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US judge accepts Columbia Gas plea agreement in Mass. gas blast case

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Essential Energy Insights - January 2021


US judge accepts Columbia Gas plea agreement in Mass. gas blast case

A U.S. District Court judge accepted the plea agreement reached between federal prosecutors and Columbia Gas of Massachusetts, wrapping up a criminal case that charged the NiSource Inc. subsidiary with violating federal pipeline safety rules ahead of a series of catastrophic explosions and fires in 2018.

In rendering his decision at the June 23 sentencing hearing, Judge F. Dennis Saylor, the chief judge for the District of Massachusetts, said any further delay would harm the interest of justice and safety. Saylor added that he wished he had the "magic power" to erase the event from history but said that the best the parties can do is to make sure it does not happen again and to compensate the victims while recognizing the outcome does not make them whole.

The Sept. 13, 2018, catastrophe in the commonwealth's Merrimack Valley killed 18-year-old Leonel Rondon, injured 22 people, and damaged or destroyed 131 buildings. The National Transportation Safety Board traced the incident to Columbia Gas's failure to adequately plan, review and oversee a gas pipeline project.

Saylor's decision approves the terms of the plea agreement announced on Feb. 26, which require Columbia Gas, officially known as Bay State Gas Co., to pay a $53 million fine and for NiSource to sell the business and exit Massachusetts. NiSource agreed to sell the subsidiary to Eversource Energy for $1.1 billion shortly after the parties announced the plea deal.

United States Attorney Andrew Lelling said Columbia Gas "acted with reckless disregard for safety by cutting corners and relying on lax protocols."

"The result was catastrophicstealing one life, harming dozens and impacting the home and livelihoods of hundreds more. Today's sentence serves as little comfort to the victims, but is another step towards terminating Columbia Gas's business in Massachusetts," Lelling said in a June 23 press release.

Saylor said it is rare for a company to handle claims of restitution so quickly following a catastrophe of the Merrimack Valley disaster's magnitude. He acknowledged Columbia Gas's efforts to proceed promptly and efficiently rather than tying up the redress process in court for years.

"Whatever issues led up to this terrible tragedy, since the disaster occurredat least form my limited perspective — it appears the company has been a responsible citizen in terms of addressing the harm caused promptly and taking steps to prevent a recurrence," Saylor said.

Saylor also accepted an addendum to the original plea agreement, which provided for a three-year period of probation to end if and when NiSource completes the sale of Columbia Gas. The judge noted during a June 8 hearing that federal law says the probation period cannot be less than one year from the time of sentencing. The addendum allows for the probation to continue for the balance of one year, but Columbia Gas would only be subject to minimum conditionsnot additional conditions laid out in the plea agreementonce Eversource takes control of the company.

Eversource and NiSource aim to close the deal by the end of the third quarter. Asked about the provision and the outcome of the sentencing hearing, a spokesperson for Eversource referred questions to Columbia Gas.

Columbia Gas of Massachusetts President and COO Mark Kempic offered his "deepest sympathies" on behalf of the company, reiterating that it takes responsibility for the Merrimack Valley disaster. He said the sale of Columbia Gas to Eversource is the right outcome for the utility's customers and the communities it serves.

The decision in federal court moves the sale one step closer to completion. Columbia Gas, along with the Massachusetts attorney general and Department of Energy Resources, has sought to strike a settlement by wrapping up a pair of investigations into the disaster by the commonwealth's Department of Public Utilities.

However, the parties did not submit a proposed settlement by the June 22 deadline. The hearing officer on June 22 asked the Department of Public Utilities for a second extension to submit a proposed settlement in order to prepare documentation required by the government parties and utility regulator. They have committed to a deadline on June 26.