Cuomo Announces Settlement with NYSEG

NYSEG, Rochester Gas & Electric failed to prepare for 2018 winter storm

Tom Puckett
December 19, 2019 - 11:28 am

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Buffalo, NY (WBEN) Governor Cuomo announces a $10.5 million settlement with two upstate utilities, NYSEG. and Rochester Gas & Electric Corp., following the companies' failure to adequately prepare for and restore service after storms in 2018 swept through their service territories and left more than 300,000 homes and businesses without power, in the dark and in the cold.

A consent order will require NYSEG and RG&E to develop a more robust storm response program, enhance communication and coordination with municipal and county governments, and strengthen support for people on life-saving equipment.

"It is beyond unacceptable to leave hundreds of thousands of customers in the dark for as long as these utilities did last year," Governor Cuomo said. "This settlement makes crystal clear that utilities in New York have an obligation to prepare for severe weather and to develop robust storm response programs, and if they fail to adequately do that job we will hold them accountable and force them to change how they do business."

As part of the settlement announced today, NYSEG acknowledges and admits to 18 violations of its state-approved emergency response plans, and RG&E acknowledges and admits three violations.

To compensate customers, company shareholders will pay $10.5 million: $9 million from NYSEG and $1.5 million from RG&E. The money will be used to provide customer benefits at the direction of the Public Service Commission. In addition, the companies will do the following:

In the near term, NYSEG will hire and maintain 20 additional employees with storm restoration responsibilities; additionally, PSC staff and NYSEG will review long-term staffing needs and requirements;

NYSEG will maintain at least 175 damage assessment trained employees, excluding employees who perform restoration work during an emergency event;

NYSEG and RG&E's Emergency Response Organization will form a group to develop a Storm Response Exercise program to include in-the-field activities and non-table-top storm response exercises, including testing their enhanced life-support equipment customer contact and tracking procedures, as well as communication and coordination with which will include municipal and county governments;

NYSEG agrees to retain a third-party consultant, subject to consultation with Commission staff, to audit and assess the companies' storm response training and training exercise programs and NYSEG agrees that shareholders will bear any incremental costs for the term of engagement for the consultant.

Department of Public Service CEO John B. Rhodes said, "The primary task of a utility is to supply safe and adequate electricity to customers. A key component of that is for the utility to be prepared for a storm and to restore power as safely and as quickly as possible, and we will hold them accountable to do just that."

In recent years, the State has faced an increased frequency of severe weather events that have impacted utility infrastructure. It is mission-critical that utilities are adequately prepared to meet and address these new realities and respond appropriately, including concretely improving plans and practices with each cycle.

The Commission issued an order on April 18, 2019 commencing an administrative enforcement proceeding against NYSEG and RG&E that would consider penalties against the company for alleged failures to adequately prepare for storms that hit their service territories in 2018. Today's settlement will be reviewed and acted upon by the Commission at a future session.

The Commission also directed Department staff to file an enforcement action in State Supreme Court to compel the utility to comply with storm preparedness and response requirements, and a proposed consent order is to be filed in State Supreme Court to settle the Commission's enforcement litigation.

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