New York regulators on Thursday approved Con Edison (NYSE:ED) and its Orange and Rockland subsidiary paying a record $82 million to settle eight cases of operating “imprudence” and emergency response violations since 2018 (20-E-0422).

The Public Service Commission unanimously approved the settlement, cleaning the slate for the state’s largest investor-owned utility of all investigative proceedings, including for its response to Tropical Storm Isaias in August 2020, for which the PSC also fined Central Hudson Gas and Electric $1.5 million. The commission also fined Internet service provider Frontier Communications of New York $2.7 million for failing to adequately prepare for and respond to emergencies, including Tropical Storm Isaias.

“These settlements of record size in record time, together with the greatly enhanced storm response requirements, reflect the governor’s determination to protect ratepayers by both holding utilities accountable for their failures and ensuring that they are better prepared for future storm events,” Rory Lancman, special counsel for ratepayer protection, said. “There is a laser focus at the department and throughout the administration on preparedness and accountability, and any utility doubting that does so at its peril.”

The settlements add to a previously announced $72 million settlement with broadband provider Altice and a $1.5 million settlement with New York State Electric and Gas related to those companies’ failures to prepare and respond to Isaias, and $30 million forfeited by PSEG Long Island to resolve litigation related to the utility’s management failures during the storm.

In a separate order, the commission also directed each IOU under its jurisdiction to develop, update and file a detailed emergency response plan (ERP) (20-E-0618).

“External and internal communication practices, personnel roles and responsibilities, and procedures implemented before, during and following emergencies, represent just a fraction of the numerous measures that are required to be in each electric utility’s ERP,” the commission said.

The regular session began on July 15 with the swearing in of three new commissioners on the PSC, which is newly expanded from five to seven members. The new commissioners are David Valesky, John Maggiore and Rory Christian.

Improved Readiness

The cases against Con Edison began with a July 2018 steam line rupture in Manhattan’s Flatiron district, the result of a flooding event, with reports inconclusive on the utility’s prudence in operating and maintaining the associated steam plant.

Two cases concerned Manhattan and Brooklyn outages a week apart in July 2019. Department of Public Service staff determined the Manhattan outage resulted from Con Edison omitting ground (or neutral) wires for relays at a midtown substation. The investigation of the Brooklyn outage identified seven violations of Con Edison’s ERP related to municipal and customer communications, as well as other procedural violations, the PSC said.

Another two cases related to Isaias, one on Con Edison’s overall preparedness and response, and a second on four faults that occurred at Con Edison’s Rainey substation in Queens, an event investigators said was initiated by flashovers on 345-kV disconnect switch support insulators associated with four separate circuit breakers.

PSC Interim Chair John B. Howard asked, “Where is Con Edison today and have we seen improvement in their ability to handle these heat events, particularly in the outer boroughs?”

“We have seen a noticeable improvement,” said Kevin Wisely, director of the Department of Public Service’s Office of Resilience and Emergency Preparedness. “We’ve already had a few heat events, and we’re going into a couple hot days, but Con Ed’s use and implementation of voltage reductions may go into a second contingency on the networks in combination with the pre-deployment of generators to networks and stations. And the positive outreach to consumers to conserve in partnership with the city of New York has really shown improvements.”

“The basic premise of the measures and the penalties that we undertake are designed to improve future performance, and linking the findings of this case to improvements in the utilities’ emergency response plans is the corrective action that we seek,” Howard said.

Performance Audits

Commissioner Diane Burman asked about future storm preparation and performance audits by the DPS.

“Storm preparation and audit really is to get to the root of how Con Edison and O&R forecast their storms,” said Joseph Suich, director of DPS’s Office of Investigations and Enforcement. “Why is that so important? Well, proper forecasting leads to proper classification, which leads to proper storm staffing, which then leads to appropriate restoration time. On a big storm like Isaias, whether we like to say it or not, you’re never going to have restoration completely done in the next day. These things take time.”

Commissioner Tracey Edwards said that “when this [Isaias] investigation was commenced, there were two other open investigations,” referring to the steam line rupture and 2019 outage cases. “Do you think that the changes that were made are sustainable so we would be able to continue the speed of investigations?”

“Each investigation is different; some are small and get wrapped up in a matter of weeks, and some, like this one, take a year,” Suich said. “I think the speed which we initially started with may have been a little faster than we should have, but throughout we stayed and followed the facts. As we proceeded, we dug in, and when we dug in we found some allegations we made were right, some allegations we made needed to be dropped because they were not right, and some we needed further information on, which is why [the Isaias case] was going into trial. … I think a year on major storm investigations is our new standard.”

Making one comprehensive settlement was good for all parties, and “Con Edison also is looking for that same clean slate,” Suich said.

“The only unique thing that we did in regards to this investigation is, within a week after Con Ed and the various services were restored at the various utilities, we were deposing people, and the reason that’s important and I think it needs to be replicated is because people’s minds are fresh,” DPS General Counsel Robert Rosenthal said. “They knew what had happened, and they were already undertaking their own internal analysis about what had gone right and what had gone wrong. … We deposed and interviewed dozens of witnesses within two or three weeks after that storm.”