By Chris Camire
BOSTON -- Attorney General Martha Coakley is seeking a $16 million fine against National Grid due to the company's poor performance during Tropical Storm Irene and an October snowstorm that left hundreds of thousands of Massachusetts residents without power for days or weeks.
The penalty is the largest ever recommended against a utility in Massachusetts.
Coakley recommended the fine after an investigation by her office determined the utility giant failed to adequately prepare, respond and communicate during the storms.
"Combined, these two storms left nearly a million National Grid customers without power, some for more than a week," said Coakley. "National Grid's preparation for these storms was inadequate and its response was unacceptable."
The October 2011 snowstorm left more than 2 million utility customers without power, including 672,000 in Massachusetts, 315,000 in New Hampshire and 830,000 in Connecticut.
In Greater Lowell, about 85,000 homes and businesses were without power. In Worcester County, 152,000 lost power at the storm's peak.
Many residents in towns such as Shirley, Harvard and Ayer, were without power for up to seven days.
National Grid spokeswoman Deborah Drew contested Coakley's findings.
"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
Drew said National Grid will address the issues Coakley has raised in an Aug. 1 formal response with the Department of Public Utilities.
Coakley is seeking $4.6 million for the utility's response to Irene and $11.7 million for its response to the snowstorm.
The fine against National Grid would amount to almost one-third of its net profits of $51.5 million last year. NStar reported net profits of $247 million last year, said Coakley.
Coakley's recommendations come on the heels of a monthlong investigation by the attorney general's office. The state's Department of Public Utilities has the authority to enforce the fines.
The investigation found that National Grid did not respond to emergency calls about downed wires within a reasonable amount of time due to inadequate staffing levels. Coakley also said the company failed to effectively communicate with residents and local officials during the storms.
The town of Tyngsboro alleges that National Grid failed to "maintain basic levels of responsible communication with municipal officials and emergency-management and safety offices," said Coakley.
National Grid's response during both storms would have been better if the company had used more technical methods of predicting storms rather than a "seat-of-the-pants response," said Coakley.
"We understand a lot of Mother Nature can't be totally predicted and certainly can't be controlled but in this day and age shouldn't a utility be able to take advantage of the most advanced software that can predict the severity and location of a storm, so that they can dispatch their crews where they need to?" Coakley said.
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, the state's largest account. Coakley said her office will act as a "watchdog" on consumer rate increases to make sure any fines incurred by National Gird are passed along to shareholders, not ratepayers.
Coakley is pushing legislation that would do more to compensate utility customers who suffer lengthy power outages after severe storms. The bill would require that any penalties paid by utilities after power outages be returned directly to consumers in the form of rate credits.
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