NiSource to sell Massachusetts business for $1.1B
MERRILLVILLE, Ind. (Inside INdiana Business) — Merrillville-based NiSource Inc. (NYSE: NI) has announced plans to sell its Columbia Gas of Massachusetts business to Eversource Energy (NYSE: ES) in Boston. The deal, valued at $1.1 billion, comes as NiSource continues to deal with the fallout of the deadly explosion and fires in 2018, which were blamed on the gas company.
Eversource serves about 4 million utility customers in the New England area. NiSource Chief Executive Officer Joe Hamrock says the deal will create “the right next chapter” for Columbia Gas customers.
“Eversource is one of the most respected energy companies in the country with a strong operational track record in the New England area, and we believe they are focused on investing in Columbia Gas of Massachusetts to further improve system operations, including to enhance safety, pipeline integrity and reliability programs,” Hamrock said in a news release. “We look forward to working closely with Eversource to ensure a smooth transition.”
In September 2018, a series of explosions in three Massachusetts cities resulted in the death of one person and injuries to two dozen more. Additionally, thousands of homes and businesses were left without natural gas service for weeks.
A year later, the National Transportation Safety Board said “deficiencies in management and oversight” by Columbia Gas led to the incident, referred to as the “Greater Lawrence Incident.” The NTSB said while a contract crew was replacing gas line pipes, it incorrectly used a bypass, which led to high-pressure natural gas being released into a low-pressure system.
In its 2019 earnings report, which was released Wednesday, the company said it had also reached a settlement with the U.S. Attorney for the District of Massachusetts, which is “intended to resolve the criminal investigation of the incident” and remains subject to court approval.
U.S. Attorney Andrew Lelling’s office says Columbia Gas has agreed to plead guilty to “violating a minimum safety standard of the Natural Gas Pipeline Safety Act.” As a result, Columbia Gas will pay a fine of more than $53 million and will be subject to monitoring during a three-year probationary period.
Last July, NiSource announced it had settled all class-action lawsuits related to the incident for a total of $143 million.
“Eversource is the right partner for Columbia Gas,” said Mark Kempic, chief operating officer of Columbia Gas of Massachusetts. “While we have taken significant restoration and safety steps over the past 17 months, we acknowledge that events have led many to lose trust in Columbia Gas. We believe that Eversource’s proven track record of investing in its infrastructure, employees and operations to enhance system reliability, combined with its deep familiarity with the region and our operations, will enable Columbia Gas of Massachusetts to be a part of a strong local gas distribution company.”
The sale to Eversource Energy remains subject to regulatory approvals and customary closing conditions. NiSource says Eversource has agreed to assume certain liabilities of Columbia Gas, which will not include any liabilities for fines or civil claims related to the Greater Lawrence Incident.
The deal is expected to close by the end of the third quarter.
Meanwhile, NiSource is reporting full-year net income of $328 million, compared to a net loss of $65.6 million the previous year. You can view the full earnings report by clicking here.