NYSEG socked with $1.5 million fine for poor response to Tropical Storm Isaias in August
Tax Watch columnist David McKay Wilson looks into the PSC's fine against NYSEG.
NYSEG will pay a $1.5 million fine, the largest possible amount allowed, to settle complaints that it had failed to adequately communicate with its customers during Tropical Storm Isaias in early August.
The settlement, which was approved Thursday by the state’s Public Service Commission, could provide a modicum of rate relief for NYSEG ratepayers. But that won’t occur until NYSEG’s next rate case, with the fine available to cut a proposed rate hike, or used for special initiatives. The fine amount will grow with interest until then.
That's not sitting well with Westchester County Executive George Latimer, who would rather see electric bills cut immediately, with an across-the-board rate reduction.
"The fine should be paid by reducing the amount of revenue from ratepayers with an across-the-board reduction for failing to respond appropriately," Latimer said.
NYSEG had about 183,000 outages during the August 2020 storm among its customers in northern Westchester, Putnam and Dutchess counties. That storm brought high winds and torrents of rain, snapping utilities poles, and uprooting trees that took down power lines across the region.
Still pending is the PSC’s case against Con Edison, which had far greater problems in its response to the storm, and could face far higher fines.
The storm, which hit with great ferocity on Aug. 4, left almost 1 million electric customers statewide without power. Tens of thousands of households remained without power for more than a week.
The NYSEG fine included $500,000 for each of three violations:
- the failure to contact 80% of his customers on life-support equipment within 12 hours; NYSEG reached just 59% in that time period.
- the failure to contact all of those customers within 24 hours, but reached only 99%.
- the failure to respond to 80% of its customers who called its emergency line within 90 seconds; only 71% reached the utility that quickly.
The NYSEG fine was the maximum allowed by state law. Gov. Andrew Cuomo said Thursday he would submit legislation to raise the cap, and eliminate certain restrictions to the revocation of a utility’s right to deliver electricity and natural gas.
“Having a franchise is not a God-given right and the penalties should be commensurate with the damage caused, but arbitrary caps on penalties continue to stand in the way,” Cuomo said. “We will introduce legislation as part of the budget to remove those caps and clear the path towards franchise revocation.”
Cuomo called on the state Legislature to pass his reform to “hold these companies fully accountable.”
The PSC action comes 17 days after United Westchester, a group that comprises state, county, and municipal officials, issued a scathing report about the utilities response to the storm.
The report said that PSC needed to impose “substantial" penalties that officials hoped would encourage the utilities to harden their equipment, improve communications with the public, and find better ways to predict incoming storms like the ones that increasingly hit our region in the era of climate change.
Latimer co-chaired the group with Assemblywoman Amy Paulin, D-Scarsdale. She chairs the Assembly Committee on Corporations, Authorities, and Commissions, which oversees state legislation on utilities.
Paulin said that NYSEG had made significant improvements since storms Riley and Quinn. She hoped the fine would spark further changes.
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