Title: Mass. Elec. Co. v. Dep’t of Pub. Utils.

State: massachusetts

Issuer: Massachusetts Supreme Court

Document:

NOTICE:  All slip opinions and orders are subject to formal 
revision and are superseded by the advance sheets and bound 
volumes of the Official Reports.  If you find a typographical 
error or other formal error, please notify the Reporter of 
Decisions, Supreme Judicial Court, John Adams Courthouse, 1 
Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-
1030; SJCReporter@sjc.state.ma.us 
 
SJC-11526 
SJC-11527 
SJC-11528 
 
MASSACHUSETTS ELECTRIC COMPANY1 & another2  vs.  DEPARTMENT OF 
PUBLIC UTILITIES. 
 
NSTAR ELECTRIC COMPANY  vs.  DEPARTMENT OF PUBLIC UTILITIES. 
 
WESTERN MASSACHUSETTS ELECTRIC COMPANY  vs.  DEPARTMENT OF 
PUBLIC UTILITIES. 
 
 
 
Suffolk.     April 7, 2014. - September 4, 2014. 
 
Present:  Ireland, C.J., Spina, Cordy, Botsford, Gants, Duffly, 
& Lenk, JJ.3 
 
 
Electric Company.  Public Utilities, Electric company.  
Department of Public Utilities.  Penalty.  Administrative 
Law, Substantial evidence, Findings. 
 
 
 
 
Civil actions commenced in the Supreme Judicial Court for 
the county of Suffolk on December 28, 2012. 
 
 
The cases were reported by Spina, J. 
 
                                                          
 
1 Doing business as National Grid. 
 
2 Nantucket Electric Company, doing business as National 
Grid. 
 
3 Chief Justice Ireland participated in the deliberation on 
these cases prior to his retirement. 
2 
 
 
 
Robert J. Keegan (Cheryl M. Kimball with him) for NSTAR 
Electric Company & another. 
 
David S. Rosenzweig (Erika J. Hafner & Michael J. Koehler 
with him) for Massachusetts Electric Company & another. 
 
Christopher K. Barry-Smith, Assistant Attorney General, for 
Department of Public Utilities. 
 
 
 
GANTS, J.  Three utility companies (utilities) challenge 
orders entered against them by the Department of Public 
Utilities (department) that impose monetary penalties for 
failing to "restore service to [their] customers in a safe and 
reasonably prompt manner," in violation of 220 Code Mass. Regs. 
§ 19.03(3) (2010), after electrical outages arising from 
Tropical Storm Irene (Irene) on August 28, 2011, and a snowstorm 
two months later on October 29 (October snowstorm).  The 
utilities -- Massachusetts Electric Company and Nantucket 
Electric Company, each doing business as National Grid 
(collectively, National Grid); NSTAR Electric Company (NSTAR); 
and Western Massachusetts Electric Company (WMEC) -- claim on 
appeal that (1) the department made an error of law in failing 
to apply the prudence standard when assessing the utilities' 
storm performances; (2) the department's findings were not 
supported by substantial evidence; and (3) the department's 
penalty calculations lacked the necessary subsidiary findings 
and constituted an abuse of discretion. 
3 
 
We affirm in part and reverse in part.  We conclude that 
the department applied the appropriate reasonableness standard 
in finding that the utilities violated their duty to restore 
service in a safe and reasonably prompt manner.  We also 
conclude that the department's over-all findings regarding 
National Grid and WMEC were supported by substantial evidence, 
as were its findings regarding the deficiencies of NSTAR's 
communication with municipal officials and the general public, 
but that its finding that NSTAR failed timely to respond to 
priority two and three wires-down calls was not supported by 
substantial evidence.  We, therefore, vacate the penalties the 
department imposed on NSTAR that were based in part on this 
unsubstantiated finding, and remand to the department for the 
imposition of penalties that reflect the more limited scope of 
its factually supported findings on this subject.  Finally, as 
to the remaining penalties, we conclude that the department made 
the necessary subsidiary findings and, with two exceptions, did 
not abuse its discretion in its imposition of monetary 
penalties.  As to those exceptions, we reverse and vacate the 
monetary penalties imposed against National Grid for its damage 
assessment performance during the last two days of the Irene 
restoration period and for its acquisition and deployment of 
resources during the last two days of the October snowstorm 
4 
 
restoration period, because there was not substantial evidence 
supporting a violation on those days. 
 
Background.  1.  Statutory background.  The department is 
tasked with the "general supervision of all . . . electric 
companies," G. L. c. 164, § 76, and, consistent with that 
authority, has evaluated utilities' performance in restoring 
power during and after major storms for at least the last three 
decades.  See, e.g., Fitchburg Gas & Elec. Light Co., D.P.U. 09-
01-A (2009) (Unitil); Eastern Edison Co., D.P.U. 85-232 (1986).  
In fulfilling its oversight responsibilities, the department has 
long declared that Massachusetts utilities have an obligation to 
restore service in a safe and timely manner when electric 
service has been disrupted by a major storm.  See, e.g., Unitil, 
supra (2008 winter storm); Western Mass. Elec. Co., D.P.U. 95-86 
(1995) (severe wind storm); Eastern Edison Co., supra (Hurricane 
Gloria).  After a December, 2008, winter storm in which all of 
Fitchburg Gas and Electric Light Company's customers lost power, 
some for up to two weeks, the department reviewed the utility's 
response and concluded that the utility's poor performance in 
restoring service to customers in an effective and timely manner 
warranted monetary penalties, but noted that it lacked the power 
to impose them.  Unitil, supra at 20, 91, 181. 
 
That changed on November 12, 2009, just ten days after the 
issuance of the Unitil decision, when the Legislature enacted an 
5 
 
"Act Relative to Public Utility Companies," St. 2009, c. 133 
(act).  The act directed the department to "promulgate rules and 
regulations to establish standards of acceptable performance for 
emergency preparation and restoration of service for electric 
. . . companies doing business in the commonwealth," and 
provided that the department "shall levy a penalty" against any 
company found to have violated those standards.  G. L. c. 164, 
§ 1J.  The department was authorized to impose a penalty of up 
to $250,000 per violation per day, provided that the total for 
"any related series of violations" did not exceed $20 million.  
Id.  The act also required utility companies annually to submit 
emergency response plans (ERPs), subject to the department's 
review and approval, "designed for the reasonably prompt 
restoration of service in the case of an emergency event."4  
G. L. c. 164, § 85B.  The ERPs were required to include the 
following:5  (1) the names of "management staff responsible for 
company operations during an emergency"; (2) "a communications 
                                                          
 
4 An emergency event occurs where a storm or other event 
beyond a utility company's control causes widespread outages or 
service interruptions.  A utility company may classify –- using 
procedures outlined in its emergency response plan (ERP) –- an 
event as anywhere from level I through V based on the expected 
number of service interruptions and their estimated duration.  A 
level III, IV, or V event is considered an emergency event. 
 
5 General Laws c. 164, § 85B (a), was subsequently amended 
in 2012.  See St. 2012, c. 216, § 4.  Because the storms at 
issue occurred in 2011, the revisions in the statute made in 
2012 do not apply. 
6 
 
system with customers during an emergency extended beyond normal 
business hours and conditions"; (3) contact with those who have 
a medical need "for essential electricity," including but not 
limited to elderly and physically disabled individuals; (4) 
designation of staff assigned to communicate with local 
officials and relevant regulatory agencies; (5) provisions 
designed to ensure the safety of a company's employees and 
contractors; (6) "procedures for deploying company and mutual 
aid crews to work assignment areas"; and (7) identification of 
and procedures for obtaining "additional supplies and equipment 
needed during an emergency."  G. L. c. 164, § 85B (a) (1)-(7), 
inserted by St. 2009, c. 133, § 5.6  See 220 Code Mass. Regs. 
§ 19.05(1), (3) (2010). 
 
