NYSEG to pay $1.5 million in penalty for Tropical Storm Isaias violations

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ALBANY — The New York State Public Service Commission, Thursday, adopted the terms of a $1.5 million settlement with New York State Electric & Gas Corporation to resolve a penalty action against the utility for its alleged violations regarding its preparation and restoration efforts related to Tropical Storm Isaias. 

“With Tropical Storm Isaias in August, we once again experienced an unacceptable response from utility companies. As a result, we are doing everything we can to make sure New Yorkers are compensated,” Governor Andrew Cuomo said. “While this $1.5 million penalty is a step in the right direction, it is a drop in the bucket compared to the hardship New Yorkers endured as a result of the company’s mismanagement and inadequate response to the storm.”

He said he will introduce legislation to remove penalty caps and to “clear the path towards franchise revocation.”

 “The department conducted a thorough investigation of NYSEG’s response to Tropical Storm Isaias and performed an evaluation of their consistency with its emergency response plan,” said Commission Chairman John Rhodes. “The investigation found that, while NYSEG’s performance was better than its response to past storms, it nevertheless violated its own plans three times. As part of the settlement, NYSEG admitted to the three violations and agreed to provide customers with $1.5 million in benefits, the maximum amount allowed under the statute.”

On August 4, 2020, TS Isaias struck the state and caused nearly a million power outages, and of those outages, 183,000 were located in the NYSEG service territory — the majority of outages experienced by NYSEG were in its Brewster Division, which serves customers in Dutchess, Putnam, and Westchester counties. By 5:00 p.m. on August 8, 2020, more than 90 percent of customers in the NYSEG’s Brewster Division were restored, with full restoration occurring just before 10 a.m. on August 10, 2020. 

As part of the settlement, NYSEG admitted to all three violations, and the company stipulated that their actions did not comply with rules and regulations. The company agreed to a penalty amount of $1.5 million paid from shareholder funds for the admitted three violations. The funds will be used to provide ratepayer benefits in a manner to be determined by the commission in the company’s next electric rate case, allowing for ratepayer notice and comment on the funds use.