Con Edison Compensation for 2006 Queens Blackout
In our Consumer Watch today, imagine mid-July with no lights, no fridge, no air-conditioner. The 2006 Queens blackout left 174,000 residents suffering that wave for 10 days. Since then what’s got overheated is the debate over the compensation Con Ed should pay its customers. Janelle Burrell reports.
It’s been nearly two years since the blackout. And it’s still a topic of bitter contention.
“There were businesses that lost…went out of business, there were people who lost a lot of food… So no, it’s no compensation at all,” said Jim Paolino, a Queens resident.
Jim’s talking about Con Ed’s 17-million-dollar offer, reported by The Daily News, to Queens residents and businesses affected by the blackout….
The Daily News report, based on an internal source at Con Ed, estimates the payout to be about 100 dollars per person.
The report has left residents and business owners furious.
“Toilet paper, that’s what it is. Money for toilet paper, that’s all a hundred dollars is good for,” said Maria Pakkou, the owner of Mini Star restaurant on Steinway Street.
Maria Pakkou has owned Mini Star restaurant in Astoria for 16 years. The blackout left the Mini Star with no refrigeration. Maria was forced to throw out nearly 20,000 dollars worth of food.
“It happened on a Wednesday and that’s like the day we usually make sure we have everything in stock for the weekend,” said Pakkou. “And then our insurance doesn’t cover like this kind of damage because it’s internal. It’s not like external.”
Most business owners would think that their insurance policies cover them for situations like blackouts, but in fact, in order to claim reimbursement, they would have to negotiate a specific clause beforehand.
“The thing to look for in the future and the thing to avoid this problem from happening again is insurance, insurance, insurance,” said Diane McFadin, a commercial litigation attorney.
McFadin says businesses should have the most comprehensive coverage plans they can afford. That means not only general liability insurance, but also inventory protection coverage, which would cover for food spoilage and a business interruption policy for losses suffered during extended periods when the business is unable to operate. But for small business owners like Maria who feel that Con Ed should be held liable, McFadin says a class action suit should be considered.
“If a group of them can get together and pool their resources, they might be able to bring a successful litigation against Con Ed,” said McFadin. “And if they’ve got a good case, they wouldn’t have any trouble finding a good lawyer that would love to sue Con Ed.”
For Maria, the outcome has already been decided.
“Con Edison won. We lost because we’re the little people, they’re the big people,” said Pakkou.
Con Ed has not yet given word on when or if they will reach a settlement. Janelle Burrell, Columbia News Tonight.
Latest development since April 18, 2008
Con Ed settles complaints over 2006 blackout
THE ASSOCIATED PRESS
Thursday, April 24th 2008, 1:47 PM
Residential customers who lost power for up to 10 days during a sweltering summer blackout in 2006 would receive a one-time payment of $100 from Consolidated Edison under a settlement proposed Thursday by the private utility.
The $17 million proposal includes payments of $350 for some large businesses, according to paperwork filed with the state’s Public Service Commission.
The money would be distributed in the form of a credit on an upcoming bill.
Con Ed critics were sharply split over whether the payment would amount to anything more than a slap on the wrist for the giant utility, which was accused by some of failing to properly maintain its aging electrical network and mismanaging its response to the blackout in Queens.
State regulators said about 174,000 people lost service or experienced low voltage during the crisis, caused by the simultaneous failure of several major electrical feeder cables.
Many residents are still angry.
“There is a large segment of our group that did not want to settle at all,” said Alyssa Bonilla, a leader of the Western Queens Power for the People Campaign, which helped negotiate the deal with Con Ed.
She said the group decided to settle because state law limits how much residents can recover from a utility, and, without a deal, there was no guarantee that any fines ordered by the state would end up going directly to customers.
“This is all we could get,” she said.
The city, Con Ed and state Assemblyman Richard Brodsky, of Westchester County, all signed on to the settlement, which still needs to be approved by the Public Service Commission.
A regulatory complaint against the utility would be dropped in exchange for the payments. Residents and business owners with legal claims against the utility would be free to continue pursuing them.
Some Queens lawmakers criticized the proposal as inadequate.
State Assemblyman Michael Gianaris, D-Queens, called the $100 payments “a slap in the face.”
“If they think they are going to make anyone happy with this level of compensation, they’ve got another thing coming,” Gianaris said.
“That doesn’t even cover the rate increases that Con Ed has socked us with since the blackout,” said City Councilman Peter Vallone Jr. of Queens.
Con Edison said in a statement that it regretted the hardships caused by the power failure and is committed to improving its systems.
“As we said at the time, our performance during the event did not meet the standards we set for ourselves, nor the expectations of our customers,” the company said.
As part of the settlement, Con Edison also promised not to seek a rate hike to cover the cost of $40 million in upgrades performed after the blackout.