After passage of the act, the department promulgated 
regulations providing performance standards for emergency 
preparation, restoration of service, and reporting.  220 Code 
Mass. Regs. § 19.03 (2010).  Section 19.03(2) establishes a 
utility company's duty to prepare for an emergency event:  "Each 
Company shall ensure that it is adequately and sufficiently 
                                                          
 
6 If a company failed "to implement its [ERP]," and that 
failure resulted in power outages "materially longer than they 
would have been but for the company's failure," the Department 
of Public Utilities (department) was authorized to prevent the 
company from recovering all or part of its service restoration 
costs through the rates it charges customers.  G. L. c. 164, 
§ 85B (d).  Rate recovery, however, is not at issue in these 
cases. 
7 
 
prepared to restore service to its customers in a safe and 
reasonably prompt manner during an Emergency Event."  Section 
19.03(3) establishes a utility company's duty to restore service 
during an emergency event: 
"Each Company shall restore service to its customers in a 
safe and reasonably prompt manner during all Service 
Interruptions and outages.  During an Emergency Event, this 
shall include at a minimum, but not be limited to, 
implementing all applicable components of the Company's ERP 
related to restoration of service." 
 
 
The department may open an investigation into a utility 
company's performance during an emergency event on its own 
initiative or at the request of the Attorney General or an 
affected municipality.  220 Code Mass. Regs. § 19.05(1) (2010).  
Where the department finds that a company violated any of these 
performance standards, it may impose a penalty within the 
parameters set forth in G. L. c. 164, § 1J.7 
 
2.  Factual background.  On August 28, 2011, Irene hit the 
New England area.  At least four inches of rain fell on the 
region, with wind gusts reaching sixty-seven miles per hour. 
NSTAR customers experienced widespread power outages through 
September 2; National Grid customers suffered such outages 
through September 3.  Two months after Irene, an October 
snowstorm dropped one foot of snow throughout much of the 
                                                          
 
7 Any penalty levied by the department for a violation of 
the department's storm performance standards is to "be credited 
back to the company's customers in a manner determined by the 
department."  G. L. c. 164, § 1K. 
8 
 
Commonwealth and up to thirty-two inches in western 
Massachusetts.  As with Irene, the snowstorm resulted in 
widespread outages beginning on October 29 and lasting until 
November 3 for NSTAR customers and November 6 for National Grid 
and WMEC customers. 
 
The department opened separate investigations regarding the 
performance of each of these three utility companies, with the 
investigation of NSTAR and National Grid focused on both Irene 
and the October snowstorm, and the investigation of WMEC focused 
solely on the October snowstorm.  The department's 
investigations included dozens of records requests, submission 
of written testimony by various witnesses, sixteen public 
hearings throughout the utilities' territories, and several days 
of evidentiary hearings.  On December 11, 2012, the department 
issued its decisions (orders) in each of the proceedings, 
rejecting the majority of the Attorney General's allegations but 
finding that each of these three utilities had –- to varying 
degrees -- violated its obligation to "restore service to its 
customers in a safe and reasonably prompt manner" during these 
emergency events, in violation of 220 Code Mass. Regs. 
§ 19.03 (3). 
For these violations, the department levied a penalty of 
$18.725 million against National Grid, $4.075 million against 
NSTAR, and $2 million against WMEC.  The utilities each filed an 
9 
 
appeal in the county court pursuant to G. L. c. 25, § 5.8  A 
single justice reserved and reported the cases to the full 
court, and they were joined for oral argument. 
Discussion.  Our standard of review when considering an 
appeal pursuant to G. L. c. 25, § 5, is "well settled": 
 
"[A] petition that raises no constitutional questions 
requires us to review the department's finding to determine 
only whether there is an error of law. . . .  The burden of 
proof is on the appealing party to show that the order 
appealed from is invalid, and we have observed that this 
burden is heavy. . . .  Moreover, we give deference to the 
department's expertise and experience in areas where the 
Legislature has delegated to it decision-making authority, 
pursuant to G. L. c. 30A, § 14.  We shall uphold [the 
department's] decision unless it is based on an error of 
law, unsupported by substantial evidence, unwarranted by 
facts found on the record as submitted, arbitrary and 
capricious, an abuse of discretion, or otherwise not in 
accordance with law.  G. L. c. 30A, § 14 (7)." 
 
Bay State Gas Co. v. Department of Pub. Utils., 459 Mass. 807, 
813-814 (2011), quoting DSCI Corp. v. Department of Telecomm. & 
Energy, 449 Mass. 597, 603 (2007). 
 
1.  Prudence versus reasonableness standard.  We first 
address the utilities' contention that the department erred as a 
matter of law in failing to apply the proper standard in its 
evaluation of each company's storm performances.  The utilities 
argue that the department should have applied the prudence 
standard; the department contends that it appropriately applied 
                                                          
 
8 General Laws c. 25, § 5, provides, in pertinent part, that 
"[a]n appeal as to matters of law from any final decision, order 
or ruling of the [department] may be taken to the supreme 
judicial court by an aggrieved party in interest." 
10 
 
the regulatory standard of whether the utility restored service 
to its customers "in a safe and reasonably prompt manner," which 
we shall characterize as a reasonableness standard. 
 
Under the prudence standard, "the department determines 
whether a utility's actions, based on all that it knew or should 
have known at the time, were reasonable and prudent in light of 
the circumstances which then existed."  Fitchburg Gas & Elec. 
Light Co. v. Department of Pub. Utils., 460 Mass. 800, 802-803 
(2011).  Although this sounds like a reasonableness standard, it 
differs from the reasonableness standard applied by the 
department in two fundamental ways. 
 
First, under the prudence standard, it is not "appropriate 
for the department merely to substitute its own judgment for the 
judgments made by the management of the utility."  Id. at 803.  
See Attorney Gen. v. Department of Pub. Utils., 390 Mass. 208, 
229 (1983) ("On the issue of prudence, the department had no 
authority to substitute its judgment for the reasonably 
exercised prerogatives of [the utility's] business managers").  
The reasonableness standard applied by the department does not 
grant such deference to the judgment of utility management. 
 
Second, a utility satisfies the prudence standard where it 
acts in conformance with "fair and prevailing utility practice."  
See Boston Gas Co. v. Department of Pub. Utils., 359 Mass. 292, 
301 (1971).  Under the reasonableness standard, a practice 
11 
 
followed by every utility may still be unreasonable where it 
fails adequately to restore service following a storm in a safe 
and reasonably prompt manner.  Cf. Restatement (Third) of Torts 
§ 13(a) (2010) (compliance with industry standards may be 
"evidence that the actor's conduct is not negligent but does not 
preclude a finding of negligence"). 
 
