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National Grid Electric Services Case Study

Getnick Law and the New York Attorney General’s Office secured a $6 million settlement against National Grid in a groundbreaking whistleblower case.

New York False Claims Act Lawsuit Uncovers Fraud

Getnick Law filed a qui tam lawsuit under the New York False Claims Act against National Grid Electric Services LLC, a utility company that provides natural gas and electricity to homes and businesses in New York, Rhode Island, and Massachusetts, as well as electrical services in other areas of the Northeast.

The lawsuit alleged that, from 2007 to 2013, National Grid managed and operated the Long Island Power Authority’s (“LIPA”) electrical transmission and distribution network. LIPA is the not-for-profit public utility that owns the electricity transmission and distribution system on Long Island. It provides electricity to more than 1.1 million residential and commercial customers in Nassau and Suffolk counties, and on the Rockaway Peninsula of Queens. National Grid’s contractual obligations to New York State included rendering bills to, and collecting payments from, customers, and remitting those payments to the State by paying them to LIPA.

The Settlement Agreement explains that National Grid failed to meet its contractual obligations by allowing excessive “Advanced Consumption” and reporting falsely to LIPA about it for several years. Advanced Consumption occurs when electricity flows to a location, but no one is billed for it or pays for it. While there are instances where limited Advanced Consumption occurs in the normal course of a utility’s business, for example, in the transition between successive tenants in a rental property, what the whistleblower discovered in this case was a multi-million dollar fraud where National Grid mismanaged the State’s electricity and then made false reports to LIPA to cover up its conduct. LIPA was harmed, as were all National Grid customers who diligently paid their electric bills.

Getnick Law partners Margaret Finerty, Richard Dircks, and Neil Getnick, together with Counsel Stuart Altschuler, worked closely with the Attorney General’s Office in the prosecution and resolution of this case.

$6 Million Settlement

As a result of the brave actions of our whistleblower client, Getnick Law, along with the New York Attorney General, secured a $6 million settlement from National Grid to resolve these claims. This resolution marked the first time that the New York False Claims Act was applied to an electrical utility company. The settlement funds were used to aid low- and moderate- income Long Islanders modernize and replace their heat pumps, which will help lower energy costs and utilize cleaner energy options. The whistleblower received 23.5% of the government’s recovery as an award. At the time, this was the largest percentage that had been paid in any non-Medicaid New York False Claims Act case in which the State elected to supersede. Getnick Law achieved the same percentage award for another whistleblower client in a prior case. The whistleblower’s identity has remained protected.

Related Materials:

  • Press Release From the New York Attorney General, September 27, 2021 (“The investigation began with a whistleblower lawsuit filed under the qui tam provisions of the New York False Claims Act, which allows people to file civil actions on behalf of the government and share in any recovery. The whistleblower here will receive $1.41 million of the proceeds for bringing National Grid’s misconduct to light.”)
  • Stipulation and Settlement Agreement, June 24, 2021
  • Grid to Pay $6M to Settle Charges of Falsely Reporting Energy Use, Newsday, September 27, 2021 (“Margaret Finerty, a lawyer for the whistleblower, said in a statement, ‘Public utilities hold a unique position of trust in our society and directly impact the lives of their customers. This case makes plain that when that trust is violated in New York State, there will be meaningful consequences.’”)
  • National Grid to Pay $6M Over NY Electric Misrepresentations, Law 360, September 27, 2021 (“Margaret Finerty of Getnick & Getnick, which represented the whistleblower in the case, said that the settlement reflects that there must be consequences when the public trust is violated by utilities. The whistleblower, who remains anonymous, will receive 23.5% of the government’s recovery in the settlement.”)
  • NYAG: $6M Settlement With National Grid, Long Island Business News, September 27, 2021 (“The Attorney General’s office learned about the case from a whistleblower, who is represented by Getnick & Getnick, a New York-based law firm.”)
  • AG Reaches Settlement With National Grid Over LIPA Fraud, Patch, September 27, 2021 (“A whistleblower lawsuit launched the investigation. The lawsuit was filed as part of the New York False Claims Act, which allows citizens to file civil actions on behalf of the government, and share in the recovery. The unnamed whistleblower in this case will receive $1.41 million.”)