STATE OF NEW YORK PUBLIC SERVICE COMMISSION
______: In the Matter of Department of Public Service : Staff Investigation into the Utilities’ : Preparation for and Response to August 2020 : Case 20-E-0586 Tropical Storm Isaias and Resulting Electric : Power Outages : ______
RESPONSE OF CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. TO ORDER TO SHOW CAUSE
December 21, 2020
Richard B. Miller Joshua A. Konecni David P. Warner Walter Hedeman 4 Irving Place New York, New York 10003
Frances E. Bivens Michael Scheinkman DAVIS POLK & WARDWELL LLP 450 Lexington Avenue New York, New York 10017
Attorneys for Consolidated Edison Company of New York, Inc.
TABLE OF CONTENTS
Page No.
I. BACKGROUND ...... 5 A. Tropical Storm Isaias ...... 5 B. Storm Preparation ...... 6 1. Weather and Impact Forecasts ...... 6 2. Isaias Forecasts and Staffing ...... 7 3. Post-Impact Response ...... 10 C. Scorecard and Part 105 Report ...... 11 II. RESPONSE TO SHOW CAUSE ORDER ...... 11 A. The Reasonable Compliance Standard ...... 12 B. Con Edison Complied with the ERP Classification and Staffing Sections ...... 15 1. Con Edison Complied with the ERP ...... 15 2. Section 25-A Penalty Authority Does Not Apply to Discretionary Acts ...... 18 3. Even if Actionable, the Order’s Allegations that Con Edison’s Forecasts Were Unreasonable Do Not Provide a Basis for Commencing a Penalty or Prudence Action ...... 19 4. Con Edison Reasonably Complied with the Classification and Staffing Requirements ...... 26 C. Con Edison Reasonably Complied with the ETR Requirements ...... 28 1. The Phrase “Vast Majority” is Part of Con Edison’s Commission- Approved ERP and Cannot Be the Basis for a Violation ...... 29 2. Con Edison Reasonably Complied with its ERP on Local ETRs ...... 31 3. Con Edison Reasonably Complied with its ERP on ETR Targets ...... 32 D. Con Edison Reasonably Complied with the IVR Requirements ...... 33 1. Con Edison Reasonably Complied with the IVR Update Deadlines ...... 34 2. Con Edison’s IVR Message Was Consistent with the Company’s Press Releases ...... 35 E. Con Edison Reasonably Complied with the Call Center Staffing Requirements ...... 37 F. Con Edison Reasonably Complied with its LSE Requirements ...... 37 G. There is No Basis for a Prudence Action ...... 40 III. CONCLUSION ...... 41
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STATE OF NEW YORK PUBLIC SERVICE COMMISSION ______: In the Matter of Department of Public Service : Staff Investigation into the Utilities’ : Preparation for and Response to August 2020 : Case 20-E-0586 Tropical Storm Isaias and Resulting Electric : Power Outages : ______
RESPONSE OF CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. TO ORDER TO SHOW CAUSE
On November 19, 2020, the Commission issued an Order1 directing Con Edison to respond to allegations that the Company violated its Emergency Response Plan (ERP) during
Tropical Storm Isaias and to show cause why the Commission should not commence a penalty or prudence action against the Company.2 The Order alleges up to $102 million in penalties, of which $62 million are due to Con Edison’s reliance on allegedly unreasonable weather forecasts.
For the reasons set forth in this response, the Company respectfully submits that the Commission should not commence either a penalty or prudence action and should dismiss the allegations.
1 Case 20-E-0586, In the Matter of Department of Public Service Staff Investigation into the Utilities’ Preparation for and Response to August 2020 Tropical Storm Isaias and Resulting Electric Power Outages (Isaias Proceeding), Order to Commence Proceeding and Show Cause (issued Nov. 19, 2020) (Order).
2 Order at Ordering Clause 1. The Commission can commence two types of penalty actions under the Public Service Law. Under section 25-a, the Commission can commence an administrative penalty proceeding and assess penalties for failure to “reasonably comply” with the Public Service Law or an order or regulation adopted thereunder. Under section 25, the Commission can commence a case in New York State Supreme Court and pursue a civil penalty if a utility “knowingly” violates the Public Service Law or an order or regulation adopted thereunder. As explained in this response, nothing in the Order or the Department of Public Service’s investigation justifies the Commission commencing a penalty action under the “reasonably comply” standard of section 25-a, let alone the “knowingly” standard of section 25. Therefore, for the reasons stated in this response, Con Edison asserts that the Commission cannot make a finding, based on the preponderance of the evidence, under either standard. For similar reasons, there is no basis for a prudence proceeding based on the Company making an unreasonable decision, regardless of whether the decision constitutes a violation of a Commission requirement. 1
First, the Order misapplies section 25-a of the Public Service Law. That statute
authorizes the Commission to assess a penalty only when a utility fails to “reasonably comply”
with the Public Service Law or an order or regulation adopted thereunder.3 The reasonable
compliance standard requires utilities to be “reasonably diligent and energetic in attempting to
accomplish what was ordered,”4 for example, by having a plan that “reasonably assures” compliance with the ERP.5 The Order ignores the reasonable compliance standard and attempts
to replace it with a strict liability standard that has no basis in law and tolerates no departure,
however reasonable, from the Department of Public Service’s (Department) after-the-fact view of events. As later sections of this response demonstrate, Con Edison met or exceeded the standard of a reasonably diligent response with respect to each allegation and the Commission should not commence a penalty action. For example, before the storm, the Company mobilized more restoration workers than its ERP required and more than before any other storm in its history, including Superstorm Sandy. And once the Company saw that the storm, and consequentially its impact, was worse than forecast, it quickly obtained more restoration workers so that it had more workers on the ground than for any other storm in its history.
Nowhere is the Order’s disregard for the reasonable compliance standard more evident than its proposal to use the ERP’s storm classification and staffing section to impose a $62
3 Public Service Law § 25-a. The Commission recently approved a § 25-a settlement that acknowledged that reasonable compliance is the standard. Case 17-G-0316, Order Approving Settlement Agreement, Attachment at 5 (issued April 23, 2020).
4Aspira of New York, Inc. v. Board of Education, 423 F.Supp. 647, 654 (S.D.N.Y.1976).
5 See, e.g., Case 14-F-0490, Application of Cassadaga Wind LLC for A Certificate of Envtl. Compatibility & Pub. Need Pursuant to Article 10 to Construct A Wind Energy Project, Located in the Towns of Charlotte, Cherry Creek, Stockton & Arkwright, Chautauqua Cty., Order Approving Compliance Filings, (issued June 14, 2019) (finding that an Invasive Species Control Plan that “addresses the control measures that will be used for construction, materials, inspection and sanitation, invasive species treatment and removal, and site restoration . . . . [and] includes a baseline species survey as well as the foundation for the required invasive species management . . . . reasonably assures compliance with Certificate Condition 34 of the Certificate Order.”) (“Cassadaga Wind”) at 4. 2
million penalty related to allegedly unreasonable weather forecasts, including $12.4 million for
the day of the storm, when the forecast was essentially irrelevant. Unable to identify any
classification or staffing requirement that was not met, the Order disregards well-established rules that require the Commission to strictly construe the ERP6 and alleges, based on hindsight,
that Con Edison’s weather forecasts were somehow “unreasonable.” Neither the Order nor the
Department’s Interim Report (Report) provide evidence for this claim. But merely criticizing forecasts after the fact does not provide a basis for commencing an action or explain how Con
Edison allegedly violated the ERP.
In contrast, in the affidavit submitted with this response, Con Edison’s expert
meteorologist – who had accurately forecast the impact of Tropical Storm Fay7 weeks earlier –
explains in detail why he relied on his assessment of the highly regarded National Hurricane
Center, National Weather Service, and European Model in developing his Isaias forecasts rather
than the far less reliable models the Order cites. The meteorologist further explains that there
were no material differences between his forecasts and the National Hurricane Center’s and
National Weather Service’s, and that his wind forecasts were slightly more accurate over the
course of the event. The Order criticizes Con Edison for having only one meteorologist, but Con
Edison is the only utility in the State to have an expert meteorologist at all, and the evidence here
confirms that his Isaias forecasts were reasonable.
Second, the Order’s other allegations either misrepresent the ERP or ignore that Con
Edison was complying with a practice instituted to implement the Department’s
recommendations after Winter Storms Riley and Quinn. For example, the Order alleges two
6 See, e.g., New York State Thruway Auth. v. Maislin Bros. Transp. Ltd., 35 A.D.2d 301, 303, 315 N.Y.S.2d 954, 957 (1970).
7 Cerruti Aff. ¶ 77. 3
violations and seeks $6 million in penalties because Con Edison used the phrase “vast majority”
in press releases explaining when it expected to restore service to customers. The Order ignores
that Con Edison adopted the phrase in direct response to a Department recommendation, and that
the Commission approved the ERP press release template with these exact words.
Con Edison understands that its customers suffered because of Isaias’ significant impact
and, as it always does, strove to restore customers as safely and quickly as possible. Con Edison also understands that the State views incentives and penalties as tools to protect customers. But commencing a penalty or prudence proceeding here, especially with respect to weather forecasts, would not promote customers’ interests8 and could serve only to increase customers’ costs. In particular, the threatened $62 million penalty for weather forecasts would only reinforce the recently expressed S&P view that the Order “weakens New York’s regulatory compact,”9 which
would ultimately increase all New York State utility customers’ costs through lower credit
ratings and associated higher financing costs, without promoting any improvement in storm
restoration.
The Commission should not disregard the legislature’s reasonable limits on the
Commission’s penalty authority by commencing a penalty proceeding. The reasonable
compliance standard was an essential part of the legislature’s decision to grant the Commission
penalty authority; ignoring it here would be contrary to the legislature’s intent and to sound
8 Con Edison is focused on storm resilience and restoration and is a leader in that regard due in large part to its $1 billion storm hardening plan and its climate change vulnerability study. See, e.g., https://www.coned.com/en/about- us/media-center/news/20191220/con-edison-climate-study-details-projected-impacts (press release discussing Con Edison’s climate change vulnerability study). Moreover, Con Edison has publicly announced its desire to engage with stakeholders to further enhance storm resilience and restoration.