We agree with the department that it correctly applied the 
reasonableness standard.  The prudence standard is limited to 
rate setting, where utilities may "charge rates which are 
compensatory of the full cost incurred by efficient management, 
[but] may not recover costs which are excessive, unwarranted, or 
incurred in bad faith."  Fitchburg Gas & Elec. Light Co., 460 
Mass. at 802, quoting Boston Gas Co. v. Department of Pub. 
Utils., 387 Mass. 531, 539 (1982).  See Fitchburg Gas & Elec. 
Light Co., supra ("For supply costs to be recovered, the 
expenditures must have been reasonably and prudently incurred"); 
Hingham v. Department of Telecomm. & Energy, 433 Mass. 198, 202 
(2001); Boston Gas Co. v. Department of Pub. Utils., 367 Mass. 
92, 97 (1975) (noting "long accepted and often repeated 
principle that a regulated public utility . . . is entitled to 
charge rates which afford it the opportunity to meet its cost of 
service, including a fair and reasonable return on honestly and 
prudently invested capital"). 
12 
 
There are several reasons why prudence would be an 
inappropriate standard to evaluate a utility's storm 
performance.  First, the Legislature is familiar with the 
prudence standard and knows how to direct the department to 
apply it in the regulation of public utilities.  See, e.g., 
G. L. c. 164, § 94G (d) (rate recovery permitted where 
"department finds by clear and convincing evidence after a 
public hearing that [certain] increased expenditures were [not] 
incurred as a result of company imprudence").  General Laws 
c. 164, § 1J, makes no reference to the prudence standard. 
Nor is there any indication that the Legislature intended 
the department to apply such a standard with respect to the 
restoration of electricity service after an emergency event.  
The absence of any such indication is not surprising given that 
the act was adopted in the wake of the 2008 winter storm, where 
the utility's restoration performance had been deficient in 
several respects, and the Legislature's intent was to empower 
the department in the future to hold utility companies 
accountable for failing reasonably to restore power after 
outages arising from major storms.  When debating this 
legislation, members of the Legislature described the power 
outages following the 2008 winter storm as a "nightmare," and 
charged that Unitil was not prepared for the storm, performed 
poorly responding to the outages, and was not "accessible to its 
13 
 
customers and local officials."9  State House News Service (House 
Sess.), June 3, 2009.  According to Representative Robert Rice, 
the bill would "put[] a knife over the heads of the utilit[ies]" 
and "give[] [the department] the muscle and teeth that was 
previously lacking."  Id.  Representative Stephen DiNatale 
suggested that the "legislation [would] address . . . the 
glaring deficiencies" in the utility's performance.  Id.  And 
Representative Barry Finegold said it would "ensure if something 
like this happen[ed] again, [the department] [would] have to 
respond."  Id. 
Applying the prudence standard would run counter to the 
Legislature's purpose where it clearly intended that the 
department adopt and enforce its own standards of what 
constitutes reasonable storm performance, not the utility 
industry's standards.  The prudence standard would subordinate 
the department's own experience and expertise to the prevailing 
practices in the industry it is regulating, and require 
deference to the prerogatives of utility management.  That the 
                                                          
 
9 The department concluded that, among other performance 
deficiencies, Fitchburg Gas and Electric Light Company failed to 
complete a proper damage assessment in a timely manner, to 
acquire sufficient repair crews during the storm, or to 
communicate effectively with the public or local officials.  
Fitchburg Gas & Elec. Light Co., D.P.U. 09-01-A (2009) (Unitil).  
Accordingly, the department found that the company's poor 
performance in these areas "represent[ed] a failure to satisfy 
its obligation to provide safe and reliable electric service to 
its customers" and a failure to restore power "in an efficient, 
effective, and timely manner."  Id. at 72, 84, 102. 
14 
 
department, in establishing such standards, was informed by 
industry practice, historical practices, and the companies' ERPs 
does not suggest that it intended to apply a prudence, rather 
than a reasonableness, standard, especially where the department 
was also informed by its own considerable precedents in 
evaluating storm responses. 
 
Moreover, applying the prudence standard ignores the 
inherent differences between analyzing whether a company is 
eligible for rate-recovery and whether it restored power after 
an emergency event in a safe and reasonably prompt manner.  The 
first analysis determines whether ratepayers or shareholders 
will bear the burden of paying for certain investments and 
expenditures; the other determines whether a company fulfilled 
its obligation to consumers and the general public to restore 
service where a major storm or other event produces massive 
power outages.  Where a company during an emergency event must 
respond to priority "wires-down" calls or restore service to 
critical facilities, among other responsibilities, the 
consequences of any deficiency in the company's performance are 
potentially catastrophic.  In such a context, it was logical for 
the department to impose a higher standard on the utilities than 
simply determining whether, from a business perspective, the 
companies acted prudently. 
15 
 
The utilities also argue that the reasonableness standard 
used by the department is "vague" and "unascertainable," and 
that the Legislature could not have intended such a standard to 
be used by the department.10  Reasonableness is plainly a general 
standard, but it needs to be because storm performance 
evaluations are inherently fact-specific.  See Brookline v. 
Commissioner of the Dep't of Envt'l Quality Eng'g, 387 Mass. 
372, 378 (1982), quoting Boyce Motor Lines, Inc. v. United 
States, 342 U.S. 337, 340 (1952) ("the practical necessities of 
discharging the business of government inevitably limit the 
specificity with which [a regulatory agency] can spell out 
prohibitions").  The department's standards, however, do not 
arise in a vacuum; the department's prior storm performance 
evaluations help establish the standard for reasonable conduct 
in restoring power after an emergency event.  See, e.g., Unitil, 
D.P.U. 09-01-A (2009); Western Mass. Elec. Co., D.P.U. 95-86 
(1995); In re Hurricane Bob, D.P.U. 91-228 (1992); Eastern 
Edison Co., D.P.U. 85-232 (1986).  Several of these evaluations 
involved issues similar to the ones present here.  For example, 
in previous storm performance evaluations, the department has 
emphasized the importance of (1) acquiring additional damage 
assessors, crews, and other resources before a storm hits, see 
                                                          
 
10 The three utility companies (utilities) have not 
challenged the facial constitutionality of G. L. c. 164, § 1J, 
or 220 Code Mass. Regs. § 19.03(3) (2010). 
16 
 
Unitil, supra at 47, 69; In re Hurricane Bob, supra at 22; (2) 
performing a thorough damage assessment and providing estimated 
restoration times based in part on those assessments, see 
Unitil, supra at 68-72; Western Mass. Elec. Co., supra at 43; 
and (3) communicating effectively with local officials and the 
general public, among other restoration responsibilities.  See 
Unitil, supra at 9-17; Eastern Edison Co., supra at 16-22. 
 
