Eversource to buy Columbia Gas Massachusetts for $1.1B
Eversource Energy has reached an agreement to buy the Massachusetts natural gas assets of Columbia Gas for $1.1 billion, a deal announced hours after federal prosecutors ordered Columbia Gas to cease Bay State operations and pay a $53-million fine in connection with organizational failures.
Federal prosecutors on Wednesday announced Columbia Gas agreed to plead guilty to federal pipeline safety act violations in connection with the explosions that rocked Lawrence, Andover and North Andover on Sept. 13, 2018, killing one person, injuring 22 others and damaging more than 130 homes and businesses.
The deal between Eversource and NiSource, the parent company of Columbia Gas, could more than double the number of natural gas customers Eversource has in Massachusetts, from 300,000 to about 630,000.
Columbia Gas currently serves 60 communities in Massachusetts, including the Brockton and Springfield areas. Eversource has 300,000 natural gas customers and 1.5 million electric customers in 51 Massachusetts communities.
Under the agreement, which was announced early Wednesday evening, NiSource would remain responsible for the liabilities related to the September 2018 incident. The deal still requires the approvals of the Massachusetts Department of Public Utilities and U.S. Department of Justice. Mass. DPU is in the midst of its own investigation of Columbia Gas's role and responsibility in the Merrimack Valley incident.
Eversource said Columbia Gas customers would be integrated into the company's ongoing carbon reduction initiative, predicted improved safety and reliability through infrastructure upgrades, and cited advantages associated with locally-based gas dispatch and emergency response. Eversource also expressed a "commitment to maintain appropriate staffing levels that enable safe and reliable operations."
"Eversource is uniquely positioned to leverage the strengths of our current and future workforce, facilities, gas supply resources and business processes to achieve greater operational efficiency, while continuing to deliver on our unwavering commitment to safety and superior service for our customers," Jim Judge, chairman, president and CEO of Eversource, said in a statement.
The two companies over the next month plan to work with regulators and consumer advocates to "review the investments needed to operate the system, to minimize rate impacts and review key benefits for customers."
At a press conference Wednesday, U.S. Attorney for Massachusetts Andrew Lelling and others described the fine as the largest ever imposed under the federal Pipeline Safety Act and said NiSource had agreed to "undertake their best reasonable efforts" to sell Columbia Gas of Massachusetts. Columbia Gas disregarded known safety risks during a pipe replacement project that began in Lawrence in 2016, prosecutors said, and failed to guard against the over-pressurization that led to the disaster in the three Merrimack Valley communities.
Eversource has a total of 4 million gas, electric and water customers in Connecticut, Massachusetts and New Hampshire.
New equity and debt will be used to finance the transaction, Eversource said, with Goldman Sachs and Ropes & Gray working on the deal.
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