State utility regulators Friday sharply criticized National Grid for “persistent disregard” of pipeline safety issues in its natural gas operations and reduced the company’s request for a rate increase to send a message “that corporate irresponsibility will not be tolerated.”
The strongly worded rebuke by the Department of Public Utilities comes just two weeks after the explosions and fires in the Merrimack Valley involving the gas pipelines of a different utility, Columbia Gas of Massachusetts.
Moreover, National Grid has been engaged in a lengthy lockout of some 1,250 unionized gas workers over contract issues, and the union contends replacement workers have committed safety violations during their absence.
The DPU reduced rate increases National Grid had sought for its two gas utilities, Boston Gas and Colonial Gas, by a combined $97 million, noting the department has “frequently” issued enforcement actions and penalties against the companies for various infractions.
“The Companies’ persistent disregard for federal and state pipeline safety regulations, as evidenced by these numerous enforcement actions, shows a cavalier disregard for Department requirements and a failure to abide by pipeline safety laws and regulations to the detriment of the Companies’ ratepayers,” the DPU said in its order.
In a statement, National Grid noted that the rate increase authorized by DPU will allow it to invest in its gas distribution system.
“We are committed to providing safe and reliable service to our customers and this decision will enable us to continue meeting our public safety obligations while we improve and update our system,” the company said.
The DPU authorized National Grid to increase rates beginning Nov. 1, by about 8 percent, or $88 a year, for customers in the Boston Gas territory, and by 4 percent, or $38 a year, for Colonial Gas customers.
During the rate proceeding, Attorney General Maura Healey had argued that National Grid should not be awarded the higher rates because of its safety record. On Friday, Healey’s office said it was “pleased” with the decision.
“Especially in the aftermath of the devastating explosions in the Merrimack Valley, all Massachusetts gas customers deserve a system that is reliable and affordable,” her office said in a statement.
While the strong language is unusual for rate cases that are usually leadened with dense financial analysis, the DPU itself is under scrutiny following the Sept. 13 catastrophe that caused more than 80 gas fires and explosions in Andover, Lawrence, and North Andover and led to the death of one man. Some 8,600 customers and businesses are still without gas service.
Just weeks before the incident, a federal pipeline safety agency auditing the DPU’s oversight operations found the agency had just two engineers conducting field inspections because of a wave of retirements. Earlier this week, the DPU said it would hire an independent evaluator to conduct a sweeping safety review of all the gas distribution networks in Massachusetts.
Meanwhile, the Baker administration on Friday announced a $1 million emergency loan fund for businesses in Lawrence, Andover, and North Andover affected by the gas incident. Businesses can apply for loans of up to $50,000.
Andover Town Manager Andrew P. Flanagan said the fund “will provide our businesses with the resources to make the investments needed to reopen and get their employees back to work.”
The National Transportation Safety Board is investigating the cause of the disaster, which is believed to have occurred when there was higher-than-normal gas pressure in the underground pipes.
Columbia Gas donated $250,000 to the business fund, and made a $10 million donation to a separate disaster relief fund. But on Thursday, the utility was hit with another lawsuit from residents that said the company’s negligence forced the plaintiffs to endure “horrific trauma.”
More than two dozen Merrimack Valley residents filed the 11-page civil complaint in Essex Superior Court, alleging Columbia Gas used “antiquated and unreasonably dangerous” steel and cast-iron pipes that were “prone to break and to leak gas excessively causing a significant and well-known risk for explosion.” The lawsuit also named Columbia Gas parent company NiSource Inc.
A Columbia Gas spokeswoman declined to comment, instead referring to previous statements in which the company’s president expressed sympathy for the victims, and promised “to do what we can to help them at this terribly difficult time.”
Governor Charlie Baker pressed Columbia Gas to hire a former Navy Seabee officer and owner of local construction company to oversee the massive recovery effort underway in the Merrimack Valley. The utility has said it must replace some 48 miles of older, leak-prone pipes before it can restore gas service to the area, and has pledged to have the work done by Nov. 19.
Meantime, relief workers, accompanied by National Guardsmen and plumbing and electrical specialists, have been assessing the electrical systems and appliances in many of the homes and providing hot plates and space heaters to victims.