Eversource to buy Columbia Gas following plea agreementDate: 3/4/2020 GREATER SPRINGFIELD – Nearly two years after the tragic gas explosions in the Merrimack Valley, Columbia Gas of Massachusetts (CMA) admitted fault for the tragedy, will pay millions of dollars in fines and sell their Massachusetts business.
The explosions, which took place on Sept. 13, 2018, killed one person, injured 22 and damaged 131 homes and commercial buildings, according to a press release from U.S. attorney Andrew Lelling’s office. The plea agreement and its terms were announced on Feb. 26.
The agreement, according to Lelling’s office, requires the company to pay a $53 million fine, which is “the largest criminal fine ever imposed under the Pipeline Safety Act.” The fee “represents twice the amount of profits CMA earned between 2015 and 2018 from a pipeline infrastructure program called the Gas System Enhancement Plan (GSEP).”
In addition to the $53 million, CMA’s parent company, NiSource, also agreed to give up any profits made in the sale of the company to the government. The money from the fine paid by CMA, according to Lelling’s office, “will be directed to the Crime Victims Fund which is a major funding source for victim services throughout the United States.” Additionally, NiSource will remain responsible for any liabilities related to the explosions and is required to settle all pending civil claims against them related to the 2018 incident.
CMA spokesman Dean Lieberman told Reminder Publishing, “We take full responsibility for the tragic events of September 13, 2018 that so impacted our customers throughout the Merrimack Valley.” He continued and added that the Feb. 26 “resolution with the U.S. Attorney’s Office is an important part of addressing the impact. Our focus remains on enhancing safety, regaining the trust of our customers and ensuring that quality service is delivered.”
Lelling’s office said the explosions were caused by “the failure to account for controls lines,” which “took place during a pipe replacement project known as the South Union Street Project.” They continued, “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 GESP.”
Additionally, Lelling’s office said CMA, “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.”
Less than 24-hours after the plea agreement was announced, Eversource announced they would be purchasing CMA from NiSource. In a press release, Eversource said they would be purchasing the company for $1.1 billion and hope the transaction would be complete “by the end of the third quarter 2020.”
However, before the deal can be completed it must be approved by the Massachusetts Department of Public Utilities (DPU) and the U.S. Justice Department. When the deal is completed, Eversource will nearly double their number of customers served in the Commonwealth and in total will end up with about 630,000 natural gas customers and 1.5 million electric customers across 51 communities in Massachusetts.
Eversource Western Massachusetts media contact Priscilla Ress said currently Eversource has plans to continue all currently planned projects. Ress said, “…We have no current plans to change plans to change or cancel any projects under development at Columbia Gas.” She continued, “We are committed to increasing the current pace of replacement of natural gas lines in the Columbia Gas service territory to improve safety and reliability for customers.”
Currently, in Western Massachusetts CMA is working on the Greater Springfield Service Territory Reliability Project that was proposed in November 2017 with changes to the project announced in October 2019. The original project consisted of five different sub-projects: the Longmeadow Supply Strategy Project, the Agawam Compressor Station Enhancement project, the TGP Agawam Two-Mile Pipeline Loop, the Columbia Gas ConEd Transmission Line Replacement in Springfield, and a six-mile Alternate Backed Project in Northampton. In October 2019, CMA announced that the Northampton project had been cancelled due to a moratorium on new gas service in the city and Easthampton.
CMA is still working to replace 8,500 feet of existing line with new pipe in Springfield.
Springfield Mayor Domenic Sarno released a statement following the announcement of the plea agreement and Eversource’s intention to buy CMA.
The statement read: “The leadership team of Eversource has reached out to me and provided me with an update of their plans to acquire Columbia Gas. They have reassured me that they will continue to serve our community and provide the quality of service that our residents and businesses deserve. I look forward to again meeting with the leadership team of Eversource in the very near future. To continue to build on our good working relationship for the betterment of our Springfield residents and business community.”
However, while CMA is continuing work on the ConEd Transmission Line Replacement in Springfield, they tasked Tennessee Gas Pipeline (TGP) with completing the projects in Longmeadow and Agawam. Agawam City Council President Christopher Johnson said what happened in the Merrimack Valley and the projects taking place by TGP in Agawam were “apples and oranges.” He explained that because TGP is an “interstate company” safety measures were much stricter than they were for CMA.
“We had a workshop and they [TGP] explained what they’re required to do, and it’s much more stringent,” he said. Johnson said TGP is “moving forward with a small project to replace two compressors” and replace an old pipeline “they abandoned a while back.” This, he explained, “allows them to maintain the pressure.” Most recently, despite pushback from residents, the Agawam City Council “voluntarily expanded their [TGP] easement, so they can move forward with the project.” Johnson said had the council not expanded the easement, the land could have been taken by eminent domain, but emphasized “from Agawam’s perspective Tennessee Gas has been a good corporate neighbor for decades” and he didn’t want people to think TGP and CMA were the same company.
Longmeadow Town Manager Lyn Simmons could not comment on the impact of the plea agreement and sale of CMA because as she said “at this point in time it is too soon for me to comment on the trajectory of the project in Longmeadow.”
A plea hearing for CMA is scheduled for March 9 at 2 p.m.
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