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State Fines National Grid Millions for Failed Storm Responses

National Grid was fined nearly $19 million, the highest fine levied against utilities in Massachusetts for its response to two storms in 2011.

The state on Tuesday ordered a total of $24.8 million in penalties to utility companies for their response to storms in 2011, including $19 million for National Grid, the company that serves Hamilton and Wenham.

Massachusetts Energy and Environmental Affairs Secretary Rick Sullivan joined Department of Public Utilities (DPU) Chairman Ann Berwick and DPU commissioners on Tuesday to announce the findings of the DPU’s investigation into responses to Tropical Storm Irene and the October 2011 snowstorm.

Provided the penalties hold up, customers should see a reduction in their bill, though it is unclear how much, officials said. 

National Grid faces the steepest penalty, at $18.725 million. NSTAR has been ordered to pay $4.075 million, while the Western Massachusetts Electric Company faces a $2 million penalty.

National Grid told the Boston Globe they have not decided whether to appeal the fine.

"We will need some time to evaluate the order fully to consider our options going forward," National Grid spokeswoman Charlotte McCormack said in a written statement to Hamilton-Wenham Patch. "In the meantime, we will continue to remain focused on providing the level of service our customers deserve and expect."

Extended outages throughout service areas in the 2011 storms led to the investigation. In the two towns, residents where some people went days without power.

Recognizing that outages are inevitable in storms of this magnitude, the DPU concluded that all of the utilities failed in their public safety obligation to respond to local public safety officials regarding downed wires. 

“As the number of serious weather events has risen dramatically in Massachusetts, it’s crucial for ratepayers to have electric service that is both safe and reliable,” Sullivan said in a press release. “I am grateful to the Department of Public Utilities for its thorough investigation into these storm responses and we are hopeful that its findings, penalties, and directives will ensure improved preparedness and services during weather events in the future.”

In the case of National Grid, the DPU found systematic failures in the company’s preparation for and response to both storms and ordered that National Grid undergo a comprehensive, third-party management audit of its capacity for responding to emergency events.  

Like the other companies, National Grid failed to effectively coordinate with the towns affected by the storms. Additionally, it left local public safety officials standing by downed wires for as long as several days, had a seriously inadequate response for priority facilities like nursing homes and sewage treatment plants, and secured too few crews, too late. The DPU also noted it had warned and penalized National Grid for similar behaviors in the December 2010 snowstorm.

National Grid, in its written statement in response to Tuesday's fines, said it has already made changes since the 2011 storms, including changes that were implemented with Hurricane Sandy in October.

"We understand customers were frustrated by the outages resulting from the devastating storms in 2011 and we share that frustration," the company's statement said. "We have implemented many changes to our emergency planning and put these into practice during Hurricane Sandy and the November nor’easter."

DPU Chairman Ann Berwick said the state "will not tolerate inadequate responses to local public safety officials."

"Additionally, in this day and age, we expect competent communications with towns and customers alike,” she said.

The three utilities are required to submit their plans for penalty payment to the state within 30 days.

"We welcome the opportunity to review our emergency response procedures to continuously improve our service to customers during emergency events and will work closely with the DPU auditors in that review process," National Grid said in its statement.

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