National Grid Has Been Fined More than $40 Million for Labor, Ethics and Price Fixing

Thursday, January 24, 2019

GoLocalProv Business Team

National Grid plc, the British conglomerate that owns and operates National Grid in Rhode Island, has been fined in excess of $40 million by federal and state agencies.

The fines and penalties include price-fixing, environmental crimes, and labor violations.

SEE SLIDES BELOW OF THE BIGGEST FINES LEVIED

GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST

In New England, the Massachusetts Department of Public Utilities (DPU) fined the company on Monday of this week $750,000, but that pales in comparison to an $18 million penalty that Massachusetts regulators hit National Grid with for failing to plan for and respond to a major storm.

In December 2018, New York regulators cited National Grid for a natural gas explosion that injured three and damaged homes.

"NY State Public Service Commission ordered National Grid to explain why the Commission should not commence a penalty action against the company for alleged violations of the Commission’s gas safety regulations that led to a natural gas explosion that injured three people and damaged several homes in Little Falls, Herkimer County earlier this year. If National Grid fails to adequately respond to the allegations gas safety investigators have confirmed, staff will ask the Commission to commence a penalty action," said the Commission in its press release. That case is still pending before regulators.

View Larger +

Governor Gina Raimondo

As recently as March 2018, Governor Gina Raimondo criticized National Grid for the company’s response to a number of winter storms. "Rhode Islanders deserve better service from National Grid. I ordered this investigation in October because I saw residents in neighboring states get their power back soon after the storm ended, while Rhode Islanders had to wait days,” said Raimondo.

“The delay was not because crews weren't working quickly enough, it was because Grid's management failed their customers. They failed to communicate. They failed to adapt,” she added.

Raimondo ordered an investigation by the Rhode Island Public Utilities Commission, and the report developed by a third party expert concluded in part, “National Grid, unfortunately, failed to recognize the expanded impact of the storm in a reasonably timely manner and, therefore, neither classified the storm event properly nor took action in a manner that would allow it to have adequate resources in place at the time they were most needed. This resulted in an extended restoration duration of as much as 36 hours."

Read the report HERE

View Larger +

Largest Fine State Fine

As GoLocalWorcester reported in 2012, the Massachusetts DPU ordered a total of $24.8 million in penalties, all of which were ordered to be returned to the utilities’ customers as a result of its investigation into the electric utility's responses to Tropical Storm Irene and an October 2011 snowstorm.

National Grid was hit with the steepest penalty, at $18.725 million; NSTAR was ordered to pay $4.075 million; and Western Massachusetts Electric Company (WMECo) to pay $2 million. Recognizing that outages are inevitable in storms of such magnitude, the DPU concluded that all of the utilities failed in their public safety obligation when it came to responding to local public safety officials regarding downed wires.

“As the number of serious weather events has risen dramatically in Massachusetts, it’s crucial for ratepayers to have electric service that is both safe and reliable,” said Secretary Rick Sullivan. “I am grateful to the Department of Public Utilities for its thorough investigation into these storm responses and we are hopeful that its findings, penalties, and directives will ensure improved preparedness and services during weather events in the future.”

In the case of National Grid, the DPU found systematic failures in the company’s preparation for and response to both storms and ordered that National Grid undergo a comprehensive, third-party management audit of its capacity for responding to emergency events.

View Larger +

Ethics Violation in NY Sparked Million Dollar Plus Fine

Syracuse.com reported that Grid was hit with a significant penalty for ethics violations. "National Grid is expected to pay a $1.667 million penalty next month to settle charges that for years it plied workers at the state agency that regulates the utility with gifts including meals and rounds of golf. The gifts were uncovered during an investigation of Public Service Commission employees by state Inspector General Catherine Leahy Scott," wrote Syracuse.com in 2012.

Millions of MA Violations Pending

GoLocal received dozens of pages of cases of enforcement actions by the MA DPU totaling millions in additional fines. In addition,"29 Exit Letters are exempt because they involve a pending adjudicatory or investigatory matter, which are exempt pursuant to [MA State Laws] G.L. c. 4, § 26(d) and G.L. c. 4, § 26(f), respectively. Similarly, 7 NOPVs are withheld because they relate to incidents that are subject to a pending enforcement action or additional investigation by the Department and releasing such NOPVs could compromise investigative efforts," said Katie Gronendyke, Press Secretary in the MA Executive Office of Energy and Environmental Affairs.

National Grid Response

After multiple requests for response, National Grid's Ted Kresse said, "At this point, we’re fully focused on the restoration of service to those customers impacted on Aquidneck Island"

Some of the federal fines date back to 2000 and include companies and subsidiaries acquired by the British energy company.

SEE SLIDES BELOW OF THE BIGGEST FINES LEVIED