In summary, the Legislature intended to enable the 
department to hold public utilities accountable for their storm 
performance, a purpose that would have been frustrated had the 
department's standard of care been defined entirely by industry 
practice or a company's ERP rather than by the department 
itself.  Consequently, the department did not make an error of 
law in applying the reasonableness standard to determine whether 
the utilities restored power in a safe and reasonably prompt 
manner. 
2.  Substantial evidence.  The utilities also argue that 
the department's findings were not supported by substantial 
evidence.  Substantial evidence is "such evidence as a 
reasonable mind might accept as adequate to support a 
conclusion."  Boston Gas Co. v. Assessors of Boston, 458 Mass. 
715, 721 (2011), quoting Tennessee Gas Pipeline Co. v. Assessors 
of Agawam, 428 Mass. 261, 262 (1998).  Our consideration of the 
substantiality of the evidence is not limited to the evidence 
17 
 
relied on by the department; it also "must take into account 
whatever in the record fairly detracts from its weight."  Boston 
Gas Co., supra, quoting New Boston Garden Corp. v. Assessors of 
Boston, 383 Mass. 456, 466 (1981).  Nevertheless, "[w]here there 
is substantial evidence to support the [department's] decision, 
we defer to the [department's] judgment as to what evidence to 
accept," Boston Gas Co., supra, quoting General Elec. Co. v. 
Assessors of Lynn, 393 Mass. 591, 608 (1984), and give "due 
weight to the experience, technical competence, and specialized 
knowledge of the [department], as well as to the discretionary 
authority conferred upon it."  G. L. c. 30A, § 14 (7) (g).  But, 
"if 'the evidence points to no felt or appreciable probability 
of the conclusion or points to an overwhelming probability of 
the contrary,'" we will set aside the department's finding.  
Boston Gas Co., supra at 721-722, quoting Tennessee Gas Pipeline 
Co., supra. 
a.  National Grid.  The department found National Grid's 
storm performances to be substandard in six areas:  (1) 
acquisition and deployment of company resources; (2) damage 
assessment; (3) response to priority wires-down calls; (4) 
performance of the outage management system; (5) communication 
with public officials; and (6) communication with the general 
18 
 
public.11  We address whether there was substantial evidence to 
support each finding in turn. 
i.  Acquisition and deployment of company resources.  With 
respect to the acquisition and deployment of personnel during 
Irene, the department found that National Grid failed to secure 
the number of crews it anticipated needing in its ERP for a 
level IV or V emergency event.  When Irene threatened the 
region, National Grid prepared for a level V event, and Irene 
turned out to be one, causing over 478,000 customer outages.12   
National Grid's ERP anticipated that, in a level IV or V event, 
it would need all internal line crews, 500 or more contractor or 
foreign utility overhead line crews, and 500 or more tree crews.  
On August 28, the beginning of the restoration period, National 
Grid had secured only 233 contractor line crews and 286 tree 
crews, far fewer than the minimum it needed.  Although National 
Grid had made a request on August 26 for 200 additional 
                                                          
 
11 The department concluded that the storm performance of 
Massachusetts Electric Company and Nantucket Electric Company, 
each doing business as National Grid (collectively, National 
Grid), was reasonable with respect to several other categories, 
including (1) weather forecasting and event classification; (2) 
communication with life support customers; (3) advance planning 
and training; (4) vegetation management; and (5) reporting. 
 
12 With a level V event classification, National Grid 
expected customer outages of 113,700 or more, which could extend 
to all 1.2 million customers in its service territory. 
19 
 
distribution line crews through the mutual aid process,13 it 
ultimately secured only thirty-seven line crews through this 
process, and those crews did not arrive until September 2, when 
the restoration process was already well underway. 
National Grid classified the October snowstorm as a level 
III event on October 28, then a level IV event on October 29, 
and finally a level V event on October 30.14  But when the storm 
ended on October 30, it had mobilized fewer contractor line 
crews –- thirty-two -– than the sixty its ERP anticipated would 
be needed for a level III event.  By that date, it had also 
mobilized 232 tree crews, more than the sixty for a level III 
event, but fewer than the 500 needed for a level V event.  It 
eventually mobilized more than the number of contractor line 
crews and nearly the number of tree crews required by its ERP 
during the October snowstorm, but not until late in the 
restoration process. 
The department recognized that the crew numbers in the ERP 
were not mandatory but were "an indication of the numbers of 
crews that should be obtained as part of a reasonable response 
effort and a deviation from these numbers requires 
                                                          
 
13 The mutual aid process facilitates the sharing of crews 
and resources among participating utility companies. 
 
14 The department found these classifications to be 
reasonable "in the face of the rapidly escalating weather 
forecasts." 
20 
 
justification."  For both Irene and the October snowstorm, the 
department found that National Grid did not provide an adequate 
justification for its failure to secure the necessary additional 
crews earlier in the restoration process. 
National Grid argued that the crew allocation estimates in 
its ERP were "subject to market availability," and that, despite 
its best efforts, additional crews were not available due to the 
"broad geographic impact" of Irene and the severity of the 
October snowstorm.  The department acknowledged that “the 
[c]ompany attempted to secure more resources from the mutual aid 
process and from contractors before the storm hit."  But the 
department concluded that National Grid had not moved early 
enough to acquire the necessary crews, and that it was 
unreasonable for the company to "expect that mutual aid crews 
[would] arrive at the beginning of the restoration effort rather 
than towards the end." 
 
The department also found that those crews the company did 
acquire were not deployed or redeployed in a reasonable manner.  
For example, the department found that during Irene the company 
deployed crews to the North Shore district while removing crews 
from the Southeast district even though the ratio of crews to 
outages was far greater in the latter than the former at that 
time.  National Grid argues that the ratio of deployed crews to 
outages is a "contrived metric" in that it does not account for 
21 
 
other factors that influence the deployment of company 
resources, including the need to address priority wires-down 
calls.  Because the Legislature delegated the authority to adopt 
performance standards to the department, we defer to its 
expertise regarding whether the ratio of outages to crews is a 
relevant storm performance metric.  See Bay State Gas Co. v. 
Department of Pub. Utils., 459 Mass. 807, 813-814 (2011), 
quoting DSCI Corp. v. Department of Telecomm. & Energy, 449 
Mass. 597, 603 (2007) ("we give deference to the department's 
expertise and experience in areas where the Legislature has 
delegated to it decision-making authority").  We conclude that 
there was substantial evidence to support the department's 
finding that National Grid's acquisition and deployment of crews 
was unreasonable during both storm events.15 
 
ii.  Damage assessment.  The department also found that 
National Grid failed to conduct an effective damage assessment 
following both storms.  Both the company's ERP and the 
department's ERP guidelines require that phase I surveys -– 
which assess the functioning of a company's main power lines -– 
be completed within twenty-four hours of an emergency event, and 
that phase II surveys, which involve more localized analysis of 
outages in specific residential neighborhoods, be completed 
                                                          
 
15 We address later in the opinion whether there was 
substantial evidence to warrant penalties on each of the days 
for which penalties were assessed. 
22 
 
within forty-eight hours.  The department found that after 
Irene, National Grid took at least two days to complete its 
phase I damage assessments, and did not even begin phase II 
assessments until after the restoration period was already 
forty-eight hours old.  Following the October snowstorm, 
National Grid completed phase I assessments within thirty-six 
hours, but failed to complete its phase II assessments.  The 
department determined that National Grid's deviations from its 
ERP and the department's guidelines were unjustified.  In fact, 
the department found that National Grid failed to "pre-position" 
damage assessors, reassigned some damage assessors to perform 
other restoration functions, and used a damage assessment 
procedure that was manually intensive and inefficient. 
 
