Con Ed, O&R Fined $10.75 Million For 2018 Snowstorm Response

The New York State Public Service Commission announced a record $10.75 million settlement with Consolidated Edison Company of New York, Inc. and Orange and Rockland Utilities Inc. over their poor response to massive power outages during 2018 back-to-back winter storms.

The announcement comes a day after Westchester County Executive George Latimer vowed to review the promises Con Ed made after storms named Riley and Quinn, when 210,000 customers lost service and the company had to basically rebuild its delivery system in Westchester.

SEE:

• Con Ed Planning $100M In Storm Protections For Westchester
• Westchester Reviewing Con Ed Commitments From 2018 Snowstorms

“Utilities have a duty to their customers to be prepared for a storm, to restore power as safely and as quickly as possible, and to keep customers accurately informed during any such event," Commission Chair John B. Rhodes said in the PSC's announcement. "The terms of the joint settlement are consistent with the environmental, social, and economic policies of the Commission and the State and in the public interest. Our decision today clearly demonstrates that if a utility fails, in whole or in part, to meet this standard, the company’s shareholders will be held accountable."

The storms in 2018 were severe weather events. The first, Winter Storm Riley, occurred on March 2 and 3, resulting in about 143,300 customer outages in Con Edison’s service territory and 52,500 customer outages in O&R’s service territory. Four days later, on March 7, the companies’ territories were struck again by a second severe storm, Winter Storm Quinn, which resulted in 66,000 customer outages for Con Edison and 31,500 customer outages for O&R.

Investigation into the utility companies began almost immediately afterward. On March 14, at the direction of Governor Andrew M. Cuomo, department staff considered whether the companies properly prepared for, and responded to, the effects of the storms in compliance with their annually filed emergency response plans.

As part of the investigation, both companies adopted a combined 144 storm plan recommendations back in 2019.

The $10.75 million settlement agreement, comprised of settlement funds and mitigation measures, is the largest ever of its kind for failure to adequately execute a utility emergency response plan.

Under the terms of the agreement, the companies agree to settle alleged violations of their emergency response plans for a combined $10.75 million in ratepayer benefit ($9.5 million to Con Edison and $1.25 million to O&R, which is a Con Ed subsidiary), with $6.45 million in settlement funds and an additional $4.3 million in mitigation measures taken in coordination with the Department of Public Service at the time of the storms.

The $6.45 million in settlement funds will be used for the companies’ electric ratepayer benefit at their next rate cases, allowing for ratepayer input on the funds’ use.

Thursday’s settlement is unrelated to any ongoing investigations of Con Edison and other state utilities resulting from last week’s Tropical Storm Isaias response. Cuomo told Con Ed last week that its franchise could be revoked over it.

The decision may be obtained by going to the Commission Documents section of the Commission’s Web site at www.dps.ny.gov and entering Case Number 19-E-0107 (Con Edison) and 19-E-0108 (O&R) in the input box labeled "Search for Case/Matter Number".