Indiana utility faces criminal probe in natural gas explosions

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Federal prosecutors are conducting a criminal investigation into the natural gas explosions and fires that rocked three communities near Boston in September, an Indiana-based utility company said Thursday.

Merrillville-based NiSource, the parent company of Columbia Gas of Massachusetts, said it is cooperating with the criminal investigation by the office of Andrew Lelling, U.S. attorney for Massachusetts. The utility, which has about 830,000 natural gas and 470,000 electric customers across 32 counties in northern Indiana, made the disclosure in its quarterly financial disclosure report to the U.S. Securities and Exchange Commission.

NiSource and its subsidiary were served initial grand jury subpoenas on Sept. 24, shortly after the Sept. 13 explosions and fires that killed one person, injured 25 others, and damaged or destroyed more than 130 structures across Lawrence, North Andover and Andover, the company said in its filing.

The report didn't provide further information about the nature of the investigation, and a company spokesman declined to elaborate Thursday. Lelling's office also declined to comment.

"We are cooperating with all investigations and inquiries into the Lawrence event, including the criminal matter. However, we can't speak specifically to any of those inquiries," said NiSource spokesman Ken Stammen.

In a separate quarterly earnings report also released Thursday, NiSource said the explosions had cost the company about $462 million, money it expects will be "substantially recovered" through insurance.

"We are deeply humbled by what happened in Massachusetts, and realize that much work lies ahead of us to finish the service restoration in the Lawrence area, and to regain the trust of our customers and communities," company CEO Joe Hamrock said in a statement.

The gas explosions are also being investigated by the National Transportation Safety Board, which said in a preliminary report last month that over-pressurized natural gas lines were to blame.

That investigation has so far found the company failed to account for critical pressure sensors as it planned for upgrades to the pipeline system, parts of which are cast-iron pipes more than a century old.

The utility company also faces legal actions from victims of the explosions, including a possible class action lawsuit. Gov. Charlie Baker's administration has hired an independent evaluator and ordered all natural gas companies to review their pipeline procedures.

Thousands of customers, meanwhile, remain without natural gas service for hot water, heat and cooking.

Columbia Gas has said it will need until at least early December to fully restore service. Earlier this week, it announced it had completed a major milestone: replacement of about 44 miles of pipeline.

The company said Thursday it has restored service to 1,510 residential meters and 147 business meters, or roughly 20 percent of the total impacted area. More than 7,000 individuals are in temporary housing and about $37 million in claims have been paid out, the company said.

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