National Grid argued that it was only required to begin, 
not complete, its damage assessments within the applicable 
twenty-four and forty-eight hour time periods.  The department 
rejected this argument, stating that "[t]he language in both the 
ERP [g]uidelines and the [c]ompany's ERP indicates that the 
[p]hase I and [p]hase II Surveys for damage assessment are 
expected to be completed within the [twenty-four]- and [forty-
eight]-hour timeframes."  Having examined the language in both 
the ERP guidelines and the company's ERP, and giving due 
deference to the department's interpretation of that language, 
we agree that a damage assessment was required to be completed, 
23 
 
not merely commenced, within those time frames.  Therefore, we 
conclude that there was substantial evidence to support the 
department's finding that National Grid's delay in conducting 
damage assessments violated its obligation to act reasonably to 
restore service after an emergency event.16 
iii.  Response to priority wires-down calls.  Utility 
companies receive reports of downed wires from customers as well 
as municipal and public safety officials.  The latter reports 
are given priority, and officials are trained to categorize them 
based on the seriousness of the situation.  A priority one call 
means the reporting official has classified the situation as 
"life threatening" or a source of "imminent danger."  A priority 
two call occurs where a downed wire is impeding emergency 
operations, and a priority three call means the downed wire 
poses a nonthreatening electrical hazard.  In an emergency 
event, the company deploys the next available crew or nearest 
trained resource to respond to a priority one call and the 
company provides the crew's estimated time of arrival (ETA) to 
the reporting official.  Priority two and three calls are logged 
in the company's outage management system (OMS), which 
prioritizes the calls, assigns a crew to respond to the 
situation, and provides the official with an ETA. 
                                                          
 
16 We address later in the opinion whether there was 
substantial evidence to warrant penalties on each of the days 
for which penalties were assessed. 
24 
 
The department found that National Grid took an average of 
22.6 hours to dispatch crews to address priority wires-down 
calls during Irene; during the snowstorm, that average jumped to 
forty-six hours.17  National Grid disputes these figures.  It 
argues that the department's calculations are not based on when 
the first wires-down personnel arrived on the scene, but on the 
arrival of the last crew, because the company's OMS overrode 
data on when company personnel first responded to a wires-down 
event with the time a later crew arrived.  Therefore, where the 
company sent personnel to relieve emergency personnel from 
guarding a potentially live wire, and a repair crew arrived 
hours later to remedy the situation, the OMS would reflect the 
time of arrival of the repair crew, not the relief crew, thereby 
erroneously inflating the company's response times. 
We agree with the department's rejection of National Grid's 
argument that the department cannot rely on the company's data 
regarding the initial response time for priority calls because 
the company failed to preserve the initial response time in its 
OMS, thereby rendering its data unreliable.  The department was 
well warranted in noting that the company's "inability to 
provide reliable evidence . . . raises questions as to the 
                                                          
 
17 National Grid did not provide the priority level for 
thirty-nine per cent of the priority calls during Tropical Storm 
Irene (Irene), and for thirty-seven per cent of the priority 
calls during the October 29, 2011, snowstorm (October 
snowstorm). 
25 
 
[c]ompany's entire wires-down process."  The department found 
that, during Irene, "the [c]ompany's files were missing both 
dispatch and arrival times for nearly 8,700 wires-down calls," 
and "the [c]ompany was unable to provide any records of ETA 
callbacks for [eighty-six] percent of the 1,148 priority wires-
down calls."  During the October snowstorm, the company "did not 
provide records of ETAs for approximately [eighty-eight] percent 
of priority wires-down calls." 
Where National Grid's own data demonstrates unreasonably 
slow response times to priority wires-down calls, and where the 
company's defense to its delay is that the data it kept on 
response times was unreliable, we conclude that there was 
substantial evidence to support the department's finding that 
the company's wires-down response was unreasonable. 
iv.  Performance of OMS.  The department found that 
National Grid's OMS "did not effectively process and manage 
outage information" during Irene, that its performance improved 
only incrementally during the October snowstorm, and that its 
subpar performance during these storms contributed to the 
company's failure to restore service in a safe and reasonable 
manner.  Beginning at 10 A.M. on August 28, the day Irene 
reached Massachusetts, "[t]he [c]ompany acknowledged 15.5 hours 
of slowness that users experienced," a slowdown caused by the 
inability of the call analyzer to process calls at the rate it 
26 
 
received them.  To remedy this problem, the Company needed to 
take OMS offline for approximately thirty minutes, during which 
no user was able to access the system.  Because the OMS operated 
so slowly, National Grid had to track calls and orders manually.  
In short, National Grid had an OMS that had not been "volume 
tested in advance," and proved to be unable to manage the number 
of calls that foreseeably would be received during a Level V 
emergency storm.  The OMS performed better during the October 
snowstorm because of processing power and Web servers that were 
added after Irene, but users still experienced several periods 
of slow operation arising from call and work order volumes, 
which required the company to resort to manual tracking.  In 
addition, there were periods during the snowstorm in which the 
system was not updating and "[c]ould not create, close, or 
assign new orders to reflect work assignments." 
The company contends that the OMS slowdown did not delay 
its restoration efforts and that there is no evidence to support 
the department's assertion that its failures in this regard had 
a "cascading effect . . . on the remaining restoration phases."  
Where OMS receives outage information reported by customers and 
uses that information to guide its restoration efforts and crew 
deployment, and to generate estimated times of restoration 
(ETRs), we conclude that it was reasonable for the department to 
infer that the system's slowdown (and the company's need at 
27 
 
times to process the information manually) unreasonably hindered 
its restoration efforts.18 
v.  Communication with public officials and the general 
public.19  The department found that National Grid failed 
effectively to communicate with public officials in the 
municipalities it served.  Municipal officials from various 
cities and towns complained that during Irene, National Grid 
provided them with information that was vague, untimely, and 
sometimes inaccurate, and often failed to respond to information 
these officials had provided to the company.  The poor 
communication impeded their ability to focus emergency 
management efforts in their communities during the tropical 
storm.  National Grid's communication issues continued during 
the October snowstorm, with local officials in various 
municipalities reporting difficulty coordinating with National 
Grid and obtaining credible and honest information.  Local 
officials in numerous towns complained that they received 
inaccurate and untimely ETRs from National Grid, and that the 
                                                          
 
18 The department also found, and the company acknowledged, 
that the outage management system was incapable of detecting 
nested outages, which occur when smaller outages are imbedded in 
larger ones, meaning that a pocket of outages persists even 
after larger outages are repaired.  Had National Grid addressed 
this functionality issue earlier, it would have been able to 
provide more accurate restoration information to its customers. 
 
19 Although the department found these to be separate 
violations, we combine them for purposes of our analysis. 
28 
 
company identified nursing homes, sewage treatment plants, and 
other key municipal facilities as "critical facilities" in its 
ERP but failed to make them restoration priorities.20  
Specifically, the company failed to communicate with local 
officials regarding the restoration of power at nonhospital 
critical facilities even after town officials had asked National 
Grid to do so. 
Further, during Irene the company was forced to shut down 
its outage and accident reporting notification protocol system 
(ORP), a subset of the OMS dedicated to informing municipalities 
about major service interruptions, because municipalities 
complained that the notices the company transmitted by facsimile 
were unhelpful and overwhelming.  During the October snowstorm, 
the company had the opposite problem as the ORP did not provide 
notices for 239 qualifying events. 
In addition, the department found that National Grid 
provided municipal liaisons to only forty-one of the 170 
communities impacted by Irene; during the October snowstorm, 
                                                          
 
20 National Grid’s ERP –- consistent with the department's 
guidelines -- defined critical facilities as:  "A location or 
facility where the loss of electrical service would interrupt 
vital services to the public."  National Grid uses a tiered 
categorization system to determine restoration priority.  
Hospitals and other critical care facilities comprise the first 
tier.  The second tier consists of fire, police, water, and 
sewer departments; nursing homes; and some schools that may be 
used as shelters.  Tier three includes some schools, housing 
authorities, and telephone and cable providers, among others. 
29 
 
that number jumped to ninety-three out of 158 affected 
communities.  Although the company's ERP did not require it to 
provide a municipal liaison to every impacted community, 
National Grid acknowledged the benefit of municipal liaisons, 
and the department could properly consider the company's failure 
to provide more of them as indicative of a lack of effective 
communication. Even in localities where there were liaisons, 
communication still suffered because many liaisons did not know 
enough about the locality's municipal government and its 
electric system to be helpful. 
 
