Columbia Gas Will Pay $53M Fine For Merrimack Valley Explosions

BOSTON (CBS) – Columbia Gas of Massachusetts will pay a $53 million fine for its role in the deadly 2018 Merrimack Valley gas explosions. As part of a plea agreement, the company will also sell its business in Massachusetts. Eversource announced Wednesday night it has reached an agreement to purchase the natural gas assets of Columbia Gas for $1.1 billion.

The FBI Boston said a joint investigation led to the decision to hold Columbia Gas "criminally & financially accountable" for the explosions and fires that killed a young man and damaged or destroyed several homes and businesses in Lawrence, Andover and North Andover on September 13, 2018.

Money from the fine will go to the Justice Department's Crime Victims Fund.

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U.S. Attorney for Massachusetts Andrew Lelling said during a Wednesday press conference that Columbia Gas agreed to plead guilty to violating the Pipeline Safety Act.

"This is by far the largest criminal fine ever imposed under the Pipeline Safety Act," said Lelling, adding that "this disaster was caused by a wholesale management failure" on the part of Columbia Gas.

Joe Bonavolonta, special agent in charge for the FBI in Boston, said Columbia Gas showed "flagrant organizational indifference" for safety. He also said employees "knowingly and willfully violated the minimal safety standard" for starting and shutting down a distribution pipeline in order to increase their bottom line.

"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 Bonavolonta. "But today's settlement is a sobering reminder that if you decide to put profits before public safety, you will pay the consequences."

Bonavolonta said Columbia Gas "had no idea" what control lines were in the ground. He added the company's records were "outdated, incomplete and unreliable."

A Columbia Gas spokesman said in a statement the company takes "full responsibility" for the series of explosions.

"We take full responsibility for the tragic events of September 13, 2018 that so impacted our customers throughout the Merrimack Valley," the spokesman said. "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."

Eighteen-year-old Leonel Rondon was killed as a result of the gas explosions.

Lelling said a deferred prosecution agreement binds NiSource, the parent company of Columbia Gas, to terms of the deal. The company can face criminal indictment if it does not comply.

Any profits NiSource makes when selling its Massachusetts Columbia Gas business will be provided to the Justice Department fund.

"Columbia Gas coming right out saying it I think it puts closure," said Lawrence resident Peter Blanchette.

North Andover restaurant owner Shadi Asmar said, "This is all unprecedented and hopefully it's a lesson learned for the future."

Lawrence Mayor Dan Lawrence tweeted "justice" when news of the agreement was announced. Lelling said he has not spoken to Rivera about the agreement, but he knows they had a "parallel concern."

"We knew that one of the things those communities wanted is for Columbia Gas to simply go away. That's why one of the components of this agreement is that company will now go away," Lelling said.

Eversource Energy, which is based in Massachusetts, acquired natural gas assets of Columbia Gas from its parent company, NiSource. Under the agreement, liabilities related to the explosions will remain the responsibility of NiSource.

U.S. Attorney Andrew Lelling on Columbia Gas Plea Agreement

Prosecutors said that while the company was responsible for the explosions, there was not one individual who would be prosecuted.

"We always prioritize the effort to prosecute individuals and hold them accountable for criminal activity because that is what is more satisfying to the public, that's what vindicates victim's rights. We were unable to do that here," said Lelling. "I think this investigation reached a successful conclusion in that we are holding the companies responsible for what they did in Lawrence, and they will pay a steep price for that. But there simply was no one individual here who rose to the level of an individual federal crime. So this is what you have left."

The U.S. Attorney's announcement is separate from a hearing that will be held Thursday for final approval of a $143 million settlement Columbia Gas agreed to in October 2019.