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Regulators threaten Columbia Gas with fines over Merrimack Valley violations

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Regulators threaten Columbia Gas with fines over Merrimack Valley violations

State regulators ordered Columbia Gas of Massachusetts to implement safety measures and threatened millions of dollars in fines after the utility flagged concerns about abandoned natural gas service lines, including one that was decommissioned following the 2018 Merrimack Valley gas explosions and fires.

Columbia Gas discovered that workers did not comply with safety requirements when they disconnected a pair of service lines in Lawrence and Andover, Mass., from the distribution system, the company reported to the Pipeline Safety Division at the Massachusetts Department of Public Utilities, or DPU, on Sept. 11.

The NiSource Inc. subsidiary now has to conduct leak detection in the areas surrounding 4,900 service lines that were abandoned following the Merrimack Valley disaster, provide daily updates on the surveillance, and furnish additional work plans and safety information, DPU Commissioner Matthew Nelson told the utility in response to the revelation.

Nelson warned that Columbia Gas could be fined up to $1 million per violation for failing to carry out any of the eight orders issued in a Sept. 11 letter to the company.

Columbia Gas self-reported the issues two days before the one-year anniversary of the Merrimack Valley disaster, a series of gas explosions and fires in northeastern Massachusetts that killed one person, left 23 people hospitalized and destroyed or damaged 131 buildings. The catastrophe occurred after Columbia Gas released high-pressure gas into a low-pressure distribution system, according to the National Transportation Safety Board's preliminary report.

The problem flagged by Columbia Gas on the service line in Andover appeared to indicate the company violated three federal pipeline safety conditions and one state rule, DPU Public Utilities Engineer Matthew Cyr wrote in a Sept. 12 letter. The issues on the other line in Lawrence likely violated one federal regulation, Cyr said. Columbia Gas is subject to compliance action and further investigation by the state regulator, Cyr added.

Columbia Gas announced Sept. 12 that it will start conducting compliance checks on about 700 service lines abandoned during recovery work in the Merrimack Valley in 2018. The company said it anticipates completing the first phase of work by Nov. 16, but the DPU expects Columbia Gas to prioritize the work and finish sooner, Nelson said.

Service lines deliver gas from neighborhood distribution mains into residences and businesses. The compliance checks will require customers to allow Columbia Gas workers to enter homes and businesses for inspections, or else the company will check the lines outside the property.

"We recognize that our customers have been through a difficult year as we conducted the recovery and restoration work in these communities. We understand that additional work may frustrate them, and we apologize," Columbia Gas President and COO Mark Kempic said in a news release.

NiSource said it would update its cost estimates for these and other Merrimack Valley-related expenses at its next quarterly earnings release. The company issued its third upward revision for Merrimack Valley disaster-related costs July 31, saying it expects to spend $1.67 billion to $1.72 billion for pipeline replacement and restoration, third-party claims and other expenses. The estimate did not include the cost of unforeseen fines or penalties, executives said at the time.