National Grid's communication failures extended to its 
dealings with the general public, particularly regarding its 
provision of ETRs.  During Irene, the department found that 
National Grid’s ETRs were inaccurate, in part because the 
company appeared to rely on global ETRs covering a large area 
rather than local ETRs focused on specific communities.  
National Grid acknowledged that, during the October snowstorm, 
the initial ETR it provided to "many customers" was not 
accurate, and that it failed to update the ETRs until after that 
estimated time "had come and gone." 
 
National Grid argues that the department improperly based 
its findings regarding communication failures on complaints made 
by municipal officials and members of the public that were 
inherently subjective and unreliable.  The company suggests that 
30 
 
these individuals were not unhappy with the messenger but with 
the message, because "not everyone accepted the enormity of the 
storm and the fact that the sheer volume of damage required a 
reasonable amount of time to restore power for everyone."  But 
there is no evidence to suggest the department afforded improper 
weight to the complaints lodged by municipal officials or 
members of the public, or that the complaints were consistently 
unreliable.  Moreover, the complaints were not the only source 
of information the department considered in finding that 
National Grid violated its duty to communicate effectively with 
municipalities and the public.  The company's inadequate 
provision of municipal liaisons and the liaisons' lack of 
familiarity with the locality, the poor performance of its ORP 
notification system, and its practice of updating ETRs only 
after they had not been met were just some of the other 
deficiencies the department relied on in concluding that 
National Grid violated its communication duties.  We conclude 
that there was substantial evidence to support the department's 
findings regarding the inadequacy of National Grid's 
communication with public officials and the public, and its 
contribution to the company's failure to restore service in a 
safe and reasonable manner. 
b.  NSTAR.  The department determined that NSTAR failed to 
restore service in a safe and reasonably prompt manner in three 
31 
 
respects:  (1) response to priority two and three wires-down 
calls; (2) communication with municipal officials; and (3) 
communication with the general public.21 
i.  Response to priority two and three wires-down calls.  
The department found that, with respect to priority one calls, 
NSTAR's response was "reasonable and timely" during both Irene 
and the October snowstorm.22  But it also found that, with 
respect to all other priority calls, the company's response 
times "were often too long" and did "not reflect the urgency 
such calls require[d]."  NSTAR responded to eighty per cent of 
priority two calls and seventy-five per cent of priority three 
calls within twenty-four hours during Irene, and to ninety-four 
per cent of priority two calls and ninety-one per cent of 
                                                          
 
21 The department found that the performance of NSTAR 
Electric Company (NSTAR) was either reasonable, or that the 
evidence was insufficient to establish it was unreasonable, with 
respect to the majority of areas in which it was evaluated, 
including (1) weather forecasting and event classification; (2) 
acquisition of resources; (3) damage assessment; (4) outage 
management system performance and use of technology; (5) 
communication with State officials; (6) communication with life 
support customers; (7) advance planning and training; (8) 
vegetation management; (9) distribution automation; and (10) 
reporting. 
 
22 The department found that, during Irene, NSTAR responded 
to all priority one calls that it considered life-threatening 
within two hours and ninety per cent of priority one calls, 
including those that were misclassified, within twenty-four 
hours.  During the October snowstorm, NSTAR responded to all 
priority one calls that it considered life-threatening within 
two hours, and one hundred per cent of priority one calls, 
including those that were misclassified, within twenty-four 
hours. 
32 
 
priority three calls within twenty-four hours during the October 
snowstorm.  Nevertheless, the department found that, in some 
instances, the time NSTAR took to respond to priority two calls 
(up to seventy-four hours for Irene and up to sixty-five hours 
for the October snowstorm) "suggests" that it violated a 
requirement in its ERP that it respond to priority two calls 
with the next available trained resource. 
The record, however, does not support that suggestion, 
because NSTAR's ERP provided that it would respond only to 
priority one calls with the next available trained resource; it 
did not commit in a level V event to provide the next available 
trained resource on a priority two or three call.23  The 
department noted that fire or police personnel needed to stand 
by downed wires during all priority events until the company 
responded, and found that such personnel sometimes waited for 
more than twenty-four hours during each storm for the company to 
respond to priority two and three calls.  But it rejected the 
argument that twenty-four hours is the outside limit for a 
reasonable response time to all priority two and three calls, 
and that any priority wires-down response over twenty-four hours 
violates the company's obligation to restore power in a safe and 
                                                          
 
23 In a level V event, NSTAR's ERP provides that the company 
will respond to priority two and three calls based on a process 
that accounts for the particular circumstances and threat to 
public safety of each case and will prioritize the calls 
accordingly. 
33 
 
reasonably prompt manner.  Where the department found that NSTAR 
had timely responded to priority one calls and had responded to 
the vast majority of priority two and three calls in less than 
twenty-four hours, where there was no commitment in the ERP to 
provide the next available resource to priority two and three 
calls, and where the department recognized that a response 
longer than twenty-four hours may be reasonable during a level V 
event, we conclude that reliance on a few outlying response 
times does not constitute substantial evidence supporting the 
department's finding that "NSTAR failed to respond to [priority] 
wires-down calls in a timely manner." 
The department also found that NSTAR "failed to communicate 
effectively with municipal officials regarding [priority] 
calls," and that this failure "compromised public safety."  This 
particular finding regarding priority calls was supported by 
substantial evidence.  Based on the testimony of municipal 
officials, the department found that the company at times failed 
to coordinate its priority wires-down response with 
municipalities, and failed to provide estimates to local 
officials regarding when company personnel would arrive on the 
scene and relieve municipal personnel.  Several municipal 
officials testified to the difficulty they had in obtaining 
arrival time estimates from NSTAR despite specific requests for 
them, and that fire fighters and police officers spent long 
34 
 
periods of time guarding downed wires while waiting for company 
personnel to arrive. 
The department assessed a penalty of $2 million against 
NSTAR regarding its response to priority calls:  $250,000 per 
day for each of the four days it took to respond to priority 
wires-down calls for Irene, and for each of the four days it 
took to respond to priority calls for the October snowstorm.  
Where we conclude that only one of the department's two key 
findings regarding the response to priority calls –- the 
company’s failure to effectively coordinate with and communicate 
response times to municipal officials -- was supported by 
substantial evidence, we vacate these penalties and remand to 
the department for the imposition of penalties that reflect the 
more limited scope of its factually supported findings on this 
subject. 
ii.  Communication with municipal officials.  The 
department found that NSTAR's "communication with municipal 
officials was at times ineffective, resulting in inaccurate or 
incomplete information being disseminated," and that the 
ineffective communication had "a negative impact on the 
restoration efforts."  The department heard testimony and 
received letters from numerous municipal officials asserting 
that they could not reach the company, and when they did, they 
sometimes received no information or inaccurate information.  
35 
 