9 Con Edison Inc. And Subs Outlooks Revised To Negative Amid Potential Political Headwinds; Ratings Affirmed, S&P Global Ratings (Nov.24, 2020), https://www.standardandpoors.com/en_US/web/guest/article/- /view/type/HTML/id/2560798. 4
regulation. Utilities are highly regulated,10 provide critical public services, and have an
obligation to serve all customers, regardless of the circumstances.11 The reasonable compliance
standard recognizes this and protects utilities – and customers – from State action that does not promote customers’ interests. The Order cannot erase it from the law, and its apparent attempt to do so threatens the stability of New York utility regulation.
I. BACKGROUND
A. Tropical Storm Isaias
On Tuesday, August 4, 2020, Tropical Storm Isaias inflicted significant damage on Con
Edison’s service territory. Wind gusts of up to 70 miles per hour in New York City and 59 miles per hour in Westchester County caused thousands of trees to fall across the area, including
11,000 damaged and fallen trees in New York City. Nearly 330,000 customers lost power, making this restoration job second only to Superstorm Sandy in the Company’s history.
The storm had a much more severe impact on Con Edison’s service territory than was predicted. On Tuesday morning, both the National Hurricane Center and Con Edison’s meteorologist predicted that the storm would hit just west of New York City, with the likely result that its strongest winds would miss Con Edison’s service territory. But, just hours before impact, the storm swung approximately 35 miles west towards Pennsylvania. This unexpected
10 Indeed, the Commission even regulates how much cost recovery the Company is eligible for if it prepares for a storm that does not materialize. See, e.g., Case 19-E-0065, et al, Order Adopting Terms of Joint Proposal and Establishing Electric and Gas Rate Plan, (Jan.16, 2020), Attachment A, Joint Proposal at 48-49. It should also be noted that utility rate plans contain numerous requirements, which, if not met, require the utility to pay “negative revenue adjustments” without any need for the Commission to find culpability. The existence of these “adjustments” provides an additional underlying justification for the importance of the “reasonable compliance” standard and why the Commission should strictly adhere to that standard in determining whether to commence a penalty action.
11 It is for similar reasons that utilities are subject to a gross negligence standard for tort liability for outages. See Richard J. Pierce, Jr, Regional Transmission Organizations: Federal Limitations Needed For Tort Liability, 23 Energy L.J. 63 (2002). 5 shift caused the storm’s strongest winds to barrel down directly on Con Edison’s service territory.
After the storm, Con Edison immediately began to work on restoring customers, including increasing its already augmented staffing. When the storm hit, the Company had 835 restoration workers ready for deployment – more workers than required by its ERP and more workers than it had in advance of Superstorm Sandy. Despite the extensive damage, the
Company’s restoration pace was significantly faster than after other major storms with overhead damage. The Company restored an average of 2,150 customers per hour, which is 1.5 times faster than after Hurricane Irene, and 2.7 times faster than after Winter Storms Riley and Quinn.
B. Storm Preparation
1. Weather and Impact Forecasts
Con Edison uses observational data, commercial vendors, weather models,12 and other information to track storms and produce weather forecasts tailored to the Company’s service territory. The Company then uses its weather forecasts as inputs into impact models that estimate the number of outage jobs a storm will produce.13
The weather and impact forecasts guide, but do not determine, how Con Edison classifies or staffs for a storm. The Company makes those decisions based on weather and impact
12 Weather models collect observational data (such as wind speed, temperature, pressure, and humidity) from thousands of sources and locations, estimate unknown conditions, and run mathematical calculations to predict possible weather outcomes. To account for uncertainty, modelers run models multiple times with slightly different conditions or prediction calculations. Collections of these multiple runs (or a collection of multiple models) are called “ensembles.” There are hundreds of models operated by public and private entities. For example, the National Weather Service operates the Global Forecast System model (the American model), the European Centre for Medium-Range Weather Forecast, a quasi-governmental group, operates the European model, and many universities operate their own models. When different models or ensembles of the same model are plotted on a map to show a storm’s possible path, the display is often referred to as a “spaghetti plot.” Weather models are inputs into forecasts, not forecasts themselves. Meteorologists produce forecasts by evaluating models based on their historical accuracy and known biases, the meteorologist’s expertise, and other relevant factors. See Cerruti Aff. ¶¶ 8-14.
13 The Company has an impact mode for each of its operational areas, which are Bronx/Westchester, Brooklyn/Queens, Manhattan, and Staten Island. There is also an impact model for Orange and Rockland. 6
forecasts, factors listed in the ERP, experience, and other relevant information.14 The most
important factor is the Company’s goal to restore customers safely and expeditiously, which is
what it did for Tropical Storm Isaias.
2. Isaias Forecasts and Staffing
On Wednesday, July 29, Tropical Storm Isaias was characterized as “Potential Tropical
Cyclone 9,” a tropical wave located about 300 miles southeast of Puerto Rico. Con Edison’s
expert meteorologist predicted that “Potential Tropical Cyclone 9” would soon be designated
Tropical Storm Isaias and could bring tropical force winds to Con Edison’s service territory as
early as 8:00 p.m. on Monday, August 3.15 The Company meteorologist stated that the two most likely scenarios at that point, based on the European and American weather models, were that the storm would track over Hispaniola and then towards Florida (European model) or track north of
Hispaniola and possibly up the coast (American model). The National Hurricane Center had a track forecast similar to the American model, but it did not extend as far out in time.16
On Thursday July 30, the Company meteorologist identified three possible storm tracks based on the European model, which he chose “because it historically has the best track verification of any numerical weather prediction model and its ensemble captures the track uncertainty better than most other tools.”17 The first track showed a weaker storm dissipating
over Hispaniola and drifting towards south Florida. The second showed the storm weaker but
14 Schimmenti Dep. 62:4-12 (“So we have folks look at the weather report, they look at the job impact model, they look at the procedure. And all three of those are – are factors. And there’s – there’s certainly experience weighing in there, as well. I mean, the folks that are determining mobilization criteria and staffing have also been through this multiple times, as well. So they – they will provide their input and assessment, based on all those different factors.”)
15 Cerruti Aff. ¶ 33; Ex. CERRUTI-1.
16 Cerruti Aff. ¶ 34; Ex. CERRUTI-2.
17 Cerruti Aff. ¶ 37. 7
surviving Hispaniola, brushing eastern Florida, then tracking up the East Coast, making landfall in central Long Island. The third showed a stronger storm that curved out to sea and missed the
East Coast. The Company meteorologist placed the highest confidence on the second track,
which showed that he expected the storm to track close to Con Edison’s service territory. The
National Hurricane Center had a similar track forecast,18 except that the Company
meteorologist’s forecast had the storm tracking closer to Con Edison’s service territory.
On Friday, July 31, the storm was a category 1 Hurricane located 500 miles southeast of
Miami, Florida. Based on the latest information, the Company meteorologist eliminated track one as a possibility. If the storm followed track two, it would behave like Tropical Storm Fay, which had hit the Con Edison service territory on July 10. Fay made landfall near Atlantic City,
New Jersey, and tracked north, striking the service territory as a tropical storm with maximum
sustained winds of 40 miles per hour, according to the National Hurricane Center. Nevertheless,
Fay was a minor event for the Company.19 If the storm followed track three, it would bring rain
with a relatively light wind impact. The Company meteorologist predicted that a track between
tracks two and three was the most likely scenario.20 Again, the Company meteorologist’s track
forecasts were similar to the National Hurricane Center’s track forecasts.21 The Company
meteorologist’s most likely scenario was not expected to cause heavy damage to the service
territory. But to be well positioned to restore customers in a timely manner, Con Edison
18 Id. ¶ 38; Ex. CERRUTI-6.
19 Cerruti Aff. ¶ 28 (explaining that meeting the technical definition of a tropical storm does not by itself mean that a storm will result in a significant impact on Con Edison’s service territory).
20 Id. ¶. 41; Ex. CERRUTI-10.
21 Cerruti Aff. ¶ 42; Ex. CERRUTI-11. 8
proactively exercised its right-of-first refusal contracts and secured 70 contractors to supplement
its workforce for storm restoration.
On Saturday, August 1, the Company meteorologist’s weather forecast for Isaias was
sustained winds up to 25 miles per hour and gusts of up to 35 miles per hour. Because the
Company meteorologist did not materially change his weather forecast from Friday to Saturday,
the Company did not seek additional restoration workers. Both the Company meteorologist and
the National Hurricane Center continued to predict a track east of Con Edison’s service territory,
but closer to the coast than the day before.22
On Sunday, August 2, the Company meteorologist continued to predict a westward shift
in the storm’s track, sustained winds of up to 40 miles per hour (exceeding tropical storm force),
and gusts up to 55 miles per hour.23 The National Hurricane Center also shifted its track further
west and was in general alignment with the Company meteorologist’s track forecast.24 Because
the Company meteorologist predicted increased winds and a westward shift, Con Edison’s three
overhead operating regions decided to mobilize to the “Serious” level for August 4. Con Edison
then sought and obtained an additional 120 restoration workers. Acquiring these workers put the
Company over its minimum required staffing levels. As of Sunday, August 2, the Company had
a projected staffing “buffer” for the storm.
On Monday, August 3, the Company meteorologist predicted sustained winds of up to 45
miles per hour, gusts of up to 60 miles per hour, and landfall slightly west of New York City.25
22 Cerruti Aff. ¶¶ 45-46; Ex. CERRUTI-15; Ex. CERRUTI-16. While New York State issued a press release on Friday acknowledging that the forecast may change, it did not issue a press release containing a forecast on Saturday or Sunday.
23 Cerruti Aff. ¶¶ 49, 51; Ex. CERRUTI-23.
24 Cerruti Aff. ¶ 50; Ex. CERRUTI-21.
25 Cerruti Aff. ¶ 55; Ex. CERRUTI-28. 9
Based on this information and discussions with operating personnel, Con Edison’s
Bronx/Westchester operating region upgraded its mobilization for August 4 to a Serious 2B. Out
of an abundance of caution, Con Edison sought an additional 150 restoration workers from the
North Atlantic Mutual Assistance Group, but they were not available. The Company
meteorologist’s and National Hurricane Center’s track forecasts continued to be very close.26
On the morning of Tuesday August 4, several hours before the storm hit Con Edison’s
service territory, its path was roughly the same as Monday night with slightly higher winds. The
Company meteorologist predicted sustained winds of up to 45 miles per hour and gusts of up to
65 miles per hour.
