MA AG Seeks $10 Million Fine on NStar, owners of Northeast Utilities; Jepsen Takes Different Course

Massachusetts Attorney General Martha Coakley wants the Bay State to fine NStar nearly $10 million for its poor performance in responding to two major storms last year.“NStar’s preparation for these storms was woefully inadequate and much of the power loss suffered by hundreds of thousands of customers could have been avoided,” Coakley said in a statement. “The company’s slow response to downed wires created a dangerous public safety situation for towns across the Commonwealth. These fines are intended to hold NStar accountable for these failings and to send a message that customers deserve better in future storms.”

 

In Connecticut, Attorney General George Jepsen chose to wait until CL&P seeks its next rate hike request to impose penalties. NStar merged with Northeast Utilities (parent company of CL&P) earlier this year despite questions about its commitment to performance and customer service.

“Normal storm costs are usually passed along to ratepayers,” Jepsen said. “But we asked PURA [Public Utilities Regulatory Authority] to disallow 30 to 50 percent of the $290 million storm costs because of CL&P’s response to the storms which was much worse than Massachusetts.”

PURA decided not to give a number because it wants to see what CL&P does to improve their response capability before the next rate increase request which is in 2014. “PURA agreed with our core point that the response [to the storms] was inadequate. It wants to see what progress CL&P makes. So they have that hanging over their head until the rate increase,” Jepsen said.

Insiders say the $9.7 million fine Coakley is seeking against NStar is actually low. If the 30 to 50 percent of storm costs are disallowed as Jepsen wants, it would cost CL&P up to $145 million.

Some customers and advocacy groups in both Connecticut and Massachusetts argued against the NStar – Northeast Utilities merger fearing performance and service would suffer, even from the pathetic level of service they now provide.