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Former DOT Secretary to oversee NiSource safety overhaul after Mass. blasts

NiSource Inc. tapped former Transportation Secretary Ray LaHood to keep the company on track as it adopts a large-scale, long-term safety program in the wake of a series of deadly gas blasts and fires on its Massachusetts gas distribution system.

"Any system like the natural gas system is susceptible to failure, and we as humans are susceptible to errors," Joe Hamrock, NiSource's president and CEO, said in a March 14 interview about the company's safety program development plans. "This set of practices really anticipates human error and anticipates system failures and puts in place enhanced protocols and enhanced risk mitigation practices, and allow our industry … to further reduce the likelihood of high-consequence incidents in particular, but incidents in general."

LaHood, who served as the Transportation Secretary from 2009 to 2013, will lead a newly created quality review board overseeing NiSource's progress on implementing a so-called safety management system.

A safety management system, or SMS, involves a holistic approach to understanding and mitigating risk with an emphasis on repeatedly reevaluating all aspects of a company that can impact safety outcomes. The American Petroleum Institute in 2015 issued a recommended practice laying out how pipeline operators could develop their own SMS programs on a voluntary basis. While SMS remains voluntary, some utilities have had to adopt the framework as part of post-incident settlements or in merger-related proceedings.

"Safety must be the top priority of any natural gas company and implementing SMS is the right thing to do," LaHood said in a March 14 statement. "I look forward to providing rigorous oversight throughout this process, with a clear objective: promote the safety of the public."

The NiSource quality review board LaHood will be leading is expected to provide independent review and oversight and will comprise five members with backgrounds spanning the nuclear, aviation and energy sectors. Among the board members will be Jeff Wiese, who served as associate administrator for pipeline safety in the U.S. Department of Transportation for more than 17 years and now works in pipeline safety consulting at TRC Solutions.

"Secretary LaHood brings great insight about the broad stakeholder engagement required to be effective in building this kind of a system," Hamrock said, noting that adopting an SMS will involve hundreds of employees, along with external expertise.

NiSource said it will focus its SMS program on a few key areas, including a comprehensive asset assessment, probable risk assessment, leadership capabilities and culture evaluation, and emergency preparedness improvements.

Already, the company has spoken with its regulators across multiple states about pursuing SMS, according to Pablo Vegas, NiSource's executive vice president and president of gas utilities. The most detailed conversations have been with the Massachusetts Department of Public Utilities and the Virginia State Corporation Commission, which has been pushing operators in recent years to adopt SMS practices, Vegas said March 14. The utility conglomerate has also had informal discussions with its other regulators.

Hamrock said that NiSource's utilities will likely use SMS when prioritizing safety funding requests across the companies' seven jurisdictions in coming years.

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Nisource estimates the total expense related to the gas pipeline overpressurization event could be about $1.1 billion in third-party claims and other expenses, plus another $220 million to $230 million in capital costs related to distribution system replacement and associate restoration in the impacted communities.

Source: Associated Press

Excessive gas pipeline pressure on NiSource subsidiary Columbia Gas of Massachusetts' system caused the Sept. 13, 2018, fires and blasts in Lawrence, Andover and North Andover, Mass., that killed one person, sent at least 21 people to the hospital and damaged 131 structures, according to a preliminary federal investigation report. The report indicated that human error during a pipeline replacement project likely played a key role. Thousands of customers were left without service after the accident.

NiSource has estimated the total expense related to the event could be about $1.1 billion in third-party claims and other expenses, plus another $220 million to $230 million in capital costs related to distribution system replacement and associate restoration in the impacted communities.

NiSource has taken a number of steps in the aftermath of the fires and explosions, including deciding to install overpressurization protection in the form of automatic shutoff devices on all of the low-pressure systems across its seven-state operating area.

Columbia Gas of Massachusetts is also undergoing leadership changes. Mark Kempic, currently the utility's COO, will succeed utility President Steve Bryant, who is set to retire May 1.