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United States v. Bay State Gas Company, d/b/a Columbia Gas of Massachusetts

Docket: 20-cr-10066-FDS

The United States Attorney’s Office has charged Bay State Gas Company, doing business as Columbia Gas of Massachusetts (“Columbia Gas”), with violating the federal Pipeline Safety Act, 49 U.S.C. § 60123(a), 49 U.S.C. § 60118(a), and 49 C.F.R. §§ 192.605(a) and 192.605(b)(5).  As part of the plea agreement, Columbia Gas has agreed to plead guilty to this offense and pay a criminal fine of approximately $53 million.  The United States Attorney’s Office has also entered into a Deferred Prosecution Agreement with the parent company of Columbia Gas, NiSource, Inc. based in Indiana, which, among other provisions, requires that NiSource make reasonable best efforts to sell Columbia Gas, forfeit any profit from the sale to the Government, and once sold stop all gas pipeline activities in Massachusetts.

Sentencing

Bay State Gas Company, d/b/a Columbia Gas of Massachusetts, was ordered by U.S. District Court Chief Judge F. Dennis Saylor IV to 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, the Court also sentenced CMA to a three-year period of probation during which CMA’s operations will be subject to a monitor to ensure CMA’s compliance with federal and state safety regulations. The three year period of probation will continue until CMA is sold to a qualified buyer.

Frequently Asked Questions

What are the charges and what do they mean?
Bay State Gas Company, doing business as Columbia Gas of Massachusetts (“Columbia Gas”) was charged in federal court in Boston with violating the federal Pipeline Safety Act. The company has agreed to plead guilty and pay a criminal fine of approximately $53 million, the largest criminal fine ever imposed for a violation of the Pipeline Safety Act. In addition to the plea agreement, the Government has also entered into a Deferred Prosecution Agreement (“DPA”) with NiSource, Columbia Gas’s parent company based in Indiana. As part of the agreement, NiSource has agreed to make reasonable best efforts to sell Columbia Gas and cease and desist all gas pipeline activities in Massachusetts. They also agreed to forfeit any profit or gain from the sale of Columbia Gas.
Are there charges against individuals at the company?
The settlement is with Columbia Gas and no individuals were charged. As noted in the documents filed with the court, Columbia Gas is being held accountable for the catastrophic event on September 13, 2018, when a series of gas explosions in Lawrence, Andover and North Andover damaged 131 buildings, destroyed three homes, injured 22 people, killed one and severely injured another.
Who will receive the $53 million?
Columbia Gas has agreed to pay the government $53 million dollars, in addition to the profit of any sale of the company. Under the applicable statutes, the government is unable to award victims compensation. As with most criminal fines, the monies collected as part of this settlement will be directed to the Crime Victims Fund which is a major funding source for victim services throughout the United States. Columbia Gas has voluntarily paid individuals, businesses and municipalities since the event occurred. There are also pending lawsuits in the lower courts. As part of the agreement the company must resolve all pending civil claims and remains responsible for any prior voluntary payments of restitution to the victims of the event including individuals, business and municipalities. In addition, the Pipeline Safety Division of the Massachusetts Department of Public Utilities (“MA DPU”) has also filed two civil enforcement actions against Columbia Gas that remaining pending. More information about the MA DPU enforcement actions can be found at https://eeaonline.eea.state.ma.us/DPU/Fileroom/dockets/bydivision.
I am a Columbia Gas customer. What does this mean for me?
Under the terms of the agreement, NiSource, the parent company for Columbia Gas has agreed to make reasonable best efforts to sell Columbia Gas. Under Massachusetts law, the sale or merger of a public utility has to be approved by the MA DPU. During that time, before any sale, a monitor will oversee compliance with the recommendations from the NTSB’s investigation into the incident. The monitor will also report monthly to the U.S. Attorney’s Office, the MA DPU and the Massachusetts Attorney General’s Office. This process is expected to take at least several months.
Am I entitled to be present at the hearing or speak at the hearing?
Individuals who may be interested in providing a statement to the Court about the impact that this case may have had on them, please send your questions to the following email address: USAMA.VictimAssistance@usdoj.gov.

Documents

Updated January 7, 2021

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