Utility Will Pay $53M for Fatal Blasts That Rocked Massachusetts

BOSTON (CN) — The energy company responsible for a series of 2018 explosions in northern Massachusetts agreed Wednesday to cease all business in the Bay State as part of a $53 million settlement with the U.S. Department of Justice.

The settlement requires Columbia Gas of Massachusetts to plead guilty in federal court for violating the Natural Gas Pipeline Safety Act by failing to implement procedures that could have prevented the overpressurization of its natural gas system. Columbia, which does business as Bay State Gas, has yet to formally appear at a plea hearing.

Doug Sheff, right, an attorney for the family of Leonel Rondon, pictured at left, speaks during a Oct. 25, 2018, news conference in Boston. Rondon died Sept. 13, 2018, in Lawrence, Mass., after the chimney of an exploding house crashed on to his car and crushed him. The U.S. Attorney’s office in Boston announced Wednesday that Columbia Gas Columbia agreed to plead guilty to violating the Pipeline Safety Act following an investigation into the catastrophic gas explosions. (AP Photo/Steven Senne, File)

The $53 million criminal fine represents twice the amount of profits that Columbia Gas earned between 2015 and 2018 from a pipeline infrastructure program called the Gas System Enhancement Plan, according to information from the Department of Justice.

In addition to a fine, Columbia Gas faces three-year probation period during which its operations will be monitored to ensure compliance with U.S. and state safety regulations.

NiSource, the Indiana-based parent company of Columbia Gas, has also agreed to sell off Columbia Gas. The company said that it would no longer do business in Massachusetts and also agreed to forfeit any profits that may come from the sale of Columbia Gas.

According to the charging documents, during the afternoon of Sept. 13, 2018, the over-pressurization of a low-pressure gas-distribution system in South Lawrence caused multiple fires and explosions in the communities of Lawrence, Andover, and North Andover. As a result, one individual in Lawrence was killed and another severely disabled, 22 people were injured, and approximately 131 residential homes and commercial buildings were damaged.

Columbia Gas is accused of disregarded a known safety risk related to regulator control lines, which ensures that natural gas lines stay at the proper pressure. The company failed to relocate the regulator line after a major pipe replacement project.

Executives at Columbia Gas knew about the company’s failure to account for control lines, following a 2015 internal company notice on the matter, according to the Department of Justice.

As part of its settlement with NiSource, the Justice Department acknowledges that the energy company has already begun making restitution payments to victims in Merrimack Valley and that the company has agreed to resolve all pending civil claims.

Most of the $53 million fine will be directed to the Justice Department’s Crime Victims Fund, which is a major funding source for victim services throughout the United States.

“We take full responsibility for the tragic events of September 13, 2018 that so impacted our customers throughout the Merrimack Valley,” a spokesman for Columbia Gas said in a statement. “Today’s resolution with the U.S. Attorney’s Office is an important part of addressing the impact. Our focus remains on enhancing safety, regaining the trust of our customers and ensuring that quality service is delivered.”

Senator Ed Markey, who is currently running for re-election in Massachusetts, called the fine “a slap on the wrist,” in a social media post.

“It will not do nearly enough to dissuade other massive billion-dollar energy companies from future negligence,” Markey said. “Our natural gas pipeline infrastructure is a ticking time bomb unless we pass my Leonel Rondon Pipeline Safety Act and class the regulatory safety loophole.”

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