Just a few hours before impact, the fast-moving storm unexpectedly tracked about 35 miles west towards Pennsylvania. This shift took the storm outside the National Hurricane
Center’s forecast cone27 and caused the storm’s worst winds to directly hit Con Edison’s service
territory. Thus, while the Company anticipated the general westward shift and staffed
accordingly, this last-minute shift and wind increase caused extensive and unexpected damage to
the Company’s electric infrastructure. 28 As a result, nearly 330,000 customers lost power.
3. Post-Impact Response
When Con Edison saw the extent of the storm damage, it mobilized its Corporate
Emergency Response Center and sought to obtain additional restoration workers, as its ERP
anticipates. Because Isaias was a regional event that affected the East Coast, qualified workers
were in high demand. The Company worked through the established mutual aid process and
26 Ex. CERRUTI-25; Ex. CERRUTI-26.
27 The forecast cone, or cone of uncertainty, is the agency’s official prediction of all probable paths for a storm. See https://www.nhc.noaa.gov/aboutcone.shtml.
28 Con Edison and others are continuing to investigate how much other factors, such as the drought that preceded the storm, contributed to the unexpected damage. 10
supplemented that effort by obtaining contractors on its own. For the first time, the Company
activated a program that it had created after Winter Storms Riley and Quinn and flew in 100
restoration workers from across the country and equipped them with overhead bucket trucks it
had acquired in advance for this program. In total, the Company obtained 2,280 additional
restoration workers after the storm hit. The Company’s peak restoration workforce of employees
and outside restoration workers was 2,911. Overall, the Company used 1.6 times as many
overhead restoration workers during the applicable restoration period than it did for Superstorm
Sandy.
C. Scorecard and Part 105 Report
Con Edison filed its Scorecard Report29 for the storm on September 11, 2020, and its Part
105 Report about a month later.30 In these reports, Con Edison disclosed facts and
circumstances that the Order relies on for many of its alleged violations. In addition, as with any
major storm, the Part 105 Report identifies actions the Company can take to enhance its
performance during the next storm.
II. RESPONSE TO SHOW CAUSE ORDER
The Commission should dismiss the allegations and terminate this proceeding. Section
25-a of the Public Service Law authorizes the Commission to assess a penalty only when a utility fails to “reasonably comply” with the Public Service Law or an order or regulation adopted thereunder. But nowhere does the Order discuss the reasonable compliance standard or allege that Con Edison failed to “reasonably comply” with any ERP requirement. The Order simply
29 Isaias Proceeding, Consolidated Edison Company of New York, Inc., Scorecard for Tropical Storm Isaias, August 4-12, 2020 (filed Sept. 11, 2020).
30 Isaias Proceeding, Consolidated Edison Company of New York, Inc., Report on Preparation and Restoration, Tropical Storm Isaias – August 2020 (filed Oct. 13, 2020) (Part 105 Report). See 16 NYCRR 105.4(c).
11
presumes, incorrectly, that alleged ERP violations are strict liability offenses and that any
deviation from an ERP requirement, no matter how small, potentially justifies a penalty. As
explained herein, Con Edison reasonably complied with its ERP during Tropical Storm Isaias.31
Moreover, the allegations also ignore that in two cases Con Edison was acting pursuant to
practices instituted to comply with the Department’s recommendations after Winter Storms Riley
and Quinn.
A. The Reasonable Compliance Standard
Section 25-a of the Public Service Law authorizes the Commission to assess a penalty
only if it finds by a preponderance of evidence that a utility failed to “reasonably comply” with
the Public Service Law or an order or regulation adopted thereunder.32 Under the preponderance
standard, the Commission must find “clear and convincing” evidence that a utility did not
reasonably comply with a requirement.33 Here, the evidence is “clear and convincing” that Con
Edison more than reasonably complied with the ERP and that commencement of a penalty
proceeding is not justified.34
In interpreting the reasonable compliance standard, it is appropriate to look to how courts
have interpreted “reasonable compliance” in analogous contexts, e.g., when determining whether a penalty is appropriate because a party did not comply with a court order. When assessing
31 Thus, the Department cannot carry its burden under the reasonable compliance standard, let alone the “knowingly” standard. For the same reasons, there is no basis for a prudence case.
32 Public Service Law § 25-a (3), (5).
33 McKeon v. Van Slyck, 223 N.Y. 392, 397 (1918) (explaining that “to make out a preponderance, the evidence should be clear and convincing.”); see also Ross v. Food Specialties, Inc., 6 N.Y.2d 336, 343 (1959). The preponderance standard imposes a higher burden of proof than the substantial evidence standard under which the Commission and the Department normally operate. See, e.g., 300 Gramatan Ave. Assocs. v. State Div. of Human Rights, 45 N.Y.2d 176, 180–81 (1978) (explaining that substantial evidence “is less than a preponderance of the evidence.”); Miller v. DeBuono, 90 N.Y.2d 783, 793 (1997).
34 While reasonable compliance is the legal standard for avoiding a penalty, Con Edison strives for excellence in meeting customer expectations and complying with all regulatory requirements. 12 reasonable compliance with their orders, courts look for “diligent and energetic efforts to comply in a reasonable manner.”35 If a party has been “reasonably diligent and energetic in attempting to accomplish what was ordered,”36 it has reasonably complied with the order even if it has not
“exhaust[ed] all means available.”37 Similarly, in determining reasonable compliance with contracts, courts look past minor deviations and delays to determine if the responsible party ultimately accomplished what was required in an acceptable manner.38 Consistent with this approach, the Commission has approved plans because they “reasonably assure[]” compliance with Commission requirements.39 In other words, the standard of reasonableness is not a standard of perfection.
35 Zino Davidoff SA v. CVS Corp., No. 06-CV-15332, 2008 WL 1775410, at *13 (S.D.N.Y. 2008); accord Paramedics Electromedicina Comercial, Ltda. v. GE Med. Sys. Info. Techs., Inc., 369 F.3d 645, 655 (2d Cir. 2004) (quoting King v. Allied Vision, Ltd., 65 F.3d 1051, 1058 (2d Cir. 1995)). In contrast, courts find a lack of reasonable compliance when the responsible party takes an “apathetic” or “generally lethargic” approach to compliance, Casale v. Kelly, 710 F. Supp. 2d 347, 360, 362 (S.D.N.Y. 2010) (describing New York City’s failure to diligently comply with a court order in a reasonable manner), fails to “diligently implement [its] program of compliance,” Int’l Controls & Measurements Corp. v. Watsco, Inc., 853 F. Supp. 585, 591 (N.D.N.Y. 1994) (describing the standard for showing reasonable compliance with a court order), makes “token attempts to secure compliance,” New York Times Co. v. Newspaper & Mail Deliverers’ Union of New York & Vicinity, No. 92 CIV. 3345 (PNL), 1992 WL 110721, at *3 (S.D.N.Y. May 12, 1992) (describing efforts that fell short of the reasonable compliance standard), or evinces “a sense of non-urgency bordering on indifference,” Aspira, 423 F.Supp. at 654.
36Aspira, 423 F.Supp. at 654 .
37 Chao v. Gotham Registry, Inc., 514 F.3d 280, 293 (2d Cir. 2008) (“Gotham sought the advice of counsel before adopting its overtime policy; it made its nurses aware of the rule; it discouraged its nurses from accepting overtime shifts without seeking prior approval and discouraged its clients from offering those shifts; and, when its instructions were disregarded, it negotiated with the hospitals to procure an overtime premium retrospectively. While these steps did not exhaust all means available to Gotham to ensure that overtime was not performed . . . they are evidence of Gotham’s diligent and energetic efforts to comply in a reasonable manner with the 1994 consent judgment.”).
38 Cf. Harris v. Gen. Accident, Fire & Life Assur. Corp., 187 N.Y.S. 291, 293 (App. Term 1921) (“While the law does not require at all times strict compliance with the provisions and special agreements contained in policies of insurance, but is content with a fair and reasonable compliance [citation omitted], it does at all times require some compliance.”).
39Cassadaga Wind at 4. 13
The legislative history confirms that the legislature deliberately chose not to authorize penalties on a strict liability basis.40 Section 25-a originated in the Moreland Commission’s recommendation that the legislature authorize the Commission to assess penalties “upon a finding that [a] utility has failed to provide safe and adequate service under a ‘reasonable business’ standard (comparable to the prudence standard).”41 When the draft legislation did not reflect a reasonable compliance standard, the legislature specifically added it back in before enacting it into law.42
Finally, to the extent there were any doubt as to the appropriate standard of liability, New
York law requires a narrow construction. Because section 25-a is penal in nature,43 the
Commission must strictly construe the limits on its authority and honor the reasonable compliance standard.44 The Commission has no authority to assess a penalty where, as here, the
40 People v. Coe, 71 N.Y.2d 852, 854-855 (1988) (“In the absence of a clear legislative intent to impose strict criminal liability, such construction should not be adopted”).
41 Moreland Commission on Utility Storm Preparation and Response, Interim Report (issued Jan. 7, 2013) at 6.
42 2013 Assembly Budget Recommendations, p. 64-1.
43 See, e.g., City of New York v. Verizon N.Y., Inc., 4 N.Y.3d 255, 259 (2005) (holding that a statute “operates as a penal statute because it imposes civil fines without regard to the City’s actual costs”); People v. Consolidated Edison Co. of N.Y., 41 A.D.2d 809, 810 (1st Dep’t. 1973) (“A statute which prescribes a civil penalty is penal in nature and must be construed strictly in favor of the party against whom the penalty is sought to be imposed.”); see also People v. Whitridge, 144 A.D. 486, 489 (1st Dep’t. 1911) (holding that a statute that authorizes a penalty action is “very highly penal”) aff'd 204 N.Y. 646 (1912).