Many municipal officials were often unable to obtain ETRs, and 
when they did, the ETRs either changed or were inaccurate. 
NSTAR contends that the department improperly relied on 
written and oral complaints from municipal officials that were 
not subject to cross-examination.  We disagree.  In an 
adjudicatory proceeding under G. L. c. 30A, an agency "need not 
observe the rules of evidence observed by courts."  G. L. 
c. 30A, § 11 (2).  See 220 Code Mass. Regs. 1.01(3) (2008) 
("Adjudicatory Proceeding shall be as defined in [G. L.] c. 30A, 
§ 1 [1]").  But, under the department's regulations, it "shall 
follow the rules of evidence observed by courts when 
practicable" (emphasis added).  220 Code Mass. Regs. 1.10(1) 
(2008).  The department is entitled to deem it impracticable to 
observe the rules of evidence where it conducts public hearings 
as part of its investigation, and where it considers letters 
submitted to the department, provided such letters are made part 
of the record in the proceeding.  220 Code Mass. Regs. 1.10(3) 
(2008) ("Any matter contained in any records, investigations, 
reports, and documents in the possession of the [d]epartment of 
which a party or the [d]epartment desires to avail itself as 
evidence in making a decision, shall be offered and made a part 
of the record in the proceeding").  Therefore, not all 
complaints about a utility's performance in the record need be 
subject to cross-examination.  The department's regulations also 
36 
 
provide that "[a]ll unsworn statements appearing in the record 
shall not be considered as evidence on which a decision may be 
based."  220 Code Mass. Regs. 1.10(1).  Even though the 
department referred to unsworn statements in its orders, it is 
clear from the other evidence in the record that its decisions 
did not rest on unsworn statements.24 
NSTAR also contends that, with respect to the testimony of 
three municipal officials who were cross-examined, the 
department did not consider testimony elicited during that 
cross-examination, as evidenced by its omission from the 
department's 147-page decision.  We are not persuaded.  The 
department is not obliged to reference every part of every 
witness's testimony in its final decision, and did acknowledge 
the company's arguments regarding the credibility of such 
testimony.  Accordingly, we conclude that the department's 
finding was supported by substantial evidence. 
iii.  Communication with the general public.  The 
department found that many customers complained that they were 
unable to reach NSTAR, unable to obtain outage and restoration 
information, and unable to obtain ETRs.  It also found that, 
during the October snowstorm, NSTAR erroneously notified 
                                                          
 
24 Those who offered comments at public hearings were asked 
to swear an oath before they testified.  Commenters were 
informed that they were not required to take the oath, but that 
the department could only base its decisions on sworn testimony. 
37 
 
customers that their service had been restored.  We conclude 
that there was substantial evidence to support the department's 
finding that NSTAR "failed to communicate effectively with 
customers" during both storm events. 
c.  WMEC.  The department assessed WMEC's performance in 
thirteen different categories and found it to be unreasonable in 
only one -- responding to priority wires-down calls during the 
October snowstorm.  Specifically, the department found WMEC took 
an average of twenty-two hours to respond to priority one calls, 
35.4 hours for priority two calls, and 41.8 hours for priority 
three calls, and that these average response times were 
"unreasonably long."25  The department also highlighted several 
particularly egregious examples of WMEC's failure to respond to 
dangerous wires-down situations in a timely manner, including 
one priority call reporting that a power line had melted through 
a sidewalk and posed a danger of setting fire to a nearby 
                                                          
 
25 Like National Grid, Western Massachusetts Electric 
Company (WMEC) argued that the department's response time 
calculations incorrectly measured when a downed wire was 
permanently repaired, not the initial arrival of standby guards 
or a field crew making temporary repairs, and included priority 
calls that had been misclassified by the reporting official.  
But as the department noted, WMEC "did not track most data 
related to wires-down calls," nor did the data demonstrate how 
many of the priority wires-down calls "had fire or police 
personnel guarding the wire, or when the fire and police were 
relieved."  Accordingly, as was the case with National Grid, any 
deficiencies in the data regarding response times arose from 
WMEC's failure to maintain accurate arrival and classification 
data in wires-down calls. 
38 
 
apartment building, to which WMEC took a full day to respond, 
and another priority call where a power line had fallen on a 
motor vehicle and, despite assurances from WMEC that a crew was 
on its way, the company never responded.  The department 
concluded that WMEC's "unreasonably long response times" for 
resolving priority calls raised "significant public safety 
concerns," and did not comply with the standard to restore 
service in a safe and reasonably prompt manner.  We conclude 
that the department's finding was supported by substantial 
evidence. 
3.  Penalties.  For the violations discussed above, the 
department fined National Grid $18.725 million,26 NSTAR $4.075 
                                                          
 
26 The breakdown of the penalties imposed against National 
Grid was as follows: (1) crew acquisition and deployment -- 
$250,000 per day for six days ($1.5 million) for Irene, and 
$250,000 per day for eight days ($2 million) for the October 
snowstorm; (2) damage assessment -- $200,000 per day for six 
days ($1.2 million) for Irene, and $200,000 per day for eight 
days ($1.6 million) for the snowstorm; (3) priority wires-down 
response -- $250,000 per day for six days ($1.5 million) for 
Irene, and $250,000 per day for eight days ($2 million) for the 
snowstorm; (4) outage management system performance -- $250,000 
per day for six days ($1.5 million) for Irene, and $200,000 per 
day for eight days ($1.6 million) for the snowstorm; (5) 
communications with public officials -- $250,000 per day for 
seven days ($1.75 million) for Irene, and $225,000 per day for 
nine days ($2.025 million) for the snowstorm; and (6) 
communications with customers -- $100,00 per day for seven days 
($700,000) for Irene, and $150,000 per day for nine days ($1.35 
million) for the snowstorm. 
 
39 
 
million,27 and WMEC $2 million.28  The utilities challenge these 
penalties on the grounds that the department did not discuss the 
penalty factors set forth in 220 Code Mass. Regs. § 19.05(2) 
(2010), and did not adequately explain the amount or duration of 
the penalties it imposed. 
Where an administrative agency imposes a penalty it is 
authorized to enforce, "neither a trial court nor an appellate 
court is free to substitute its own discretion as to the matter; 
nor can the reviewing court interfere with the imposition of a 
penalty by an administrative tribunal because in the court's own 
evaluation of the circumstances the penalty appears to be too 
harsh."  Vaspourakan, Ltd. v. Alcoholic Beverages Control 
Comm'n, 401 Mass. 347, 355 (1987), quoting Levy v. Board of 
Registration & Discipline in Med., 378 Mass. 519, 529 (1979).  
We "will interfere with the agency's discretion in this area 
'only . . . in the most extraordinary of circumstances.'"  
Vaspourakan, supra, quoting Levy, supra at 528-529. 
                                                          
 
27 The breakdown of the penalties imposed against NSTAR was 
as follows:  (1) priority wires-down response -- $250,000 per 
day for four days each for Irene and the October snowstorm ($2 
million); (2) communications with public officials -- $150,000 
per day for six days ($900,000) for Irene, and $100,000 per day 
for five days ($500,000) for the snowstorm; and (3) 
communications with customers -- $50,000 per day for six days 
($300,000) for Irene, and $75,000 per day for five days 
($375,000) for the snowstorm. 
 
