February 26, 2020
Columbia Gas of Massachusetts Is Charged, Signs a Plea Agreement, and Agrees To Pay the Largest Federal Criminal Fine Imposed under the Pipeline Safety Act
On February 26, 2020, the U.S. Attorney’s Office (USAO), District of Massachusetts, filed a one-count information in U.S. District Court, Boston, Massachusetts, against Bay State Gas Company, d.b.a. Columbia Gas of Massachusetts (Columbia Gas), for violating the Natural Gas Pipeline Safety Act. The USAO also announced a plea agreement with the company, which agreed to pay a criminal fine of $53,030,116 and to have an external entity monitor its operations for 3 years to ensure compliance with Federal and State safety regulations. The amount of the fine is double the profits Columbia Gas earned between 2015 and 2018 from the Gas System Enhancement Plan, a State-run pipeline infrastructure program. To date, it is also the largest Federal criminal fine imposed under the Pipeline Safety Act.
According to the charging document, on September 13, 2018, Columbia Gas was replacing aging pipeline infrastructure for the South Union Project in Lawrence, Massachusetts, when fires and explosions occurred throughout the Merrimack Valley area. One person was killed, and over 20 others—including responding firefighters—sustained injuries. Over 130 structures were damaged in Lawrence, Andover, and North Andover, and thousands of people were displaced.
The information states that Columbia Gas recklessly disregarded known safety risks and focused on timely completion of construction projects, which maximized earnings. Furthermore, internal company notices revealed that company officials allegedly knew that failure to properly account for control lines during construction projects could result in a “catastrophic event.”
The USAO also entered into a deferred prosecution agreement (DPA) with NiSource Inc., a publicly traded utility corporation and the parent company of Columbia Gas. In the DPA, NiSource agrees to attempt to sell Columbia Gas of Massachusetts and forfeit any profits from the sale. In addition, both companies agree to cease and desist all gas pipeline and gas distribution operations in Massachusetts and implement each safety recommendation the National Transportation Safety Board (NTSB) issued after the 2018 incident. The DPA also acknowledged NiSource’s voluntary restitution payments to the victims and its agreement to resolve all pending civil claims.
DOT-OIG and the FBI conducted this investigation with substantial assistance from the Pipeline and Hazardous Materials Safety Administration; Fire and Explosion Investigation Section, Massachusetts State Police; and Lawrence Fire Department.