44 Thruway Authority, 315 N.Y.S.2d at 957 (“It is familiar law that a statute imposing a penalty or forfeiture shall be strictly construed and is not to be extended by implication or construed to cover cases not clearly within its terms . . . . It follows that the statutory provisions here under consideration may not be liberally construed and extended beyond the explicit authorization so as to vest in plaintiff the right to recover the penalty.”); Consolidated Edison Co., 41 A.D.2d at 810 (“A statute which prescribes a civil penalty is penal in nature and must be construed strictly in favor of the party against whom the penalty is sought to be imposed.”); Hurley Water Co., 84 A.D.2d 615, 616 (3d Dep’t. 1981) (holding that where a statute is “penal in nature in that it provides for the imposition of a fine for the violation of a PSC order, the related section should be strictly construed and not extended to cover cases not clearly within its terms”); Satra v. Brooklyn Edison Co., 285 N.Y.S. 794, 794 (App. Term 1936) (holding that a provision of the Transportation Corporations Law establishing penalties for failing to provide electric service was “penal in nature” and “must be strictly observed”); McMullin v. New York Power & Light Corp., 284 N.Y.S. 869 (Sup. Ct. 1935), aff'd, 249 A.D. 695 (3d Dep’t. 1936) (holding that a provision of the Transportation Corporations Law establishing penalties for failing to provide electric service was “penal in nature and must be strictly construed.”);
14
Order has not even alleged, let alone demonstrated, that Con Edison failed to “reasonably
comply” with the ERP. Moreover, as the next sections of this response demonstrate, Con Edison
was diligent and energetic in complying with the ERP; isolated instances of imperfect
compliance do not render its compliance unreasonable or subject to a penalty.
B. Con Edison Complied with the ERP Classification and Staffing Sections
The Order alleges that Con Edison violated four ERP sections on each of five days (for a
total of 20 violations and a $62 million penalty) by using “unreasonable” forecasts to make its
classification and staffing decisions.45 But neither the Order nor the Report explain in detail
what Con Edison did to allegedly violate the ERP on any of those five days.46 Nor can they, as
Con Edison at all times complied with the ERP and relied on reasonable forecasts.
1. Con Edison Complied with the ERP
In advance of a storm, Con Edison assigns an incident classification level and staffs to or
above the prescribed amount. The ERP: (1) defines each incident classification level; (2) sets out matrices to guide classification decisions; (3) requires the Company to consider additional classification factors beyond the matrices; and (4) prescribes the staffing for each classification level.47 The Order alleges that Con Edison violated these ERP sections by using “unreasonable”
weather forecasts to classify and staff for the storm. These allegations lack specificity and merit.
Callanan Indus., Inc. v. White, (118 A.D.2d 167, 169 (3d Dep’t. 1986) (“The power to investigate violations of a statute and to punish violators is a significant power and is penal in nature.”); see also N.Y. Stat. Law § 271 (“Generally, penal statutes are strictly construed against the State and in favor of the accused.”).
45 Order at 16-18. The Order at 17 alleges that Con Edison and Central Hudson Gas & Electric Corporation (Central Hudson) used “unreasonable weather forecasts or inputs into models related to such forecasts.” The reference to “inputs into models related to such forecasts” appears to be apply exclusively to Central Hudson. Id. at 19-20. The Order did not contain any such allegations related to Con Edison.
46 The Report only specifically alleges that Con Edison’s forecast may have been inaccurate on two days, August 1 and 3. As demonstrated herein and in the meteorologist’s affidavit, the Report is incorrect.
47 Con Edison 2020 ERP, §§ 4.1 (Incident Classification Definitions/ Response Levels), 4.2 (Regional Incident Classification Matrices), 4.3 (Consideration of Other Factors), 4.4 (Minimum Staffing). 15
First, Con Edison did everything that the ERP requires – and then some. In the days leading up to Tropical Storm Isaias, the Company’s expert meteorologist produced daily weather and outage job forecasts based on information from reputable outlets, including the National
Hurricane Center and the National Weather Service.48 The Company considered the meteorologist’s predictions, the ERP matrices, its experience, and other relevant information. As a result, the Company classified the storm as “Serious” and “Serious 2B” (for the
Bronx/Westchester operating region) and staffed above prescribed levels. When the storm hit, the Company had 835 restoration workers on site and ready to go – more workers than required by the ERP and more than it had before any other storm, including Superstorm Sandy.
The Order does not contest any of this. Rather than point to something left undone, it seeks to stretch the classification and staffing requirements beyond their plain language to allege penalties for the Company’s weather forecasts. But the Order cannot create ERP violations by reading-in requirements that do not exist. Nothing in the classification or staffing sections establish weather forecast requirements or provide any basis for finding that a weather forecast violates the ERP.49 Because civil penalties are penal in nature,50 the Commission cannot extend the ERP beyond its plain language to cover new or implied violations related to the Company’s weather forecasts.51
48 Cerruti Aff. ¶¶ 19-20, 31, 67.
49 Likewise, the ERP lists factors the Company must consider in classifying a storm but does not prioritize them or assign greater weight to one factor over another. The ERP leaves those decisions to the Company.
50 Supra n. 44.
51 Supra n. 44; Wallace & Sons v. Walsh, 125 N.Y. 26, 34–35 (1890) (rejecting argument that would require the court to extend a statute “beyond the literal meaning of the terms employed” as “contrary to the well-settled rule[] . . . . [that] [t]he courts have uniformly refused to extend a penal act beyond the strict letter of the statute in order to bring a case within its meaning which was not clearly embraced in its letter.”); see also Garrison v. Howe, 17 N.Y. 458, 466 (1858) (“But the provision is highly penal, and the rules of law do not permit us to extend it by construction to cases not fairly within the language.”). 16
Furthermore, the Order’s attempt to extend the Commission’s penalty authority to
weather forecasts conflicts with well-settled law. Courts have refused to impose liability for
weather forecasts because a weather forecast is a “classic example of a prediction of
indeterminate reliability and a place peculiarly open to debatable decisions.”52 As one court
explained, “[p]redicting possible future events whose outcome is uncertain is not an exact
science.”53 The Order invites the Commission to abandon this common-sense rule and impose a
new duty of perfect foreknowledge of the weather on New York utilities. Given that “prediction
of weather is precisely that—a prediction,” such a requirement would be per se arbitrary,
capricious, and contrary to public policy.54
Notably, the Order does not allege any known intentional malfeasance on the part of the
meteorologist;55 it simply asserts that a $62 million penalty is appropriate because the actual
impact was different than the forecasted impact. That the storm’s trajectory ultimately and
unpredictably diverged from the Company’s forecast, however, does not somehow render Con
Edison in violation of the ERP. Con Edison did more than the ERP requires it to do. That
should be the end of the story.
Finally, the forecast is just one input into Con Edison’s classification and staffing
decisions. As the ERP makes clear, Con Edison is required to consider other factors. Indeed,
had Con Edison relied exclusively on its forecast in determining its staffing, it would have
52 Brown v. United States, 790 F.2d 199, 204 (1st Cir.1986).
53 Brandt v. Weather Channel, Inc., 42 F. Supp. 2d 1344, 1346 (S.D. Fla.), aff'd, 204 F.3d 1123 (11th Cir. 1999).
54 Id. (finding that “imposition of negligence liability for allegedly incorrect weather forecasts would be contrary to public policy”).
55 Id. 17
staffed less than it did.56 The Commission should not commence a penalty proceeding against
Con Edison for allegedly inaccurately predicting the storm’s trajectory considering the
Company’s decision to staff over and above what was required by its forecast. Indeed, the
Commission-approved ERP contemplates that staffing decisions may need to be re-evaluated
after the impact of a storm precisely because forecasts may ultimately turn out to be inaccurate:
“[o]nce a storm hits, and the Company can assess actual impacts upon the system, then staffing
levels may need to be adjusted accordingly.”57 And this is precisely what Con Edison did, i.e.,
worked to significantly increase its staffing once the storm’s actual impact was clear.
2. Section 25-A Penalty Authority Does Not Apply to Discretionary Acts
In addition to misconstruing the ERP, the Order misapplies the Commission’s penalty
authority. The Commission’s penalty authority applies only to violations of the Public Service
Law or an order or regulation adopted thereunder; challenges to utility decision-making fall under the Commission’s prudence jurisdiction. While the standard of reasonableness is the
same, the Commission’s penalty authority does not apply to matters left to a utility’s discretion,
such as the forecast Con Edison uses in storm planning or how much it staffs above the ERP’s
minimum staffing levels. For example, the Order’s claim that Con Edison did not “account for
and respond to the considerable possibility that [Tropical Storm] Isaias would have the dramatic
56 See, e.g., Schimmenti Dep. 207:21-208:5.
57 ERP, section 4.4 (page 37 of 547). Con Edison’s Senior Vice President for Electric Operations explained this in his deposition: “no forecast is going to be perfect. This weather is not perfect, and modeling is not perfect. And part of our storm process is to be able to scale up if the forecast and the actual impacts are different. If they’re different in that no weather occurs, we demobilize quickly. If weather impacts are greater than the forecast, we scale up quickly. And that certainly was evident in Isaias.” Schimmenti Dep. 193:21-194:5. 18
impacts . . .that actually resulted”58 is a textbook challenge to the Company’s prudence in weighing the storm’s potential impact.59
The prudence standard permits the Commission to disallow costs in the event of any
unreasonable action but, as discussed in the next section of this response, no such unreasonable action exists here. Con Edison’s reliance on its highly credentialed and experienced expert was reasonable and the meteorologist’s forecasts were reasonable. In addition, the Company acted reasonably in preparing for the storm, including activating its right-of-first refusal contracts when the Company’s forecast indicated that the impact would be minimal and seeking additional restoration workers as the forecast changed. As such, the Commission may not disallow any costs.60
3. Even if Actionable, the Order’s Allegations that Con Edison’s Forecasts Were Unreasonable Do Not Provide a Basis for Commencing a Penalty or Prudence Action
If the Commission reaches the Department’s allegations, it should find that the forecasts
Con Edison used to comply with the classification and staffing sections were reasonable.
First, the Company hired a professional expert meteorologist to develop weather forecasts
particular to its service territory.61 Second, the meteorologist used a reasonable process to
58 Order at 16.
59 The Order’s newly minted “considerable possibility” standard appears nowhere in the ERP and can only be the basis for a prudence claim. As discussed herein, the Order’s allegation is incorrect and ignores the Company’s efforts to prepare for the storm, including activating its right-of-first refusal contracts when the Company’s forecast indicated that the impact would be minimal.
60 Moreover, the Order does not and cannot allege that there would have been a material difference in restoration time if the Company had staffed differently. In his deposition, Con Edison’s Senior Vice President of Electric Operations explained the complexity of restoration and how it is difficult to directly relate increased staffing to a precise increase in restoration time, especially with respect to the “tail end” customers that have the most challenging restoration work. Schimmenti Dep. 81:2-83:16; 109:4-117:7.
