy these penalties,” DPU spokeswoman Krista Selmi said. “When customers power is out the utilities have a responsibility to restore power in a reasonably prompt manner and the DPU takes its role as regulator very seriously.”

Selmi said the DPU has sent a clear message to utilities that they will be judged on their response to outages.

Irene, though less destructive than initially predicted, knocked out power for more than 500,000 customers in NStar’s territory, which includes Cape Cod. Although almost half of those who lost power had their electricity restored within an hour, some customers on the Cape did not get their power back for more than six days after the storm.

Outages related to the Oct. 29, 2011, storm affected about 19,000 customers on the Cape. All of the Cape power outages related to the October storm were restored within about three days, according to NStar officials.

“We are pleased that the court invalidated penalties where there wasn’t enough evidence to warrant them. Tropical Storm Irene was an unprecedented storm that caused historic damage across our region,” NStar spokeswoman Caroline Pretyman wrote in a statement emailed to the Times. “Since that time, we have made great strides in improving our emergency response with a focus on working with impacted communities to enhance our partnership with them during such devastating events.”

National Grid is disappointed with the court’s decision, according to a statement forwarded by a company spokeswoman.

“We have great trust in and respect for the regulatory and legal process and our place in it. We continue to be proud of our employees’ work during both storms,” according to the statement. “We remain focused on meeting the needs of our customers, have made remarkable enhancements in emergency planning and response, and continually invest in our electricity system to improve reliability and resiliency.”

Massachusetts Attorney General Martha Coakley, who had initially called for $10 million in fines against NStar, called the court ruling a victory.

“Our investigation found that the utilities’ preparation and response to these storms was woefully inadequate,” she said in a statement released Thursday. “We recommended record penalties against the utilities, and the fines upheld today send a clear message that customers deserve better in future storms.”