Columbia Gas Agrees to Plead Guilty in Connection with September 2018 Gas Explosions in Merrimack Valley
Company agrees to sell its business in Massachusetts and pay a $53 million fine, the largest criminal fine ever imposed under the Pipeline Safety Act
BOSTON – Columbia Gas of Massachusetts (CMA) has agreed to accept responsibility for the gas explosions on Sept. 13, 2018, in Lawrence, Andover and North Andover that killed one individual, injured 22, and damaged homes and businesses.
Bay State Gas Company, d/b/a Columbia Gas of Massachusetts, has agreed to plead guilty to violating a minimum safety standard of the Natural Gas Pipeline Safety Act relating to the failure to implement procedures to prevent the over-pressurization of its low-pressure gas distribution system in South Lawrence during a pipe replacement project known as the South Union Project. A plea hearing has not yet been scheduled.
According to the terms of the plea agreement, CMA will pay a criminal fine of $53,030,116 which represents twice the amount of profits that CMA earned between 2015 and 2018 from a pipeline infrastructure program called the Gas System Enhancement Plan (GSEP). In addition to a fine, CMA’s operations will be subject to monitoring during a three year period of probation to ensure CMA’s compliance with federal and state safety regulations.
The U.S. Attorney’s Office has also entered into a Deferred Prosecution Agreement (DPA) with CMA’s parent company, NiSource, Inc. based in Indiana. As part of the DPA, NiSource has agreed to undertake their best reasonable best efforts to sell CMA after which NiSource and CMA would stop all gas pipeline operations in Massachusetts. In exchange for the U.S. Attorney’s Office’s agreement to defer prosecution of NiSource as a result of CMA’s conduct, NiSource has also agreed to forfeit any profit it may earn from the sale of CMA and implement each of the safety recommendations from the National Transportation Safety Board (NTSB) resulting from the Sept. 13, 2018 incident.
According the charging documents, during the afternoon of Sept. 13, 2018, the over-pressurization of a low pressure gas distribution system in South Lawrence caused multiple fires and explosions in the communities of Lawrence, Andover, and North Andover. As a result, one individual in Lawrence was killed and another severely disabled, 22 people were injured, and approximately 131 residential homes and commercial buildings were damaged.
The charges filed against CMA allege that the company recklessly disregarded a known safety risk related to regulator control lines – sections of pipe connected to regulator stations that helped monitor and control downstream gas pressure. By at least 2015, according to an internal company notice, CMA knew that the failure to properly account for control lines in construction projects could lead a “catastrophic event,” including fires and explosions. Aging cast iron pipes were being replaced, but the failure to remove or relocate control line pipes that were later abandoned would automatically cause regulator stations to continually increase pressure to the point of dangerous over-pressurization.
The failure to account for control lines that led to the Sept. 13, 2018 event took place during a pipe replacement project known as the South Union Street Project that began in Lawrence in 2016. Throughout the project, CMA disregarded the known safety risks related to control lines, and instead focused on the timely completion of construction projects to maximize earnings under the company’s GSEP. The charging document alleges that the company, through the actions of its employees in Engineering, Construction and Operations and a pattern of flagrant organization indifference, failed to implement and follow any plan or action to ensure against over-pressurization and that failure led to the eventual fires and explosions in the Merrimack Valley on Sept. 13, 2018.
The DPA with NiSource acknowledges the fact that NiSource has previously made substantial voluntary restitution payments to the victims of the September 2018 incident, and has agreed to seek to resolve all pending civil claims. Most of the $53 million fine will be directed to the Justice Department’s Crime Victims Fund, which is a major funding source for victim services throughout the United States.
For more information regarding the case, please visit: https://www.justice.gov/usao-ma/victim-and-witness-assistance-program/united-states-v-bay-state-gas-company-dba-columbia-gas-massachusetts
United States Attorney Andrew E. Lelling; Douglas Shoemaker, Special Agent in Charge of the U.S. Department of Transportation, Office of Inspector General, Office of Investigations; and Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division made the announcement today. Critical assistance was provided by the Massachusetts State Police and Lawrence Fire Department. Assistant U.S. Attorneys Neil J. Gallagher, Jr. and Evan Gotlob of Lelling’s Public Corruption and Special Prosecutions Unit are prosecuting the case.