61 This meteorologist was not only an expert in weather forecasting but also had written his master’s thesis in meteorology on the impact of extreme weather on utility infrastructure. Moreover, while the Order criticizes the
19 develop the forecasts. As the meteorologist explained in his deposition and repeats in his affidavit,62 he reviewed radar, satellite, and weather station data to get a snapshot of real-time atmospheric conditions, compared the data to his prior forecasts, and identified conditions that needed monitoring throughout the event. He then reviewed multiple weather models and ensembles, reports from commercial vendors, and other available information. He reconciled the data before him using his experience, education, and knowledge of each model’s or ensemble’s accuracy, biases, and limitations. He then developed a preliminary track and weather forecast and checked it against the National Hurricane Center and the National Weather Service. After final review, he issued his forecast to the Company and continued to check for updated ensembles and weather station data throughout the day. In other words, he acted exactly as a reasonable meteorologist would act.
Third, the sources the meteorologist relied on were reasonable. As the meteorologist explained in his deposition and explains again in his affidavit, he relied on the European model,63 which is better regarded and typically more accurate than the models referenced in the
Order.64 Moreover, the models referenced in the Order were outliers, out of step with
Company for having only one meteorologist on staff for this storm, Order at 17, Con Edison is the only New York State utility that even has one meteorologist. In addition, while Con Edison has two meteorologist positions, the Order omits that: (1) the meteorologist on staff during the storm was more experienced than his colleague who left the Company in the months before the storm; (2) one meteorologist routinely handled all forecasting duties when the other was sick or on vacation; (3) Company witnesses testified that they did not perceive any difference in quality because of the second meteorologist’s departure; and (4) the meteorologist on staff had, on his own and just weeks before Isaias, accurately predicted how Tropical Storm Fay would impact the Company’s service territory.
62 Cerruti Dep. 20:21-27:3; 109:24-112:25; 116:8-123:16; Cerruti Aff. ¶¶ 19-20, 31, 67.
63 Cerruti Dep. 111:19-2; Cerruti Aff. ¶¶ 33,75.
64 Cerruti Dep. 213:5-215:7; 216:18-220:5; 228:12-230:18 (explaining the weaknesses and reasons for discounting certain models on the UCAR map); Cerruti Aff. ¶18 (explaining that “the individual models displayed on the UCAR generated maps often display worse forecast performance than the European model for track”); ¶ 74 (explaining that “the models the Order cites . . . are generally known as being less accurate than the European model on average.”); ¶ 71 (“I reviewed the models the Order appears to refer to and gave them little individual weight based on their poor historical performance, my knowledge of their strengths and weaknesses, and performance for Isaias so far.”); ¶ 75 (explaining that the European model “has an excellent track record” for predicting tropical cyclone tracks). 20 consensus.65 The meteorologist was not alone in preferring the European model or ascribing a probative value to consensus. The National Hurricane Center cited the “typically reliable”66
European and American models twice and the consensus models it develops67 three times in explaining the basis for its Isaias track forecasts.68 The Order offers no expert evidence or other legitimate reason to second guess the meteorologist’s and the National Hurricane Center’s judgement;69 its whole case for a $62 million penalty rests on applying 20-20 hindsight to weather forecasts.
Fourth, the meteorologist’s track forecasts were aligned with the National Hurricane
Center and the forecasts that New York State itself issued.70 The National Hurricane Center is the official United States agency responsible for tracking hurricanes and tropical storms71 and is
65 Cerruti Dep. 230:8-14 (“And in my experience when an individual track begins to diverge from the consensus of the rest of the models and is not in a line with the National Hurricane Center, what happens after that is essentially more of a coincidence and less of a -- a threat to take seriously at that point because other models are in better agreement and have more reliability than say the Canadian model which usually performs the worst out of all the models that are physically derived and -- and -- and analyzed I've seen.”).
66 See https://www.nhc.noaa.gov/archive/2020/al09/al092020.discus.021.shtml?.
67 Cerruti Aff. ¶¶ 9, 13, 17.
68 https://www.nhc.noaa.gov/archive/2020/al09/al092020.discus.008.shtml?; https://www.nhc.noaa.gov/ archive/2020/al09/al092020.discus.013.shtml?; https://www.nhc.noaa.gov/archive/2020/al09/al092020 .discus.021.shtml?.
69 The Order cites the UCAR website in support of its claim that the Company’s expert meteorologist produced unreasonable forecasts because he disregarded “numerous” models. Order at 16, n. 23. UCAR displays many models on a single map. The Order does not explain how many models it takes to be “numerous” or how that number compares to the number of models that were consistent with the meteorologist’s forecast. More importantly, the Order does not present any expert or other qualitative evidence that would justify its claim that the meteorologist should have given certain UCAR member models more weight than he did. For example, the Order does not discuss the models’ accuracy over time in comparison to the European and National Hurricane Center models or explain why the meteorologist should have given them more weight than he gave to the European or National Hurricane Center models. In contrast, the meteorologist explained in detail during his deposition why it was reasonable to give the UCAR member models the weight he did. See supra n. 64. This is not even a question of the preponderance of the evidence; the only evidence in this case supports Con Edison.
70 Infra n. 78.
71 National Hurricane Center, National Weather Service website, National Centers for Environmental Prediction page, https://www.weather.gov/organization/ncep (“The National Hurricane Center (NHC) has been delegated
21 the gold standard for hurricane forecasting.72 During the entire event, there was no material difference between the Hurricane Center’s track forecasts and the Con Edison meteorologist’s track forecasts, except that the meteorologist’s track forecasts were slightly more accurate in terms of the actual wind impact because they favored a more westerly track.73
This is particularly important because on the days when external restoration workers were most available – the Friday and Saturday prior to the storm reaching the area – both the National
Hurricane Center and the meteorologist predicted that the storm would not seriously impact Con
Edison’s service territory. In this regard, the Order incorrectly implies that Con Edison did not consider the possibility of an impactful storm or augment its workforce in the early days of tracking the storm.74 To be clear, on Friday, July 31, the Company exercised its right-of-first refusal contracts and secured 70 contractors for storm restoration notwithstanding the meteorologist’s weather prediction, which, consistent with the National Hurricane Center’s forecast, did not predict significant impact to the Company’s service territory. On Sunday,
August 2, in response to the storm’s westward shift, the Company sought and obtained an additional 120 restoration workers.
overall national responsibility for providing hurricane forecast and warning services for the general public, the public sector, and all branches of the U.S. Government including the Department of Defense (DOD), Department of Commerce (DOC), and Department of Transportation (DOT).”) (last visited Dec. 10, 2020).
72 Christopher Spata, Is the European model for tracking hurricanes like Dorian better than NOAA’s American model? Should you care?, Tampa Bay Times (Sept. 6, 2019, updated Sep. 9, 2019), https://www.tampabay.com/weather/2019/09/06/is-the-european-model-for-tracking-hurricanes-like-dorian-better- than-noaas-american-model-should-you-care/ (“the U.S.’s National Hurricane Center is the ‘gold standard,’ said Vijay Tallapragada, chief of the modeling and data assimilation branch at the National Oceanic and Atmospheric Administration’s Environmental Modeling Center.”).
73 Cerruti Aff. ¶¶ 60, 64, 67.
74 Amid alleging that Con Edison’s forecasts were “unreasonable,” the Order claims that Con Edison turned away staffing on July 31 and August 1 based on “inaccurate” forecasts. Order at 18. That is incorrect. As the parties previously stipulated in this proceeding, accuracy for forecast purposes should be defined as whether “the forecast was accurate at the time it was issued based on the conditions that were known at the time it was issued.” Sniffen Dep. 7:14–8:10. Con Edison’s forecasts were accurate under that common-sense definition. 22
The Order concedes that “not every” “well-established” model caught the storm’s
eventual track.75 What the Order neglects to mention is that the National Hurricane Center – the
nation’s official hurricane and tropical storm forecaster – is among the outlets that did not predict
the eventual track, and that the Hurricane Center’s and the meteorologist’s track forecasts were
materially the same.76 In other words, the Order is not just second-guessing Con Edison’s
meteorologist, it is second-guessing the National Hurricane Center.
Fifth, the meteorologist’s wind forecasts were not only consistent with, but were generally more accurate over the whole event than the National Weather Service’s.77 The Order
offers no basis for claiming that the meteorologist’s forecasts were unreasonable, nor could it, as
the State’s own press releases issued before the storm rely on National Weather Service
information and make similar predictions.78
Sixth, rather than cite expert testimony to challenge the meteorologist’s forecasts, the
Order makes baseless accusations. For example, the Order incorrectly claims that the meteorologist either “fail[ed] to consider countervailing forecasts made by reputable entities” or
“disregarded numerous models that conflicted with his opinion.”79 As a threshold matter, the
75 Order at 16 (“The Department’s investigation revealed that, days before the storm when additional resources were obtainable, multiple (although not every) well-established weather models predicted that TS Isaias would shift in a westward direction with sustained winds and gusts occurring over and around the New York City metropolitan area and neighboring counties.”).
76 Cerruti Aff. ¶ 60, 63-64; 67.
77 Id.
78 See https://www.governor.ny.gov/news/governor-cuomo-directs-state-agencies-prepare-emergency-response- assets-hurricane-isaias; https://www.governor.ny.gov/news/governor-cuomo-reminds-new-yorkers-prepare-strong- winds-and-heavy-rains-tropical-storm-isaias; and https://www.governor.ny.gov/news/governor-cuomo-updates-new- yorkers-states-preparations-tropical-storm-isaias-begins-impacting.
79 Order at 16 (“[E]ach day a utility makes an unreasonable weather forecast, including by failing to consider countervailing forecasts made by reputable entities like the [National Weather Service], represents a separate, discrete violation of Part 105. Applied here, the Department submits that Con Edison . . .for the fact specific reasons discussed next, used unreasonable weather forecasts or inputs into models related to such forecasts for five separate
23
Order alternates between two mutually exclusive allegations.80 Either the meteorologist did not consider other forecasts, or he disregarded them because they disagreed with his forecasts. Both cannot be right. That the Order alleges facts in the alternative speaks volumes about its allegations. The facts are simple. The meteorologist considered multiple models and ensembles throughout the day, including those referenced in the Order, and evaluated them according to his expertise and judgement.81 And for the reasons discussed in this response, his judgement was reasonable.
