NSTAR Intends to Appeal DPU Finding on Storm Penalties; $4M Fine

The following is a press release from NSTAR:

NSTAR Electric intends to appeal a ruling issued today by the Massachusetts Department of Public Utilities assessing financial penalties for its response following two devastating storms that swept through the region last fall.

NSTAR was one of the first investor-owned utilities to restore power to its customers in both storms and was able to send 76 line workers to assist National Grid and Western Massachusetts Electric in the wake of the October snowstorm.

The company repeated that performance during the recent Superstorm Sandy, being one of the first to complete restoration and again sending crews to other areas. NSTAR deployed thousands of resources, including hundreds of crews and other support personnel, around the clock to restore power in all of the storms.

“We strongly disagree with the department and are disappointed that they have dismissed the tireless effort put forth by our employees to respond to customers after these historic storms,” said Werner Schweiger, President of NSTAR Electric. “The amount of devastation our system sustained last fall cannot be understated – with an estimated 80 percent of our overheard circuits damaged after Irene alone. We were essentially rebuilding the electric system as we restored power, and the penalties assessed today are simply not in line with the realities of getting the job done.”

While the entire Northeast has experienced above-average storm activity over the last few years, NSTAR remains a top decile performer in restoration and reliability during both storm and non-storm conditions. The department’s decision affirmed that NSTAR followed its emergency response plan, which is submitted to the DPU and approved on an annual basis, but nevertheless assessed penalties for response times to municipal requests for assistance, which were not regulated by the plan.

“The penalties assessed by the department do not follow from any bona fide industry practice, or reasonable operating practice in storm conditions,” said Schweiger. “Storms of the magnitude experienced in 2011 had not occurred for over 20 years in our service area, leaving hundreds of poles and transformers in need of replacement. There is no way to shield the overhead electric system from damage when these storms occur.”

Although NSTAR customers fared better in the storms than others in Massachusetts and New England, circumstances were difficult for customers with service outages. The company is committed to improving overall service with continued investment in smart-switching technology, vegetation management and the formation of open communication channels with customers and municipalities. NSTAR has consistently applauded the work of all of its employees during the storms, including the diligent efforts of its labor unions, UWUA Local 369 and Steelworkers Local 12004.

“The department’s penalties are likely to represent a significant blow to our employees who have made personal sacrifices to serve customers in these storms,” Schweiger said. “They should know that their efforts make all the
difference, regardless of these arbitrary findings.”