Do Utility Companies Deserve Fines for Storm Response?

Do NStar and National Grid deserve to pay millions for their response to "Snotober?" Attorney General Martha Coakley Thinks so.

Coakley's Office is seeking a $9.7 million fine for NStar and $16 million for National Gride after an investigation revealed they "failed to adequately prepare, respond, and communicate during Tropical Storm Irene and the October 2011 snowstorm."

According to the AGO investigation, NStar fell short of its state-required Emergency Response Plan obligations. In particular, NStar failed:

• "to identify the projected level of severity of both storms;
• "to communicate effectively with customers and municipalities throughout the two major storms
• "to respond to public safety calls about downed wires."

"NStar’s preparation for these storms was woefully inadequate and much of the power loss suffered by hundreds of thousands of customers could have been avoided," Coakley said in the press release. "The company’s slow response to downed wires created a dangerous public safety situation for towns across the Commonwealth. These fines are intended to hold NStar accountable for these failings and to send a message that customers deserve better in future storms."

If NStar is required to pay the penalties, the fees cannot be passed along to customers, but must be covered by shareholders.

In a statement, NStar disagreed with Coakley's assessment, saying that "NStar Electric customers fared better than others in Massachusetts and throughout New England."

“We disagree with the Attorney General’s recommendation given the physical challenges of rebuilding and restoring the electric system following a natural disaster,” said Werner Schweiger, president of NSTAR Electric, in a statement. “The Attorney General is alleging performance violations based on standards that do not exist."

• Read the full press release from the AGO.
• Read the full statement from Nstar.