The Order then incorrectly implies that the meteorologist did not adequately account for a potential westward shift in the storm.82 His forecasts show the opposite.83 And so does the questioning by the attorney who examined the meteorologist during the deposition, as he acknowledged that the meteorologist had a westward shift in his forecasts beginning on July
days –from July 31- August 4.”) (citations omitted), 17 (alleging that “when considering the multiple available weather models at his disposal, [the Con Edison meteorologist] disregarded numerous models that conflicted with his opinion.”).
80 The Order also states that the Department considers it unreasonable that Con Edison “does not normally issue a revised outage forecast unless the weather drastically changes.” Order at n.26. Con Edison disagrees. As the meteorologist explains in his affidavit, tropical storm probability forecasts can vary during the day as they did on August 1 from the morning (six to ten percent for the New York City area) into the afternoon (27-33 percent at 5:00 p.m.) and into the evening (back down 10-14 percent). Cerruti Aff. ¶¶ 65, 68. As the Company’s meteorologist explains, “the up and down in the Hurricane Center’s probability forecasts demonstrates why it would be inadvisable for me to update my forecasts throughout the day but instead look at the larger picture.” See Cerruti Aff. ¶ 66.
81 See e.g., Cerruti Dep. 208:11-209:6 (explaining that the meteorologist reviewed multiple models simultaneously, including the [UCAR] models but “made the assessment that [he] had the highest confidence in the European model.”); Cerruti Aff. ¶¶ 71-72, 75; supra n. 64, 69. The meteorologist also explained that while he favored the European model, he checked it against other models throughout the event. Cerruti Dep. 29:19-31-25 (explaining how the meteorologist uses other models to check the European model); 295:13-296:4 (explaining that the European model “is not the end all, be all” and that he “would consider all the information as a whole and see how that whole of information has changed over time to help augment my -- what I think that the forecast will be.”).
82 Order at 16.
83 See e.g., Ex. CERRUTI -19 (“Isaias is now expected to track a bit further west than yesterday. This will open the door for impactful winds to occur across the ConEd and O&R areas”; “Based on the latest information, Track 2 is now most likely to occur due to a westward shift in the latest guidance.”). 24
31,84 and noted it three times in the preface to his questions.85 The Order’s suggestion that the
Company meteorologist missed the storm’s general westward shift should be rejected out of
hand.
The Order also incorrectly implies that the storm’s general westward shift, which had
been evident for days, was the same as, or predictive of, the storm’s unexpected last-minute
significant westward turn and associated impact.86 On the morning of August 4, both the
National Hurricane Center and the meteorologist predicted that the storm would hit just west of
New York City, with the likely result that its strongest winds would miss the Company’s service
territory. But, just hours before impact, the storm swung approximately 35 miles west towards
Pennsylvania. This unexpected shift, which took the storm outside the National Hurricane
Center’s cone of uncertainty, caused the storm’s strongest winds to barrel down directly on the
Company’s service territory.87 As a meteorologist for the State University at Albany stated to
the Con Edison meteorologist: the storm’s impact was “unexpectedly bad.”88
Finally, the Order mischaracterizes and misinterprets the significance of an email that the
meteorologist sent in which he wrote that the National Hurricane Center is “really fluffing th[e]
storm up.” That statement refers only to the fact that on August 4 the National Hurricane Center
84 Cerruti Dep. 122:16-22 (“Twenty -- I'm sorry, 8/2, N.H.C. shifts a bit west. So that’s, you know, again, it’s shifting west. So, you have it, you know, if you -- you know, you have a westward shift beginning on 7/31. N.H.C. has a westward shift on 8/1 and 8/2. Would you agree with that?”).
85 Cerruti Dep. 41:17-21 (“We’re going to get to discussing Tropical Storm Isaias, you know, in more detail in a little bit, but would you agree that I think your reports suggest this, that the storm track was pretty consistently trending west, day after day.[sic]”); 42:12-16 (“Would you agree that, you know, I think I saw in some of your paperwork that in this storm, there was a trend day -- day-by-day where the track was moving to the west. Would you agree with that?”); 122:16-22. 86 Order at 16.
87 See Cerruti Aff. ¶ 61; Cerruti Dep. 43:8-47:12 (explaining the storm’s last minute unexpected westward turn and its effect on the impact the storm had on Con Edison’s service territory.).
88 Ex. CERRUTI-43. 25
was measuring winds over the ocean, as opposed to over land, and that those measurements did
not seem relevant to wind speeds of concern to the Company.89 The Order also ignores that in
that same email, the meteorologist noted that he had increased his wind speed and peak gust
forecasts to reflect the latest models.90 As made clear by reading the entirety of the email,
whatever the meteorologist’s opinions about the these particular measurements, they had no
effect on his forecast. The Order, which does not discuss the full email exchange, further omits
the key facts that: (1) the meteorologist’s statement was on the morning of August 4, meaning
that it had no effect on the Company’s pre-storm classification or staffing levels; and (2) the
meteorologist’s correspondent, a meteorologist for the State University at Albany, concurred that
the Hurricane Center’s intensity analysis on August 4 was not necessarily focused on the most
relevant measurements.91
4. Con Edison Reasonably Complied with the Classification and Staffing Requirements
If the Commission determines that the Department raises a cognizable claim that the
Company violated the ERP’s classification and staffing requirements, the foregoing discussion demonstrates that the Company reasonably complied with the requirements.
The reasonable compliance standard requires utilities to be “reasonably diligent and energetic in attempting to accomplish what was ordered,”92 for example, by having a plan that
89 Id.; Cerruti Aff. ¶ 78.
90 Ex. CERRUTI-43 (“Yes, I added severe to my forecast this morning.”); Cerruti Aff. ¶ 79.
91 Ex. CERRUTI-43. (“I always get confused by the landfalling intensities too - and the fact we often tout observed gusts that match the sustained wind speeds as a verification of sorts in real-time. In fairness to NHC, during events the peak winds are often out over the water, so they may be technically accurate even if no one is really observing them.”).
92Aspira, 423 F.Supp. 647 at 654. 26
“reasonably assures” compliance with Commission requirements.93 As explained in the
preceding sections, the meteorologist made diligent and energetic efforts to develop a reasonable
and accurate forecast. And the Order does not connect its forecast allegations to any specific
ERP requirement.
In addition, Con Edison made diligent and energetic efforts to prepare for the storm, most
notably by pre-staging more restoration workers than ever before. The Company held daily
meetings to discuss the meteorologist’s weather and outage job predictions, canvass each operating region about its staffing needs, and consider other relevant factors. The Company’s efforts culminated in classification and staffing decisions that were reasonable based on the available information, including the ERP factors. And while the storm changed over time and did not arrive as initially predicted, reasonableness does not require perfection.
Moreover, before the storm the Company had plans in place to reasonably assure that it could supplement its workforce with additional restoration workers. First, the Company had on- site 74 “internal” or “blue sky” contractors who worked with the Company every day and were available for storms. Second, the Company had right-of-first refusal contracts for 70 contractors
(which the Company exercised in advance of Isaias). Third, the Company had a program to fly contractors in from distant states and equip them with trucks (which the Company exercised during the Isaias restoration). Fourth, the Company had retainer contracts with six contractor companies that set forth pre-negotiated terms and conditions and gave the Company access to up to five hundred contractors, depending on availability.94 Fifth, the Company had emergency
contracts with 44 contracting companies that established the companies’ qualifications and
93 Cassadaga Wind at 4.
94 Unlike the right-of-first refusal contracts, the contractors covered by these agreements are not legally bound to give Con Edison the first opportunity to acquire their services. 27
resolved administrative matters in advance. Sixth, the Company’s membership in the North
Atlantic Mutual Assistance Group gave it access to utility workers released by other utilities for
work in other service territories. These plans demonstrate that the Company responded seriously to its obligation to prepare for increased staffing needs.
Finally, Con Edison’s activation of its right-of-first refusal contracts to acquire 70 contractors on Friday and its acquisition of 120 restoration workers on Sunday demonstrate that the Company responded energetically to the storm. On Friday, the meteorologist predicted a low impact event. Nevertheless, the Company exercised its right-of-first refusal contracts out of an abundance of caution. Similarly, when the forecast changed on Sunday, the Company responded aggressively by staffing above required levels. The Order can try to second-guess the Company after the fact, but it cannot credibly argue that Con Edison did not take the storm seriously and did not immediately seek to staff up aggressively when the storm and its impact turned out to be worse than forecast.
C. Con Edison Reasonably Complied with the ETR Requirements
Con Edison is required to issue global, regional, local, and customer specific estimated times of restoration (ETRs) following major storms. The global ETR is the estimated restoration time for at least 90 percent of all interrupted customers. The regional ETR is the estimated restoration time for at least 95 percent of interrupted customers in a borough or county. The local ETR is the estimated restoration time for at least 95 percent of interrupted customers in each municipality. Customer-specific ETRs are self-explanatory.
The Order alleges five ETR violations across three categories. First, the Order alleges that Con Edison violated the ERP twice by using the phrase “vast majority” in press releases about the global and regional ETRs, even though the Commission approved using that exact
28 phrase in press releases when it approved Con Edison’s ERP.95 Second, the Order alleges that
Con Edison violated the ERP by issuing local ETRs that were identical to regional ETRs even though there is a good common-sense reason why they will often be the same.96 Third, the
Order alleges that Con Edison violated the ERP twice by failing to appropriately update ETR targets when Con Edison did in fact provide updates.97 In short, the Order does not point to any instance in which Con Edison actually violated the ERP, and the Order’s allegations do not provide a basis for commencing a penalty proceeding to determine if Con Edison failed to reasonably comply with ETR requirements.
1. The Phrase “Vast Majority” is Part of Con Edison’s Commission- Approved ERP and Cannot Be the Basis for a Violation
The Order alleges that instead of stating when the “vast majority” of customers would be returned to service, Con Edison should have referred to when “90 percent” of customers would be restored for the global ETR and “95 percent” of customers for regional ETRs. But the Order ignores that Con Edison was following its Commission-approved ERP when it used “vast majority” because Con Edison’s ERP includes a press release template that uses the phrase “vast majority” to describe estimated restoration times.98 There can be no penalty for acting consistently with the ERP.
