Deadly gas explosions near Boston destroy homes

Updated 5:45 p.m. ET

(Bloomberg) – The Massachusetts governor declared a state of emergency after explosions along a natural gas distribution system operated by NiSource Inc. killed one person and injured more than 25 others. He tapped another utility owner to oversee the recovery.

Eversource Energy would now be “in charge,” Governor Charlie Baker said at a news conference. The move came after local officials criticized the operator of the pipeline system, NiSource’s Columbia Gas of Massachusetts, for responding too slowly.

“We heard one thing, and something else happened,” Baker said. Declaring a state of emergency gives the state authority to appoint a different company to manage the response, he said.

Columbia Gas President Steve Bryant apologized for the incident, saying it was “the sort of thing that a gas distribution company hopes never happens.” The company respects Baker’s decision to bring on Eversource but rejects claims that it didn’t respond quickly enough, Bryant said.

“There’s no one else who could have acted on this more rapidly than we did,” Bryant said.

NiSource shares fell almost 12% Friday, the most since 2001.

Previous violations

Columbia Gas has had seven violations totaling $100,000 dollars since being acquired by NiSource in 2010, according to an email from Peter Lorenz, communications director for Massachusetts’s Executive Office of Energy and Environmental Affairs. The violations included inadequate gas standards, improper pressure testing and failing to follow procedures and federal pipeline safety regulations.

The blasts erupted Thursday afternoon on the network in Lawrence, Andover and North Andover. Massachusetts State Police reported 39 incidents, and the National Transportation Safety Board said the blasts appeared to be pipeline explosions.

Lawrence Mayor Dan Rivera blasted Columbia Gas’s response in a news conference Friday, saying the company was the “last to act” after the incidents. Rivera said Columbia Gas was slow to react because it didn’t want to “foot the bill.”

NTSB Chairman Robert Sumwalt told reporters in Washington the agency sent a “go-team” of investigators to the area. The inquiry will include looking at the design of the pipeline, any recent maintenance or upgrades and the integrity of the management system, he said.

“This will be a multidisciplinary investigation,” Sumwalt said.

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1 p.m. ET

(Bloomberg) – Federal investigators were dispatched to three towns just outside Boston after dozens of explosions and fires along NiSource Inc.’s natural gas network left at least one person dead and 13 injured and displaced over 8,000 customers.

Massachusetts State Police reported 39 incidents on the network in Lawrence, Andover and North Andover on Thursday. The blasts appear to be pipeline explosions, the National Transportation Safety Board said Friday in a briefing. Shares of NiSource plunged as much as 11% to $25.03 at 10:22 a.m. in New York, the biggest intraday drop since November 2008.

NTSB Chairman Robert Sumwalt told reporters in Washington the agency sent a “go-team” of investigators that will arrive in the affected area at about noon local time to begin what he said is likely to be a long inquiry.

Utility working on gas lines immediately before explosions

“Certainly things we will be looking at will be the design of the pipeline system, any maintenance or upgrades that may have been done or in the process of being done on the pipeline, the integrity management system of the pipeline operator,” he said. “This will be a multi-disciplinary investigation, we’ll be looking at a number of things.”

Pipeline work before the explosions creates “a higher potential for a financial impact to the utility,” CreditSights Inc. analysts Nick Moglia and Andy DeVries said in a note to clients Friday.

“Unlike other gas utility explosions that unfortunately occur every few years, this one appears to have been caused by the utility working on the gas lines immediately before the explosions occurred,” the analysts said. That could point to a “higher potential for gross negligence rather than just a corroded pipe.”

Ken Stammen, a NiSource spokesman, said in an email he could not confirm the details cited in the analyst note.

Fatality & injuries

Leonel Rondon, an 18-year-old from Lawrence, died after an explosion sent a chimney crashing into his car, the Associated Press reported. Thirteen people were treated at Lawrence General Hospital for injuries, officials said.

One person remained in critical condition and was transported to a Boston trauma center, officials said during a press conference. Another was in serious condition, they said, and was undergoing surgery as of approximately 1:15 p.m. local time.

Officials believe the blasts were caused by over-pressurized gas lines, Andover Police Department Lieutenant Eddie Guy told NBC’s Today television show Friday morning. Columbia Gas of Massachusetts, the NiSource unit responsible for the local network, said in a statement that its crews would need to visit each of the 8,600 affected customers to shut off each gas meter and carry out a safety inspection.

Since 2007, units of NiSource have had at least five explosions on pipeline networks, in Kentucky, West Virginia, Tennessee and Louisiana, according to news reports.

Aging infrastructure

National Grid Plc, which operates the electric utility in the area, was asked to shut power to all of Lawrence, North Andover and pockets of Andover, spokeswoman Christine Milligan said. The supply cuts were affecting more than 18,000 customers as of 2:09 p.m., National Grid said on its website. The area is home to Phillips Academy Andover, whose alumni include George W. Bush and Humphrey Bogart.

Andy Klock, 44, was on a conference call Thursday at his home in Andover when his wife, Sarah, interrupted. “We need to evacuate,” she said.

She had received a text from the police department, instructing residents to turn off their gas and leave. Their gas still hasn’t been turned back on as of noon Friday.

In April, Columbia Gas filed a petition with the state’s Department of Public Utilities to increase annual revenues by $24.1 million in part to help the company replace aging infrastructure. All three towns were listed as areas where neighborhood lines would be replaced, the utility said on its website Thursday.

“Replacing leak-prone infrastructure is a leading priority,” the utility said in April. “However, it will take a number of years to eliminate the aging pipe from the gas distribution system.”

San Bruno

The incident, in an area that’s home to the famous Phillips Academy Andover whose alumni include George W. Bush and Humphrey Bogart, took place just as Hurricane Florence slammed the coast of the Carolinas farther south on the East Coast, threatening to leave 3 million homes and businesses without power.

The explosions — just days after the eight-year anniversary of a deadly blast on a PG&E Corp. gas transmission line in San Bruno, California — may intensify the growing opposition across New England to using gas to heat homes and produce electricity. The San Bruno tragedy killed eight people and triggered more than $1 billion in fines and penalties.

Some residents in Andover have been told they can return to their homes, city officials said early Friday. Lawrence Mayor Dan Rivera had asked impacted residents to evacuate. Two schools in Lawrence will be used as shelters for evacuees.

The Massachusetts Emergency Management Agency said the state’s mutual aid fire mobilization plan has been activated and that it was sending staff to the three towns, as well as four structural task forces. The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration is also sending a team to support the emergency response efforts, spokesman Bobby Fraser said in an email.