A group of Democratic lawmakers from New England castigated executives from the NiSource Inc. utility family and criticized federal regulation, saying in a public field hearing that the nation needs stricter safety rules and higher corporate penalties for gas utilities in the wake of deadly explosions and fires in Massachusetts.

Calling federal pipeline safety regulatory standards "alarmingly deficient," Sen. Edward Markey, D-Mass., said federal legislators "owe it to the American people to put in place requirements to ensure that no natural gas company is allowed to shortchange safety again."

Sen. Elizabeth Warren, also a Massachusetts Democrat, echoed her colleague's sentiments during and after the Nov. 26 hearing in a school gymnasium in Lawrence, Mass. — one of the three communities hit by deadly explosions caused by over-pressurization on NiSource utility Columbia Gas of Massachusetts' system.

"This industry has proven that safety is not its top priority," Warren said in front of a few hundred people at the hearing. "If they won't do what is right, we should make sure the laws and regulations compel them to do what is right."

The U.S. Pipeline and Hazardous Materials Safety Administration, or PHMSA, the federal agency tasked with setting minimum pipeline safety standards and overseeing their enforcement, will soon be up for congressional reauthorization. Reauthorization legislation has historically been a key avenue for federal lawmakers to require PHMSA to put in place stricter rules.

Markey on the sidelines of the hearing said that "all the issues" that have come to light in investigating the Sept. 13 explosions and fires will come into play as federal lawmakers consider the agency's reauthorization.

PHMSA still has outstanding congressional mandates that it has not completed from the 2011 act that reauthorized the agency's statutory authority. Sen. Maggie Hassan, D-N.H., said during the hearing that she wants to see PHMSA "guarantee" that the agency will be "initiating and pushing in ways you haven't in the past," including requesting more resources from Congress if necessary to carry all outstanding mandates and to tackle any new ones that may come out of the upcoming reauthorization.

Company accountability

"I am here on behalf of Columbia Gas and NiSource to apologize. We are deeply sorry. I am deeply sorry," Joseph Hamrock, NiSource's president and CEO, said during the hearing. "I want to tell you all personally that I am sorry and that I know that an apology is ... not enough."

The lawmakers repeatedly questioned whether Hamrock and Columbia Gas of Massachusetts President Steve Bryant should retain their positions or receive their full compensation.

Hamrock's total cash compensation for 2017 was $2.78 million, along with noncash compensation of $2.62 million, according to S&P Global Market Intelligence data. Of the cash compensation, his base salary totaled $943,750, with a bonus of $87,750. Hamrock said he had recommended to the board that he not receive a bonus for 2018.

A preliminary investigation into the disaster found that a utility-contracted work crew — in carrying out one of the Columbia Gas of Massachusetts' designed and approved pipe replacement projects — left live gas pressure sensors on an abandoned line. Because the abandoned line had no gas flowing through it, the sensors detected abnormally low pressure, causing valves to send excessive gas through newly installed pipe. The resulting fires and blasts in Lawrence, Andover and North Andover, Mass., killed one person, sent at least 21 people to the hospital and damaged 131 structures.

The utility's plans for the pipe upgrade project did not consider the sensors, even though the plans went through the utility's constructability review. The utility, NiSource and the state do not require a certified professional engineer to review utility work plans.

Hamrock said he was not aware that it was a common practice at NiSource subsidiaries to allow work plans to go forward without a professional engineer's review. Bryant said he was aware but noted that this is standard practice in the industry.

Rules to change

The Massachusetts senators keyed on recommendations from Richard Kuprewicz, a pipeline safety expert and president of consulting firm Accufacts Inc., that PHMSA and its state pipeline safety oversight partners move away from so-called performance-based standards that give companies more leeway to determine how positive safety outcomes should be reached.

Kuprewicz argued during his testimony that federal regulators should require utilities to use digital maps for risk management and should codify "management of change" requirements under which companies should anticipate threats that could arise when they are making changes to their systems.

"The standard which is applied right now is inadequate," Markey said. "There should be a more prescriptive, more detailed set of regulations put on the books to make sure that no natural gas company in the United States is in any way questioning what the standard should be, and if they violate it, they're going to pay a penalty."

Markey and Kuprewicz also contended that existing penalty levels are too low to serve as effective deterrents of unsafe practices. Kuprewicz, who said he has investigated "too many" pipeline incidents with multibillion-dollar consequences, said safety violation penalties need to be high enough to change corporate culture.

Mass. Gov. Charlie Baker recently proposed a bill that would require engineering plans for gas utility work to be reviewed and approved by a certified engineer, which followed the National Transportation Safety Board's release of urgent federal safety recommendations.

The day of the hearing, the American Gas Association released a resource for operating procedures, proper equipment design and other safety practices aimed at preventing gas system overpressurization. The document detailed best practices for gas distribution system and pressure detection equipment designs, system monitoring, record-keeping, damage prevention, field oversight and overpressurization risk management practices, among others.