95 Order at 25.
96 Id. at 25-26.
97 Id. at 26.
98 See Case 19-E-0742, Consolidated Edison Company of New York Electric Emergency Response Plan (2020 ERP Proceeding) Section 7.3.2, Press Releases (page 118 of 547) (filed May 8, 2020) (including the phrase “vast majority” in the Company’s press release template), approved in 2020 ERP Proceeding, Order Approving Amended Electric Emergency Response Plans (issued May 14, 2020).
29
Con Edison adopted the phrase “vast majority” in 2019 in response to the Department’s recommendation that each electric utility “develop procedures to have prominent language displayed on its outage map website that explains to customers what is meant by a global, regional, local, and job-specific ETR.”99 In its implementation plan, Con Edison stated that it would use the phrase “vast majority” whenever it publicly communicates ETR information because it is “reader-friendly”:
Based on customer research the Company will avoid using the term ‘global ETR’ when communicating with customers and the public, and instead will refer to an ETR for the “vast majority of customers,” which is more reader-friendly. Customers viewing the entire service territory on the outage map will see this language.100
The use of this phrase was based upon customer research, and neither the Department nor the
Commission objected to the Company’s plan when the Commission approved it.101 The Order thus seeks to penalize Con Edison for using Commission-approved language and the
Commission should dismiss these allegations.102
99 Case 19-M-0285, In the Matter of Utility Preparation and Response to Power Outages During the March 2018 Winter and Spring Storms, New York State Department of Public Service, 2018 Winter and Spring Storms Investigation, Recommendation 23, at 67 (April 18, 2019).
100 Case 19-E-0107, Proceeding On Motion of the Commission Investigating Utility Preparation and Response to Power Outages During the 2018 Winter and Spring Storms for Consolidated Edison of New York, Inc., 2018 Winter and Spring Storms Recommendations Implementation Plan, Consolidated Edison Company of New York, Inc., Appendix B: Individual Implementation Plans, Recommendation 23 (filed May 20, 2019).
101See Case 18-E-0717, Consolidated Edison Company of New York Electric Emergency Response Plan (2019 ERP Proceeding) Section 5.3.1 Press Releases (page 40 of 385) (filed July 11, 2019) (including the phrase “vast majority” in the Company’s press release template), approved in 2019 ERP Proceeding, Order Approving Amended Electric Emergency Response Plans at 8 (issued July 11, 2019) (finding that the utilities proposed ERPs “provide “clarifying language to assist customers in understanding what each ETR represents.”).
102 Finally, it should be noted that the Order (at 25) alleges that using this phrase potentially justifies a penalty because it does not communicate accurate information to customers and governmental entities. But this allegation ignores that the Commission reached a contrary conclusion in 2019, supra n. 101, and that the Company communicates customer specific ETRs to each customer and has ongoing discussions with municipal leaders regarding the status of restoration in their communities, during which the percentages are discussed to the extent relevant to the municipal leaders. See Schimmenti Dep. 169:12-23; 171:21-172:6. 30
2. Con Edison Reasonably Complied with its ERP on Local ETRs
The Order next alleges as one violation that Con Edison failed to follow its ERP because
on August 6 many municipalities received a local ETR that was identical to the regional ETR.103
The Order further alleges, without providing any evidence,104 that Con Edison issued local ETRs
that were “merely populated with the information from the regional ETR.”105 The Order’s
allegation is incorrect and is based on the mistaken premise that a local ETR can never be the
same as a regional ETR. Since Westchester County is made up of 39 individual municipalities, a
county-wide restoration effort can absolutely result in local municipalities having a similar or, in
this case, the same ETR.
During the storm, Con Edison developed a county-wide work plan for Westchester
because it is the most effective and efficient way to restore customers. The Company reviewed the outages in each municipality and determined, based on damage assessment, historical experience, and an engineering analysis of the work required to restore service, that the local
ETRs aligned with the regional ETR.106 The Company issued local ETRs on August 6 at 11:00
a.m. and thereafter refined them for 28 out of 39 municipalities based on additional crewing and
job data. In each case, restoration time was reduced.107 The Company’s continual refinement is
evidence that it was closely monitoring the local ETRs and more than reasonably complied with
the ERP.
103 Order at 25-26.
104 The Department’s Report cites to the Company’s response to DPS-6, Question 4, but fails to explain how this interrogatory response justifies its allegation.
105 Order at 25.
106 Part 105 Report at 24-25.
107 DPS 6-4. 31
3. Con Edison Reasonably Complied with its ERP on ETR Targets
The Order alleges two ERP violations for failing to appropriately specify ETR targets for
two days. According to the Order, on August 9 and 10 customers and municipal officials who
sought ETR information received the message “More Work Required.”108 The Order claims that this message was not an update because it provided “no meaningful restoration information.”109
First, contrary to the Order’s allegation, municipal officials did have appropriate and
specific ETR targets on August 9 and 10. In response to an interrogatory, Con Edison explained
that it issued a local ETR to all 39 Westchester municipalities on August 6 at 11:00 a.m. and
subsequently updated 28 local ETRs on August 7 at 5:00 p.m.110 All 39 local municipalities had estimated times of restoration for either August 9 or August 10.
Second, “More Work Required” is a reasonable explanation of the work status when more specific information is not available. Once specific and granular job status information is available, Company engineers and ETR personnel must analyze the new information to calculate a new ETR and they provide that new ETR as soon as they can (on average, that message was displayed for 90 minutes). As a result, “More Work Required,” in the context of the Company’s simultaneous communications efforts, does provide meaningful information. And, to avoid confusion, an explanation of “More Work Required” is provided in the frequently asked questions section of Con Edison’s outage map. Moreover, only three percent of the 330,000 customers that lost service saw the More Work Required message. This overall context demonstrates more than reasonable ERP compliance.
108 Order at 26.
109 Id.
110 DPS-6-4. 32
Third, municipal officials and customers did not lack ETR information as Con Edison
provides restoration information in several ways. For example, the Company provides training
to municipal officials on the use of the outage map. During storm restorations, municipal
officials can access the summary page on the outage map to see all Con Edison customer outages
in all municipalities in Westchester County. For each municipality, the Company displays the
total number of customers that reside in that municipality and the total number of customers that
remain out of service. This detailed data provides significantly more data than can be included
in a published ETR. In addition, Con Edison provided municipal liaisons to assist municipalities
with questions and conducted phone calls with municipal officials. Finally, throughout the
restoration, customers had constant access to the Company’s Outage Map, which allowed them
to check their individual outage status, as well as see the ongoing outages in their surrounding
community and throughout the Company’s service territory.
In sum, Con Edison personnel worked continuously during the restoration to review,
update, and provide ETRs to customers and local municipalities. The Order does not take this
full picture into account and, accordingly, ignores Con Edison’s reasonable compliance with the
ETR requirement.
D. Con Edison Reasonably Complied with the IVR Requirements
During a major storm, customers who call Con Edison’s toll-free phone number will encounter the interactive voice response (IVR) system and hear a recorded message that provides important information. The Order alleges that Con Edison violated the ERP twice by not updating its IVR message within one hour of a press release and once by not updating its IVR message to include charging and cooling center information that appeared in a press release “on
33
or about” August 6.111 The Commission should dismiss each allegation because Con Edison
reasonably complied with the ERP and the Order fails to allege or show otherwise.
1. Con Edison Reasonably Complied with the IVR Update Deadlines
The ERP requires Con Edison to update its IVR within one hour of issuing a press release. The Order alleges that Con Edison violated this requirement twice – first, by updating its IVR message three minutes late, and a second time by updating its IVR message 26 minutes
late. The Commission should find without the need for further investigation that Con Edison
reasonably complied with the deadline on both occasions and dismiss the allegations.
First, reasonable compliance requires only that a utility be “reasonably diligent and
energetic in attempting to accomplish what was ordered,” for example, by having a plan that
“reasonably assures” compliance with ERP requirements. Con Edison has a plan in place to
comply with the update deadline (the Crisis Communications Plan) and this plan was in effect
during the storm. During the storm, Con Edison updated its IVR message 28 times.112 The average time between a press release and an IVR message update was under 28 minutes, less than half the time allowed by the deadline. These facts show that the Company made diligent and energetic efforts to comply with the deadline and therefore satisfied the reasonable compliance standard.
Second, the update delays were de minimis and do not negate Con Edison’s reasonable compliance or trigger the Commission’s penalty authority. Reasonableness does not require perfection and two $3.1 million penalties are not justified because of slight delays in updating the
IVR message.
111 Order at 21.
112 Note that there were 36 total press releases but eight of them did not result in the Company having to update the IVR message. 34
Moreover, the delays did not frustrate the purpose of the deadline or otherwise harm customers. Customers who heard the August 7 IVR message before the update received the same relevant Isaias-related information as customers who heard the messages after. Similarly, customers who heard the August 10 message before the update heard outdated outage numbers, but the rest of the message was verbatim.113 The deadline is intended to maintain consistency between press releases and IVR messages. Here, the delayed updates did not result in material inconsistencies. Under the circumstances, Con Edison was in reasonable compliance because two (of 28) IVR messages were updated a total of only 29 minutes late.
2. Con Edison’s IVR Message Was Consistent with the Company’s Press Releases
The Order alleges that Con Edison violated the ERP by not updating its IVR message to include charging and cooling center information that appeared in a press release “on or about”
August 6. But Con Edison is not required to include charging and cooling center information in its IVR messages. The only relevant ERP requirement is that the Company keep its press releases and IVR messages “consistent.” 114 And Con Edison met that requirement. The first and only Company press release that provided information on both cooling and charging centers was on August 11 at 12:50 p.m. That press release listed cooling and charging centers operated by multiple Westchester County municipalities and noted that New York City would have its cooling centers open. By the time of the August 11 press release, Con Edison had already updated its IVR message to refer callers to the Company’s website for such information.
Starting on August 9, the IVR message referred callers to Con Edison’s website for information
113 Specifically, the prior message from August 9 at 8:30 p.m. stated: “Currently, Westchester County has 21,000 customers out; the Bronx, 2,100; Staten Island, 100; Brooklyn 500 and Queens has 4,100 customers out.” The August 10, 11:06 a.m. message stated “Currently, Westchester County has 15,000 customers out; the Bronx, 650; Brooklyn 400 and Queens has 2,800 customers out.”
