National Grid has been ordered by the state Public Service Commission to redirect $8.8 million in shareholder reveue toward ratepayers for failing to meet required service standards.
The reason for the ruling, according to Public Service Commission spokesman James Denn, boils down to "too many customers were without power for too long a time."
Figures provided by the commission showed that National Grid had an average of more than one outage per customer in 2006.
The company served 1,589,489 customers and reported 1,607,461 interruptions of five minutes or more. Denn said that simply meant some customers had multiple outages.
PSC Chairwoman Patricia L. Acampora explained that, as part of its approval of National Grid's acquisition of Niagara Mohawk Power Corp. five years ago, National Grid agreed to abide by certain quality standards.
"With respect to the electric reliability standards, National Grid's performance reports during the past three years indicate it has failed a key measure of service reliability," she said in a press release. "This repeated failure is not acceptable."
PSC figures show National Grid's performance in 2004 was actually slightly worse than in 2006, with 1,580,131 total customers and 1,602,708 customers affected. In 2005, there were 1,585,383 customers served and 1,551,448 customers affected.
The punishment for failing to meet standards was $4.4 million, but the commission doubled the fine because of the failures in the two previous years.
While National Grid spokesman Steve Brady said the company was disappointed that it didn't meet goals it helped craft, he pointed to unusual weather events like the October Surprise storm.
Last year "was a tough year for us weatherwise, both in terms of what most folks would consider major storms and other weather event," he said. "We're never satisfied when we don't meet our targets, and we know reliability is an issue."
To that issue, Brady said the utility is investing $1.7 billion over the next five years to improve transmission and distribution in the former Niagara Mohawk service area.
Brady said it has yet to be determined how the money will be repaid to ratepayers, although last year, when National Grid was ordered to pay $4.4 million for deficient service, it gave its customers one-time rebates that averaged about $5 per customer.