Massachusetts slaps utilities with record fines for 2011 outages

CONWAY, Massachusetts Tue Dec 11, 2012 3:34pm EST

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CONWAY, Massachusetts (Reuters) - Massachusetts has fined three electric utilities an unprecedented $24.8 million for their slow response to widespread power outages caused by 2011's devastating Tropical Storm Irene and a pre-Halloween blizzard.

National Grid, a London-listed utility with a market cap of $41.6 billion, faces the steepest penalty, at $18.725 million, the state's Department of Public Utilities (DPU) said on Tuesday.

Boston area's NSTAR was fined $4.075 million and Western Massachusetts Electric Company (WMECo) was ordered to pay $2 million, the DPU said.

Proceeds from the penalties will go to utility customers, it added.

State officials had been investigating the companies following myriad complaints about their preparedness and the power restoration process after the 2011 storms. Both Irene and the fierce October 29, 2011 snowstorm slammed multiple northeastern U.S. states, downing electric lines and plunging millions of people into the dark.

"Like the other companies, National Grid failed to effectively coordinate with the towns affected by the storms," the DPU said in a statement.

"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 nearly $25-million penalty was the highest ever imposed by the DPU and the first it has levied for a storm response, a DPU spokeswoman said.

National Grid said it was still reviewing the DPU's order, while WMECo and NSTAR both said they intend to appeal.

(Editing by Barbara Goldberg and Bob Burgdorfer)

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