114 ERP, section 8.3.1 (listing the requirements for an IVR message). 35 about “Open Municipal Emergency Centers.”115 An IVR message referring callers to information about “Municipal Emergency Centers” is consistent with a press release referencing municipally-run charging and cooling centers. To argue otherwise would impermissibly “split hairs and quibble over fair meanings.”116 Because the reference to “Municipal Emergency
Centers” was already part of the IVR message on August 11, there was no need for Con Edison to make changes to reflect the August 11 press release.117
Moreover, in complying with the consistency requirement, it was reasonable for Con
Edison to consider the Department’s preference for brevity. Following Winter Storms Riley and
Quinn, the Department recommended that Con Edison “ensure that concise, comprehensive, and accurate information is being provided in all IVR messaging.”118 The Company complied by revising the ERP to state that “[i]n order to keep the IVR message concise (at most, 60-90 seconds in length), customers will be directed to the Company website (www.conEd.com) to obtain more detailed information regarding [a specific list of areas].”119 While charging and cooling centers are not on that list, and therefore not strictly governed by the requirement, it was reasonable for Con Edison to consider the ERP’s and the Department’s preference for brevity in complying with the consistency requirement.
115 See the Company’s response to DPS-4-2 at 10 for the August 9 10:57 a.m. IVR message.
116 Blum v. Nassau Purchasing & Bldg. Corp., 256 N.Y. 232, 235, (1931) (holding that minor errors on a tax map and tax deed do not render them sufficiently inaccurate under the relevant statute to invalidate a tax assessment).
117 At a minimum, Con Edison’s use of “Municipal Emergency Centers” is reasonable compliance with the consistency requirement. A reasonable person hearing “Municipal Emergency Centers” would understand it to include municipally-run charging and cooling centers and would therefore regard the IVR message and the press release as consistent.
118 Case 19-M-0285, In the Matter of Utility Preparation and Response to Power Outages During the March 2018 Winter and Spring Storms. 2018 Winter and Spring Storms Investigation (issued April 18, 2019), Recommendation 76 at p. 140.
119 ERP section 8.3.1 (listing the requirements for an IVR message). 36
E. Con Edison Reasonably Complied with the Call Center Staffing Requirements
During a storm, customers may contact Con Edison through its toll-free customer service number and speak to a customer service representative. The Order alleges that Con Edison violated the ERP once on August 4 and again on August 5 because customer service representatives did not answer 80 percent of incoming calls within 90 seconds.120 But the Order
ignores that the ERP establishes required staffing levels that the Commission approved as
adequate and reasonable to meet the 80 percent target and that on both days Con Edison staffed
far above them. On August 4, the Company classified the storm as “Serious,” which requires
110 customer service representatives during the day, 90 in the evening, and 20 overnight. The
Company had 375 during the day, 140 during the evening, and 22 overnight. On August 5, the
Company upgraded the event classification to “Full Scale 3B,” which requires 325 customer
service representatives during the day, 150 during the evening, and 25 overnight. The Company
had 430 during the day, 261 during the evening, and 25 overnight. Not only did the Company
comply; it built in a buffer to handle the rush of calls. That this overstaffing was still not enough
for the Company to answer 80 percent of calls in 90 seconds for two days does not provide a
basis for commencing a penalty proceeding.
F. Con Edison Reasonably Complied with its LSE Requirements
Within 24 hours of a major storm, the ERP requires Con Edison to either contact or refer to an emergency services agency 100 percent of affected Life Support Equipment (LSE) customers. The ERP also sets a goal of reaching out to and successfully contacting 80 percent in the first 12 hours and requires a second attempt for any customer the Company does not
120 ERP, section 8.3.2 Call Center Staffing(“[d]uring a major storm and/or incident, Call Center staffing is adjusted to be able to answer at least 80% of emergency service calls within 90 seconds”). The Company notes here that it always strives to achieve this goal even though it may not be able to do so for some storms right after it hits due to an unanticipated impact. 37
successfully contact. Based on information self-reported by the Company, the Order alleges that
Con Edison did not: (1) meet the 80 percent target; (2) make a second attempt to contact all relevant customers because it missed one out of 503 customers; and (3) referred 22 customers to an emergency services agency after the 24-hour deadline.
The Commission should find that Con Edison reasonably complied with the ERP. First, with respect to the 80 percent target, the Company staffed above required levels,121 made two
attempts to contact all but one of the 1,033 affected customers,122 and in total connected with 70
percent. The Company cannot control who picks up the phone, so its preparation and diligence
in making calls establish reasonable compliance to the extent that this is a requirement and not a
goal. Indeed, the ERP implicitly recognizes this possibility by only requiring the Company to
make two phone call attempts during the first 12-hour period.
Second, the Company achieved a 99.6 percent compliance rate with the second attempt
requirement. The Company made all but one of the 503 required calls within the 12-hour time
frame. That near-perfect performance is prima facie evidence of reasonable compliance,123
demonstrating that the Company was more than “reasonably diligent.”
Third, referring less than three percent124 of affected customers to an emergency services
agency within a few hours of the deadline was reasonable under the circumstances. On average,
121 Specifically, for a storm that more than 500 LSE customers are affected the Electric ERP has minimal staffing of 61. As described in response to DPS-12-1, on August 4 Con Edison had 64 representatives responsible for and/or assigned to communications with affected LSE customers.
122 The Company had referred one other customer to an emergency services agency five hours after that customer lost service. The Company has since determined that the customer also called the Company back.
123 Cf. Aspira, 423 F.Supp. 647 at 651 (“The court is not empowered to command, any more than it can pretend for itself to achieve, performance approximating perfection.”). 124 As noted in the Department Report, of 1,033 affected LSE customers, the Company reached or referred 1,011 (97.9 percent) within 24 hours.
38 the delay was less than four and a half hours, and the longest delay was nine and a half hours.
Because the Company had (and continues to have) a policy in place to monitor LSE communications, the average time to refer an LSE customer was nine hours and fifteen minutes –
14 hours before the 24-hour deadline. And because of that policy, it discovered and corrected the delays with respect to these 22 customers. That the Company has a policy in place and that the policy resulted in the Company identifying and correcting the delay here demonstrates that it reasonably complied with the requirement.125 Isolated delays in compliance do not negate reasonable compliance.126
In addition, the Company’s performance was more than reasonable considering its extensive LSE communications. On August 3, the day before the storm, the Company sent automated telephone messages to all 6,495 registered LSE customers warning them about the storm, recommending that they make alternative plans in the event of a service interruption, and giving them a priority toll-free contact number. Then, from August 4 through the end of restoration, the Company sent daily automated phone messages to all LSE customers that the
Company had not restored. Thus, overall LSE customers received the information they needed to make plans.
125 See CVS Corp., 2008 WL 1775410 (finding that CVS reasonably complied with an injunction forbidding it to sell counterfeit products even though sales continued at thirty-nine stores in eight states because, notwithstanding human error, CVS had taken reasonable steps to comply.).
126 Aspira, 423 F.Supp. at 651 (“The fact that goals were not achieved, or achieved only partially and tardily, is not in itself grounds for . . . critici[sm].”); Rodriguez v Herbert, 270 AD2d 889, 889 (4th Dep’t 2000) (finding reasonable compliance where a prison disciplinary hearing commenced in violation of the rule that a hearing could not commence until 24 hours after the inmate met with his assistant and the hearing officer stopped the hearing, allowed the inmate to meet with his assistant, and resumed the hearing two days after); Duquin v. Dean 423 F.Supp.2d 411 (S.D.N.Y. 2006) (finding reasonable compliance with a consent decree where the State failed to provide complete access to hearing-enabled facilities in all areas of a prison but had diligently attempted to comply with the consent decree in a reasonable manner and was quick to remedy any deficiencies in response to prisoner complaints). Wallace v United States, BK 3-2077, 1979 WL 1307 (N.D. Tex Feb. 15, 1979) (holding that a tax return filed 11 days late was filed in reasonable compliance with the law.). 39
G. There is No Basis for a Prudence Action
The Commission should also refrain from commencing a prudence action. As explained above, the test for prudence is like the test for reasonable compliance because reasonableness is the touchstone for both standards. The Court of Appeals has explained that “[a] utility’s decision is prudent if it acted reasonably based on the information that it had and the circumstances that existed at the time,” not whether it could have adopted a different course of action:
A decision may be viewed as prudent even though a different course of action would ultimately have been more advantageous to the utility or its ratepayers. In this regard, hindsight is irrelevant to a prudence analysis because the utility must make a determination that addresses its business prospectively. Thus, if more than one course of action was reasonable at the time of decision making, the utility may choose among them. The PSC cannot overturn a prudent decision by a utility because it believes that another course of action would have been preferable.127
The Commission should therefore decline to commence a prudence action for the same reasons
that the Commission should dismiss the allegations and terminate this proceeding.
127 In the Matter of National Fuel Gas Distribution Corporation v. Public Service Commission, 16 NY3d 360, 368 (March 29, 2011). 40
III. CONCLUSION
Wherefore, for the reasons set forth above, Con Edison respectfully requests that the
Commission128 decline to commence a penalty or prudence action against the Company and terminate this proceeding.
Respectfully submitted,
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
By: /s/ Richard B. Miller Richard B. Miller Joshua A. Konecni David Warner Walter Hedeman 4 Irving Place New York, New York 10003 212-460-3389 [email protected]
Frances E. Bivens Michael Scheinkman DAVIS POLK &WARDWELL LLP 450 Lexington Avenue New York, New York 10017 [email protected] [email protected]
Dated: December 21, 2020
128 The Order purports to delegate to the Department of Public Service “discretion concerning next steps, including that it may hold an evidentiary hearing to demonstrate why any proposed penalty or penalties under PSL § 25-a should be assessed.” Order at 34. But as the Commission correctly noted in Ordering Clause 1 at 37, it is for the Commission, and only the Commission, to determine, after receiving Con Edison’s response to the allegations, whether to commence a penalty or prudence action. The Department cannot make that determination on its own. This is especially so here – where many of the allegations, especially the 20 allegations related to the weather forecast, fail to provide sufficient detail as to the precise nature of each allegation. In this regard, the Order purports to satisfy, but falls short of the requirement in PSL § 25-a (2)(b)(i) to set forth “a brief description of the facts and nature of each act or failure to act for which [a] penalty is proposed.” The Commission should therefore further review the allegations and the Company’s response before determining whether it is appropriate to initiate further proceedings. Similarly, the Department may not supplement these allegations without an additional Commission order, as the Order suggests. Order at 13, n. 18. 41