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Eversource said Wednesday evening it has agreed to purchase the Massachusetts assets of Columbia Gas for $1.1 billion, capping a whirlwind day that began with federal prosecutors saying Columbia would exit the state and pay a record fine to resolve a criminal case related to the deadly Merrimack Valley pipeline disaster of 2018.
Under the plea agreement, Columbia’s parent company, NiSource, must forfeit any profits from the sale, though there may be none.
“The purchase price represents a loss compared to the book value of Columbia Gas of Massachusetts,” NiSource said in a statement.
The price is also less, in inflation-adjusted dollars, than what NiSource agreed to pay for Columbia Gas of Massachusetts in a 1997 acquisition. Both companies operated under different names then.
Columbia’s $53 million penalty under the plea deal is the largest ever imposed under the federal Pipeline Safety Act.
"Part of what we are doing here is attempting to vindicate the outrage in the city of Lawrence and surrounding towns," U.S. Attorney for Massachusetts Andrew Lelling said at a news conference in Boston. "We knew that one of the things those communities wanted is for Columbia Gas to simply go away. And, so, that's why one of the components of this agreement is that that company will now go away. The tragedy was of such an extent that it would be extremely difficult for the populations of those towns to trust this company going forward."
Columbia Gas's agreement to leave the state is a dramatic reversal from its longstanding position that it would ultimately regain public trust and continue operations.
"We take full responsibility for the tragic events of September 13, 2018, that so impacted our customers throughout the Merrimack Valley," the company said in a statement. "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."
The September 2018 gas explosions that killed Lawrence teen Leonel Rondon and injured roughly two dozen others were not mere accidents, said Joe Bonavolanta, who heads the FBI’s Boston office.
"Our investigation uncovered a pattern of flagrant organizational indifference, where the company’s employees knowingly and willfully violated the minimum safety standard for the starting up and shutting down of a distribution pipeline, in order to increase their bottom line," Bonovolanta said.
Those findings mirror those of the National Transportation Safety Board, which previously concluded that a work crew contracted by Columbia Gas neglected to move pressure sensors from a cast-iron gas main to a plastic replacement. The oversight triggered widespread fires and explosions in Lawrence, Andover and North Andover.
Despite federal authorities' harsh words about Columbia Gas employees, no individuals will face charges. U.S. Sen. Elizabeth Warren of Massachusetts, a Democratic presidential candidate, called the absence of personal culpability "a glaring weakness with this settlement."
Other political leaders applauded the plea agreement, however, including U.S. Rep. Lori Trahan, whose district includes the Merrimack Valley.
"I do believe that the news that Columbia Gas will be sold will help our region — Lawrence, Andover and North Andover, specifically — heal and return to a sense of normalcy, finally," Trahan said.
Columbia Gas reached a $143 million settlement with residents and businesses last summer. The settlement is expected to receive final approval in Essex Superior Court Thursday.
Roughly one-fifth of the money is earmarked for attorneys' fees, which bothers Lawrence Mayor Dan Rivera.
"I hope that the judge will lessen the amount of money that the attorneys are taking," he said. "It's going to make a lot of people feel, again, that another bureaucracy has let them down."
Individual payments from the settlement could be less than $50, in some cases.
Columbia Gas also paid $80 million to impacted municipalities and undisclosed amounts to two families: Rondon’s and another that suffered injuries to multiple members.
The company says it has dedicated a total of $1 billion to the recovery.
WBUR's Quincy Walters and Hannah Chanatry contributed to this report.
This segment aired on February 26, 2020.
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