28 For its priority wires-down response, WMEC was fined 
$250,000 per day for eight days ($2 million). 
40 
 
The Legislature afforded the department broad discretion 
regarding the amount of any penalty imposed on a utility company 
for violating its storm performance standards, provided the 
penalty did not exceed $250,000 per violation per day, or $20 
million for all related violations.  G. L. c. 164, § 1J.  In 
imposing such penalties, the department considers, among other 
factors:  (a) the gravity of the violation; (b) the 
appropriateness of the penalty to the size of the company; (c) 
the company's good faith in attempting to comply with the 
department's standards; and (d) the degree of control that the 
company had over the circumstances that led to the violation.  
220 Code Mass. Regs. § 19.05 (2). 
As an initial matter, although its orders must be detailed 
enough to permit meaningful judicial review, Costello v. 
Department of Pub. Utils., 391 Mass. 527, 538 (1984), the 
department is not required specifically to discuss the penalty 
factors in its order so long as the order demonstrates the 
department has duly considered them.  Here, there is ample 
evidence that the department did so. 
The department repeatedly framed its discussion of the 
violations both in terms of their importance to public health 
and safety and the extent of a utility's violations.  With 
respect to a company's size, the department noted each company's 
number of customers and communities served, and the record 
41 
 
reflected the amount of money each utility spent on storm 
restoration, among other expenditures, as well as the number of 
people each company employed, in order to place the amount of 
the penalty imposed within the context of the company's over-all 
size.  For example, the penalty imposed on National Grid 
represented less than sixteen per cent of what the company spent 
on storm restoration, and was roughly nine times the salary of 
the company's highest paid executive. 
As to a utility's good faith, the department recognized the 
size and severity of both storms, and the significant challenges 
the storms presented, including the large number of downed wires 
and the damage to company equipment and systems.  See, e.g., 
Western Mass. Elec. Co., D.P.U. 11-119-C, at 70 (2012) (noting 
company received more wires-down calls during first day of 
snowstorm than it had received over previous twelve months).  In 
each order, the department balanced those considerations against 
the nature and extent of the violations.  See, e.g., NSTAR Elec. 
Co., D.P.U. 11-85-B/11-119-B, at 119 (2012) (imposing $100,000 
penalty per day –- $150,000 less than daily maximum –- for 
communication failures during October snowstorm in light of 
company's efforts to improve communications after problems 
experienced during Irene). 
Finally, the department's discussion regarding a company's 
violations focused on the company's degree of control over the 
42 
 
violation.  For example, the department noted that National 
Grid's ineffective damage assessment was based on choices made 
by company management, and that, even though the company knew 
its OMS could not detect nested outages prior to Irene, it 
declined to modify or upgrade the system before either storm. 
 
Accordingly, although the department did not individually 
discuss each of the factors set forth in 220 Code Mass. Regs. 
§ 19.05(2), in the penalty sections of its orders, it did 
consider the factors in imposing the penalties.  We therefore 
decline to disrupt the amount of the penalties imposed on this 
basis. 
We now turn to the utilities' second argument:  that in 
imposing penalties each day until power was fully restored in 
their respective areas, the department simply assumed that 
violations had occurred on those days rather than identifying 
specific violations that had occurred on each day for which the 
utilities were penalized. 
In reviewing whether the violations at issue here were 
supported by substantial evidence, we must consider not just 
whether a departmental standard was violated, but also how long 
the violation occurred.  G. L. c. 164, § 1J ("department shall 
levy a penalty . . . for each violation for each day that the 
violation of the department's standards persists").  The 
department need not make detailed findings as to each day on 
43 
 
which a violation occurred so long as there is substantial 
evidence a violation persisted for the duration of the period 
for which a penalty was imposed.  See Costello, 391 Mass. at 538 
("Although an agency must make all findings necessary to its 
decision [G. L. c. 30A, § 11 (8)], it need not make detailed 
findings of all evidence presented to it, as long as its 
findings are sufficiently specific to allow us to review the 
department's decisions"). 
For the penalties imposed against NSTAR and WMEC, and most 
of those imposed against National Grid, the evidence was 
sufficient to support a finding that the applicable violations 
persisted for the duration of the time period for which they 
were imposed.  There are a few instances, however, in which the 
department's findings that a violation continued for a certain 
period of time fall short.  We discuss those violations below, 
and overturn the portion of the penalties for those violations 
where the evidence was insufficient for us to infer that a 
violation persisted for the duration of the penalty period. 
With respect to National Grid's acquisition and deployment 
of resources, the evidence was sufficient to support the 
department's findings for Irene, for which National Grid never 
acquired the number of crews set forth in its ERP and did not 
justify its deviation from those figures.  During the last two 
days of the restoration period of the October snowstorm, 
44 
 
however, the company had acquired more crews than provided for 
in its ERP.  Although a company's ERP establishes only its 
baseline storm performance obligations -- such that a company 
may be in compliance with its ERP but still violate the 
department's standards -- the department must offer at least 
some evidence to suggest a particular violation occurred where 
the company has otherwise complied with the applicable section 
of its ERP, especially where it relied on the shortfall from the 
ERP crew number in earlier finding a violation.  Nor are we 
aware of any evidence in the record demonstrating that those 
crews were deployed in an unreasonable manner during the last 
two days of the restoration period.29  Accordingly, we conclude, 
with respect to the last two days of the snowstorm restoration 
period, that the department's finding that National Grid 
violated its duty to acquire sufficient resources and deploy 
them efficiently was not supported by substantial evidence, and 
we vacate the penalties -- $250,000 per day -- imposed for those 
two days. 
                                                          
 
29 The department did find that the company failed to "use[] 
an efficient restoration process in terms of . . . distributing 
its crews/resources . . . throughout the event."  But the 
specific examples highlighted in the order where the company 
made questionable decisions regarding resource allocation did 
not occur during the last two days of the restoration period.  
Furthermore, the data relied on by the department in assessing 
the efficiency of its crew deployment does not support an 
inference that the company's performance in that regard was 
unreasonable during the last two days of the restoration period. 
45 
 
The department's findings regarding National Grid's damage 
assessment performance were similarly inadequate to support 
imposing a penalty for the duration of Irene.  The department 
found the company's damage assessment to be deficient because 
its phase I and phase II assessments were not completed within 
the twenty-four and forty-eight hour periods, respectively, 
required by National Grid's ERP and the department's ERP 
guidelines.  Specifically, National Grid began its phase I 
survey on August 28 -- the first day of the restoration period -
- and completed it on August 30; its phase II survey did not 
commence until August 30 and was completed on August 31.  But 
the department fined National Grid $200,000 per day for six days 
for its poor damage assessment during that storm, and not just 
for the four days (August 28 to August 31) between the beginning 
and end of the company's damage assessment.  The department 
could not continue to penalize National Grid for its damage 
assessment performance after the assessments were completed 
absent evidence the company's performance in this area continued 
to be deficient.  Because National Grid completed its damage 
assessment on the fourth day of the restoration period, and 
because the department cited no evidence that a violation 
persisted beyond that day, we conclude that there was not 
substantial evidence that this violation of the department's 
standards persisted during the last two days of the Irene 
46 
 
restoration period.  Those penalties -- $200,000 per day for two 
days -- must be vacated. 
 
Conclusion.  For the reasons stated above, we remand the 
cases to the single justice for entry of the following orders.  
The department's order regarding National Grid is affirmed, but 
the penalty imposed is reduced by $900,000 to $17.825 million.  
With respect to NSTAR, the department's order is affirmed to the 
extent it imposed penalties totaling $2.075 million for NSTAR's 
unreasonable conduct in communicating with municipal officials 
and the general public.  Given our conclusion that the 
department's finding that NSTAR failed timely to respond to 
priority two and three wires-down calls was not supported by 
substantial evidence, this finding is reversed and the $2 
million in penalties that were based in part on this 
unsubstantiated finding is vacated.  The case is remanded to the 
department for the imposition of penalties that reflects the 
more limited scope of its factually supported findings on this 
subject.  The department's order regarding WMEC is affirmed. 
 
 
 
 
 
 
 
So ordered.