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AG Healey reaches $56 million deal with Columbia Gas for Merrimack Valley gas explosions

Christian Fernsby ▼ | July 8, 2020
Attorney General Maura Healey has reached an agreement with Columbia Gas that requires the company to pay $56 million for its role in the Merrimack Valley gas explosions and to leave Massachusetts by the upcoming heating season.
Maura Healey
Attorney General   Maura Healey
These funds will provide debt relief to thousands of low-income gas customers and enable energy efficiency efforts in older homes and buildings in Lawrence, Andover, and North Andover. The company’s new owner, Eversource, also will be required to ensure safe and reliable operations going forward.

Topics: Columbia Gas

The settlement agreement with Bay State Gas Company d/b/a Columbia Gas of Massachusetts, its parent company NiSource, and Eversource, filed and pending approval by the Department of Public Utilities (DPU), was reached in coordination with the Department of Energy Resources (DOER) and the Low-Income Weatherization and Fuel Assistance Program Network.

Under the terms of the agreement, Columbia Gas will leave Massachusetts and all of its assets will be transferred to Eversource.

The settling parties anticipate the asset transfer to occur on November 1, at which time Eversource will be required to implement a comprehensive safety and reliability program, address any remedial actions remaining from Columbia’s pipeline safety violations from the explosion, fund a heat pump pilot for customers impacted by the Northampton moratorium, and develop a clean energy analysis to ensure that its business strategies are consistent with the state’s greenhouse gas emissions reduction requirements.

NiSource will pay $56 million for the creation of an Energy Relief Fund that will help approximately 26,000 low-income customers across the company’s three service territories by wiping out nearly $15 million in accumulated debt on their gas bills.

The remaining funds will be devoted to the Merrimack Valley for clean energy programs and grants for homeowners, tenants, businesses, and municipalities.

Under the agreement, Eversource will engage an independent consultant to prepare a case analysis outlining potential decarbonization strategies for its gas business that are consistent with Massachusetts’s greenhouse gas emission reduction requirements and protect customers.

Eversource also commits to meeting Columbia Gas’ existing three-year energy efficiency plan and extend the special weatherization offer in the City of Lawrence through 2021. In addition, Eversource will fund two heat pump pilot programs to increase technology adoption through the Mass Save program and as an alternative to the current gas moratorium in western Massachusetts.

Eversource also pledges to provide up to 2,000 WiFi thermostats connected to natural gas fired furnaces or boilers to help reduce gas usage through demand management programs.

In addition, Eversource commits to monthly reporting of its energy efficiency initiatives, improve communication with landlords and partnerships with local organizations, and provide Spanish speaking outreach, marketing, and customer service.

Following the Merrimack Valley gas explosions, the AG’s Office asked Columbia Gas to withdraw its pending rate increase request. Today’s settlement extends the rates set in 2015 through November 2021 and requires Eversource to return to customers more than $6.7 million in savings from the Tax Cuts and Jobs Act.

The settlement also requires Eversource to spread the impact of its next rate increase out over two years: $6.3 million in November 2021 and $16.7 million in November 2022.

After the 2018 incident, Governor Baker declared a State of Emergency and authorized Eversource to take management control over the coordinated effort to safely restore utility services in South Lawrence, Andover and North Andover.

Columbia Gas was ordered to impose a moratorium on all work, except for emergency and compliance work, and was required to enter into an agreement with Nitsch Engineering to monitor the company’s management of the restoration and recovery work.