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As Mass. gas blast probe takes shape, NiSource utility faces large fines

Massachusetts regulators outlined their investigation into Columbia Gas of Massachusetts' service restoration efforts following the 2018 Merrimack Valley disaster, laying out an approach that could lead to tens of millions of dollars in fines.

The Massachusetts Department of Public Utilities, or DPU, announced Dec. 23 that it intends to focus on three distinct time frames during which Columbia Gas controlled emergency response and restoration after the deadly series of gas distribution line blasts and fires. The DPU warned that it could treat each period as a separate emergency event and potentially levy the maximum fine against the NiSource Inc. subsidiary for each of the three cases.

State law allows the DPU to fine utilities $250,000 per day for each violation of its standards, up to a maximum penalty of $20 million for a related series of violations. Treating each period as a separate emergency event would give the DPU the option to collect up to $60 million in fines, though several considerations could limit the total penalty.

SNL Image

An overpressurization event during gas main replacement on Columbia Gas of Massachusetts' distribution system led to a series of explosions and fires that rocked Andover, North Andover and Lawrence, Mass., on Sept. 13, 2018.
Source: AP Photo

Each of the three periods marks a distinct phase of Columbia Gas' service restoration following the Sept. 13, 2018, explosion, which killed 1 person, sent 22 people to the hospital and damaged or destroyed 131 buildings across three communities in northeastern Massachusetts.

The first period spanned Sept. 13-14, 2018, after which the DPS put Eversource Energy in charge of recovery. Columbia Gas, officially known as Bay State Gas Co., resumed the lead Sept. 21, 2018, and largely completed gas restoration to customers Dec. 16, 2018. The third maintenance period followed a large gas leak Sept. 27, 2019, linked to noncompliant restoration work during an earlier time frame.

The DPU stressed that it does not yet have the facts to determine whether it should treat each period as a separate emergency event. If it does, it would need to identify 80 violations over the first two-day period to hit the $20 million maximum fine.

The department ordered Columbia Gas to file a report on the Sept. 27 leak by Jan. 17, 2020.

It also left open the possibility of investigating restoration work that took place between Dec. 16, 2018, and Sept. 27, 2019, which could result in the DPU identifying a fourth time frame and another distinct emergency event for which it could levy fines.

The department is separately investigating Columbia Gas' responsibility for the Merrimack Valley disaster, which could yield additional penalties.