State fines National Grid $8m
Utility criticized for ’06 storm response
National Grid, the state’s largest utility company, was fined $8 million by state regulators for having a poor performance record in 2006, in what is said to be the largest penalty of its kind in state history.
The money will be returned to ratepayers across the state, many of whom suffered days without power that year.
“This is substantial, and it speaks to the issue of system reliability,’’ said Timothy Shevlin, executive director of the state Department of Public Utilities.
The fine, the result of a yearly review process, was a combination of penalties for poor maintenance programs, storm response, and customer service and was also based on the company’s failure to meet industry standards for three consecutive years.
National Grid, which calculated the $8 million based on a system that compares its performance to industry standards, had asked for mercy from state regulators, attributing its performance in part to four “extraordinary’’ storms in 2006 that left hundreds of thousands of customers without power. The utility asked that the four storms be excluded from the yearly review process.
But the state attorney general’s office argued against the request, saying the company is responsible for responding to such events; and the Department of Public Utilities included the storms as part of its levy.
Attorney General Martha Coakley said yesterday that she supported the department’s “recognition that utility service quality is important and utilities that lose power repeatedly and fail to restore service quickly should be penalized.’’
Debbie Drew, a National Grid spokeswoman, said the company was disappointed that the storms were included in the report, but will comply with the order.
With the fine, state regulators seem to be taking a hard-line stance against utility companies that respond poorly to storms. Earlier this month, Coakley called for a $4.6 million fine for Unitil Corp., saying the company was inept in its response to the December ice storm that left all of its 28,500 customers in the Fitchburg area without power. The DPU has yet to decide on Coakley’s request.
The DPU has issued multimillion dollar fines before, but, Shevlin said, “this [National Grid fine] is the largest penalty we have ever levied against a company.’’
Gary Sullivan, head of the local chapter of the Utility Workers Union of America, supported the decision to fine National Grid, saying the power outages result from failure to properly prepare for storms, which he called a growing concern.
That said, Sullivan called for a different penalty system, so that companies would be forced to invest in maintenance and storm response programs, rather than pay fines to someone else.
“We [workers] don’t have the resources to do maintenance that we’ve historically done in the past,’’ said Sullivan, blaming companies for putting profits over funding for improvements. “I don’t ever remember losing lights like we lose our lights now. We never did.’’
Drew said the four storms National Grid cited in its report overwhelmed its system. The first, a windstorm with heavy rains in January 2006, left 140,000 customers without power. In February of that year, winds in excess of 50 miles per hour left 68,000 customers without power; a multiday lightning and heat storm in August interrupted service to 112,000 customers; and a windstorm in October left 105,000 customers without service.
“The storms were exceptionally severe events,’’ Drew said. “Overall, we are proud of our storm response and have demonstrated our ability to perform well as evidenced by our restoration effort during the December 2008 ice storm.’’
Milton Valencia can be reached at mvalencia@globe.com. 
