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Mass. DPU Hits Utilities With Nearly $25 Million In Fines Over 2011 Storms

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BOSTON (CBS/AP) — State energy regulators have fined three Massachusetts utilities nearly $25 million for their response to two major storms in 2011.

The penalties were announced Tuesday by the Department of Public Utilities after an investigation that took more than a year.

WBZ NewsRadio 1030’s Carl Stevens reports

Some Massachusetts residents were without power for a week after Tropical Storm Irene in August 2011 and a surprise October snowstorm that same year.

The fines are against National Grid, NStar and Western Massachusetts Electric Co.

National Grid was hit hardest, with an $18.725 million fine. In a statement Tuesday, the company said they have learned from their mistakes and are still deciding whether or not to file an appeal.

“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,” the company said in a statement.

NSTAR was ordered to pay $4.075 million; and Western Massachusetts Electric Company (WMECo) to pay $2 million.

NSTAR released a statement Tuesday morning saying they will appeal the fine.

“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.”

Western Massachusetts Electric Co. also says they will appeal.

“We strongly disagree with the DPU’s finding and are disappointed they have chosen to take this path,” said Peter Clarke, President of WMECo.  “We had hoped the department would follow the evidence showing our response properly addressed priorities created by the storm.”

The fines are a bit less than the nearly $30 million recommended by Attorney General Martha Coakley had recommended for inadequate response efforts. The companies had disputed her recommended fines.

The DPU reported systematic failures in National Grid’s preparation and response to both storms. As a result, National Grid has been ordered to undergo a third-party audit of its emergency response plans.

Officials say that NSTAR performed well in most aspects, but failed when it came to responding to priority calls and customer communication.

Western Massachusetts Electric Co. received similar criticism as NSTAR. Because Irene had minimal impact on WMECO’s customers, they were only fined over the October snow storm.

Under a new state law passed earlier this year, the fines will be returned to consumers in the form of rate relief.

(TM and © Copyright 2012 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2012 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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