State: Columbia Gas Must Pay Another $56 Million For Blasts

Massachusetts Attorney General Maura Healey and the Baker administration this week announced a settlement with Columbia Gas that makes parent company NiSource pay $56 million for its role in the deadly Sept. 2018 Merrimack Valley gas explosions. The agreement also orders the utility to leave Massachusetts by the upcoming heating season.

Under the terms, NiSource will pay $56 million for the creation of an Energy Relief Fund to help 26,000 low-income customers across the company’s three service territories. The money will wipe out nearly $15 million in accumulated debt on household gas bills. The remaining funds will be devoted to the Merrimack Valley for clean energy programs and grants for homeowners, tenants, businesses, and municipalities.

Columbia Gas by Nov. 1 must also transfer all of its assets to Eversource for $1.1 billion and leave the state.

Separately, in February, the utility company agreed to pay $53 million in a plea deal with federal proseuctors. The company admitted responsibility for the gas explosions that killed one individual, injured 22, and damaged 131 homes and businesses. Just last week, a federal judge approved that deal. U.S. Attorney Andrew Lelling announced that Columbia Gas "acted with reckless disregard for safety by cutting corners and relying on lax protocols."

That settlement also had Columbia, also known as Bay State Gas, folding its cards in Massachusetts. Lelling said back in February that affected communities wanted Columbia Gas "to simply go away."

The National Transportation Safety Board last year concluded that Columbia Gas was responsible for the Sept. 13, 2018 explosions and fires that killed one, injured dozens, and destroyed neighborhoods in Lawrence, Andover, and North Andover.

“The Merrimack Valley gas explosions were heartbreaking and disruptive for the lives of thousands of families and businesses – many of whom are still recovering,” said Healey in a statement. “Today’s first-of-its-kind agreement ensures that Columbia Gas never does business in Massachusetts again, invests millions of dollars in the Merrimack Valley, and helps low-income customers pay their gas bills."

Moving forward, Eversource must implement a comprehensive safety and reliability program, address any issues remaining from Columbia’s pipeline safety violations, and fund a heat pump pilot for customers impacted by a separate natural gas service moratorium in Western Massachusetts.

Eversource must develop a clean energy analysis to ensure that its business strategies are consistent with the state’s greenhouse gas emissions reduction requirements, Healey said.

The settlement provides rate relief. It extends the rates set in 2015 through November 2021 and requires Eversource to return to customers more than $6.7 million in savings from the Tax Cuts and Jobs Act. It requires Eversource to spread the impact of its next rate increase over two years: $6.3 million in November 2021 and $16.7 million in November 2022.

“I want to thank Attorney General Healey for taking money out of the hands of Columbia Gas and putting it back into the impacted residents who to this day, are still trying to recover from the effects of the gas fires,” said Lawrence Mayor Dan Rivera. “This is another step towards justice, and an opportunity for our community to continue to heal.”

Rivera said he looks forward to a new heating season with Columbia Gas at the helm.

The blasts resulted in some reforms. On December 31, 2018, Baker signed legislation that required all natural gas work in Massachusetts that could pose a material risk to public safety be reviewed and approved by a certified professional engineer. Last year, all natural gas companies in Massachusetts also agreed to adopt comprehensive pipeline safety management standards. Also, Eversource moving forward as a gas utility must work within the state's goals to mitigate climate change.

“This settlement will support the affected communities by improving and maintaining safety in the region, increasing clean energy and energy efficiency measures and providing rate relief to low-income customers," said Baker in a statement.

The settlement agreement resolves the AG’s investigation into Columbia Gas for violations of the state’s consumer protection laws, and also resolves the DPU’s formal investigation into the company’s pipeline safety compliance and emergency response.

This matter was handled by Assistant Attorneys General Matthew Saunders, Donald Boecke, Ashley Gagnon, Elizabeth Mahony, Joe Rogers, Deputy Division Chief Nathan Forster, Division Chief Rebecca Tepper, and Analyst Tim Newhard, all of AG Healey’s Energy and Telecommunications Division.

Mary Serreze can be reached at mary.serreze@townsquaremedia.com