Columbia Gas Parent Co: Gas Explosions Will Cost Us $600 Million

ANDOVER, MA — Restoration, lawsuits and other expenses for the deadly 2018 Merrimack Valley gas explosions will cost the gas company's parent company some $600 million, they said in their quarterly earnings call Wednesday. While insurance is covering over a billion dollars for them, they will need to issue $500 to 700 million in stocks in 2020 to account for the remaining costs. Overall, NiSource, the Columbia Gas parent company, reported a net loss of $7.2 million in the third quarter of 2019.

The company's estimated cost, announced on the conference call with financial analysts, was unchanged from the second quarter. It does not include any potential fines or penalties. Last week, the state of Massachusetts opened two new investigations into the company, after the National Transportation Safety Board found that the explosions were caused by "weak engineering management."

The explosions resulted from a human error by a Columbia Gas crew in the process of replacing a cast iron gas line with a plastic line. High pressure gas was inadvertently allowed into a low pressure system, resulting in explosions that killed one, injured 22, and damaged 131 structures across Andover, Lawrence and North Andover.

The company filed for a full $255 million insurance payout for replacing the gas distribution system, they said on the call.

In response to analyst questions, the company also updated investors on its restoration efforts in the region, and said that their goal is for the moratorium on non-emergency work in Massachusetts to be lifted.

"The moratorium we agree with and are aligned with the Department of Public Utilities [on]," said Chief Financial Officer Donald Brown. "It relates to our work to restore trust and confidence."