Note: URL links added by MAMECNSTAR Better At Lobbying Than Keeping Lights On
Patrick Mehr, Lexington, Mass.
The writer is with the Massachusetts Alliance for Municipal Electric Choice.
on 2012-08-10
Fining NSTAR $9.7 million for its inadequate response to Tropical Storm Irene and the October snowstorm will not make NSTAR a more efficient utility [Aug. 11, Business, "Massachusetts AG Calls For Regulators To Fine NSTAR"].
NSTAR is now part of Northeast Utilities, whose CEO, Charles Shivery, earned $9.7 million in the most recent fiscal year, according to Reuters. Tom May, NSTAR's CEO in 2011, earned $9.2 million, according to the Boston Globe. In light of such executive compensation, is a $9.7 million fine anything to notice?
Each of Northeast Utilities' 313.6 million shares outstanding pays about $1.37 annually in dividends. The proposed fine amounts to 3.1 cents less in dividends per share, a one-time 2.25 percent reduction, not something shareholders will notice.
The only way to get NSTAR to become more efficient is to end its monopoly. Massachusetts House Speaker Robert DeLeo and Ways and Means Chairman Brian Dempsey killed the Muni-Choice bill last month -- for the sixth time in 12 years -- preserving NSTAR's monopoly (http://massmunichoice.org). Massachusetts campaign finance records show that Reps. DeLeo and Dempsey were top beneficiaries of donations by NSTAR's senior executives over the past 10 years.
NSTAR is better at lobbying the Massachusetts Legislature than at keeping the lights on, its rates low or our trees standing.
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Massachusetts AG Calls For Regulators To Fine NSTAR For Storms Response
By BRIAN DOWLING bdowling@courant.com
The Hartford Courant
August 13, 2012
Massachusetts Attorney General Martha Coakley said this week that NSTAR, a subsidiary of Connecticut's Northeast Utilities, should pay $9.71 million for its inadequate response to Tropical Storm Irene and the October snowstorm in 2011, according to filings with Massachusetts regulators.
The attorney general's brief, filed Tuesday with the Massachusetts Department of Public Utilities, cited the utility's failure to identify the severity of the storms before they hit, and failure to communicate properly with local public safety officials. NSTAR responded slowly to downed wires, creating a dangerous public safety situation, Coakley said.
"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.
The utility disputed Coakley's claims, saying in a statement that it was proud of their employees' response to the storms.
"We disagree with the Attorney General's recommendation given the physical challenges of rebuilding and restoring the electric system following a natural disaster," said Werner Schweiger, president of NSTAR Electric. "We hope that the DPU will make its final decision based on established standards and actual performance."
The call for fines comes weeks after Connecticut regulators filed their final statements regarding Connecticut Light & Power's response to the same two storms. The Connecticut Public Utilities Regulatory Authority concluded that CL&P's storm response was inadequate and that the authority could limit the utility's ability to recoup storm costs in its next rate case.
On Friday, two Connecticut unions cited Coakley's remarks about staffing levels to boost their argument for more line workers as they negotiate their contract with CL&P.
John Fernandes, business manager for Local 457 of the International Brotherhood of Electrical Workers, said that Northeast Utilities CEO Thomas May, who led NSTAR during the storms, refused to adequately staff line crews in Massachusetts and now is trying to keep staffing levels low in Connecticut. NU is the parent company of CL&P and NSTAR.
"Tom May's refusal to hire an adequate number of line workers deprived Massachusetts residents of their right to prompt power restoration, and now he's trying to do the exact same thing to the people in Connecticut," Fernandes said in a statement. "In two states now, and following two different power outages, Nstar and Northeast Utilites have tried to get by with a skeleton crew, and the results have been disastrous in every instance."
About 1,000 workers from the two unions, Locals 420 and 457 of the IBEW, have been working under an expired contract since June 1, and current contract negotiations are stalling on staffing levels.