FEDS PROBING GAS COMPANY
Up to $450M in claims filed with Columbia parent NiSource
The parent company of Columbia Gas is cooperating with a criminal investigation from the U.S. Attorney’s office in Massachusetts related to the fatal disaster in the Merrimack Valley in September, the company said yesterday. Columbia parent NiSource said in a regulatory filing yesterday it had received grand jury subpoenas from the office of U.S. attorney for Massachusetts, Andrew Lelling, about two weeks after the fatal gas disaster. Lelling’s office declined to comment. Ken Stammen, a NiSource spokesperson, also declined to elaborate beyond the U.S. Securities and Exchange Commission filing. “I can confirm the U.S. Attorney's criminal investigation, but, I can’t speak to the specifics of it,” he said in a statement. “We are cooperating fully with this and all other investigations and inquiries into the Lawrence event.” Doug Sheff, an attorney who represents the family of Leonel Rondon, the 18-yearold who was killed by a gas explosion in September, said, “I don’t know the details of the investigation, but it seems to me if this company is being investigated criminally, there sure must have been awfully reckless behavior. Any investigation that can reveal information, regardless of whether it’s criminal or civil, is welcome. They want to get to the truth of who took away such a loving young man.” The scope of the U.S. attorney’s investigation remains unclear, as well as the nature and target of possible charges. It is unclear whether any other parties have been subpoenaed or appeared in front of the grand jury. A Lawrence City Hall spokeswoman said she was not aware of any subpoenas for city employees, and a spokeswoman for Feeney Brothers, the contractor performing the work that initiated the overpressurized gas line, also said no one associated with the company has received a subpoena or appeared in front of a grand jury. NiSource and Columbia are already facing federal and state investigations from regulatory agencies, including the state Department of Public Utilities and the National Transportation Safety Board. Yesterday, NiSource said it has received between $415 million and $450 million in claims from impacted residents and between $180 million and $210 million in other expenses related to the incident. NiSource chief financial officer Donald Brown said the company does not expect to pay out of pocket for the bulk of the claims and other costs. “Our insurance coverage is fairly broad to cover this kind of incident,” Brown said. “We’ve got total liability coverage of about $800 million and expect substantially all of these costs to be recovered through the process.” Brown said NiSource will have to cover the cost of replacing the damaged infrastructure, expected to cost between $135 million and $165 million.