In July 2006 a major electrical outage occurred in Queens. The outage was far broader than initially disclosed by Con Edison, and it lasted several days. The PSC commenced an investigation. Con Edison issued reports on the outage, as did the staff of the Department of Public Service. The staff report recommended on February 7, 2007 that the PSC undertake a prudence investigation of the utility conduct. In an April 18, 2007 order, the PSC initiated a prudence investigation phase of the case. For more background, see Queens Power Outage Update, February, 2007, and The Queens Blackout, August 10, 2006.
The Administrative Law Judge issued procedural rulings regarding the scope of the case, and parties filed their assertions. PULP raised a number of issues in its filing, including known conditions in the system that had overloaded secondary mains in the area where a fire triggered a series of cascading events that led to outages, whether the system had sufficient reactive power, whether Con Ed lacked sufficient information regarding the status of the system, whether the system was often run at its reliability design limits, and whether Con Edison lacked sufficient information regarding large numbers of submetered customers and any special medical needs they may have. Many of the papers in the case are available here and at PULP's website page on the 2006 Queens outage.
Settlement discussions ensued. When no resolution was reached, the ALJ on February 8, 2008 issued an order requiring Con Edison to file testimony by March 14, 2008 to justify its claim that it acted prudently.
The ALJ's Ruling on Scope of Company Testimony, Schedule, and Discovery included in the scope of issues whether Con Edison had acted with "gross negligence," as requested by the Attorney General. A finding of "gross" negligence could make Con Edison liable to its customers for their damages due to the blackout, because the Company's tariffs only exclude liability for ordinary negligence. In addition, the ALJ's ruling requires Con Edison to come forward with evidence to justify its prudence on numerous issues the Company had sought to exclude from the scope of the case.