'Flagrant indifference:' Gas company pleads guilty, will pay record $53M for deadly Massachusetts explosions

Joey Garrison, USA TODAY

BOSTON – A gas company accepted responsibility Wednesday for a deadly series of natural gas explosions that rocked Massachusetts in September 2018, agreeing to pay a $53 million fine and end its operations in the state in a plea deal reached with the U.S. Justice Department.

Columbia Gas Co. of Massachusetts (CMA) will plead guilty to felony charges for not meeting safety standards that led to the catastrophic explosions. U.S. Attorney Andrew Lelling said the criminal fine is "by far" the largest under the 1960s-era federal Pipeline Safety Act.

The parent company of CMA, Indiana-based NiSource Inc., also must sell its subsidiary, stop doing business in Massachusetts and pay the U.S. government any profits made from the company's sale. Until it is sold, a third-party monitor will regularly inspect CMA, which will be on a three-year probation. As part of the deal, prosecutors will not pursue charges against NiSource for the conduct of CMA.

The Sept. 13, 2018, gas explosions, caused by over-pressurized pipes underground, killed one, injured 22 and damaged more than 100 homes and buildings in the Merrimack Valley communities of Lawrence, Andover and North Andover.

Lelling said a federal investigation into the explosions revealed a “pattern of flagrant indifference in the face of extreme risk to life and property." The company "knowingly violated minimum safety standards for starting up and shutting down gas pipelines," he said. The investigation was consistent with the findings of the National Transportation Safety Board (NTSB).

“This disaster was caused by wholesale management failure at Columbia Gas in overseeing the South Union Street project in Lawrence, Massachusetts," Lelling said at a news conference. The three-year gas pipe replacement project had repeated turnover in personnel.

Although the company "knew the severe risks of over-pressurized gas pipelines," Lelling said CMA failed to maintain any centralized record-keeping, including in its own electronic mapping system, for the location of underground regulator control lines that monitor pressure.

The explosions occurred when a work crew shut down a gas main attached to a control line, forcing the system to identify a drop in pressure. The system compensated by increasing the flow of gas to that location causing rapid over-pressurization.

Lelling said the company knew of the potential for a "catastrophic event" by at least 2015, but rather than having central procedures for tracking control lines, it relied on "informal communications" between engineers and construction workers.

"This is like relying on informal communications to run a nuclear reactor or man and airplane," he said. CMA, he added, also "repeatedly ignored" opportunities to ensure information about the control lines in Lawrence was transferred to personnel. 

The plea deal comes after CMA settled a series of class-action lawsuits from explosion victims last summer for $143 million. The class-action settlement will go before an Essex County judge for approval Thursday.  A plea hearing is set for March 9 for the federal charges. 

"The charges against Columbia Gas of Massachusetts are truly unsettling and offers a reminder of just how much of local communities across the country, not only rely but deserve and expect public utilities to maintain our operations," said Elise Chawaga, an official for the U.S. Department of Transportation Inspector General’s Office.

She called it a "warning to others" they have a "solemn obligation to make safety their highest priority."

The $53 million fine is equal to double the profits of the pipeline replacement project the company was undertaking when the explosion occurred. Revenue from the fine and any profits from the sale of the company will go to a federal fund that serves victims of federal crimes, such as the explosions. 

"No amount of money can make up for the disastrous gas explosions in the Merrimack Valley that leveled homes, displaced thousands of families and caused a heartbreaking loss of life," said Joseph Bonavolonta, special agent in charge for the Boston division of the FBI. "But today's settlement is a sobering reminder that if you decided to put profits before public safety you will pay the consequences."

NiSource is bound to the agreement by the threat of indictment, and must also enforce the implementation of all NTSB safety standards at all subsidiaries it owns, including gas companies in Indiana, Ohio, Pennsylvania, Maryland, Kentucky and Virginia.

CMA, in a company statement, said it takes "full responsibility" for the gas explosions: "Today’s 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.”

NiSource said last summer it had spent about $1 billion responding to the disaster. NiSource spokesmen Ken Stammen called the plea agreement an "important step" to address the tragedy.

"We are committed to doing what is in the best interests of both the public we serve and our dedicated employees, and we will fulfill the terms of our agreement today consistent with that commitment," Stammen said.

Reach Joey Garrison and on Twitter @joeygarrison.

This article originally appeared on USA TODAY: Gas company pleads guilty to federal charges, fined record $53M for deadly Massachusetts explosions