The first of what is expected to be a stream of lawsuits against Columbia Gas following the explosions in the Merrimack Valley last week were filed Tuesday, as the utility sought to make amends with a $10 million donation to a charitable fund for residents who may go weeks without gas service.
The lawsuits marked the onset of the financial toll that Thursday’s gas-leak explosions are likely to take on Columbia Gas and NiSource.
The credit-rating agency Moody’s Investors Service said Tuesday that the explosions “could result in the deterioration of each company’s financial position and lead to a more contentious regulatory relationship.”
Moody’s pointed out that a pipeline explosion in San Bruno, Calif., in 2010 resulted in more than $500 million in liability claims. While insurance covered the claims, shareholders of Pacific Gas & Electric had to cover $4 billion in costs and penalties, according to Moody’s.
More than 80 explosions and fires were reported across Lawrence, Andover, and North Andover late Thursday afternoon, causing widespread property damage and the evacuation of thousands of people. One person was killed, and more than two dozen injured.
Columbia Gas has been replacing older, leak-prone cast-iron and steel pipes in the area, to comply with directives from state and federal regulators that utilities plug leaks and improve the safety of their networks. While the cause of the explosions is under investigation, officials have said they suspect that gas was flowing into the pipes at much higher pressure than normal.
Citing information from federal regulators, US Senators Edward Markey and Elizabeth Warren of Massachusetts on Monday said that pressure readings in the gas pipes in the area were as high as 6 pounds per square inch, or about 12 times the normal rate.
Gas industry specialists said that’s far above what low-pressure systems’ gas pipes and household appliances are built to handle.
Mark McDonald, president of NetGas Consulting, a Boston company that investigates gas explosions, said appliances have regulators that help manage pressure, but they cannot withstand significant surges.
“Anything more than a pound or two will either damage the regulator or bypass it,” McDonald said. “It’s not designed to run at that pressure, and it’s going to fill the house up with gas.”
McDonald and others also said that the older cast-iron pipes Columbia is replacing cannot withstand large increases in pressure. Richard Kuprewicz, a national expert on pipeline safety, said readings of 6 pounds per square inch in a low-pressure, cast-iron system would be a serious problem.
“Cast iron doesn’t take high pressure real well at all,” said Kuprewicz, who serves as a safety and technical advisor to the US Pipeline and Hazardous Materials Safety Administration.
Following the catastrophe on Thursday, Columbia said it would accelerate the replacement of 48 miles of pipes to return service to more than 8,600 customers in the three municipalities. That, Kuprewicz said, “tells you they’ve got a pretty extensive problem in their system.”
“No company is going to put that system back in operation if they think it’s damaged,” he added. “The last thing they want to do is put gas back in that system and blow up other homes.”
In a letter late Tuesday, Markey and Warren lashed out at Columbia and Eversource, saying they were confusing people who are not in the affected areas. They had temporarily shut off gas to thousands of homes as a precaution until the impact zone could be delineated, but the senators argued a lack of communication compounded the confusion.
“For the ongoing restoration efforts, it is important that residents have confidence that Columbia Gas and Eversource understand exactly whose gas service is still on and whose gas service has to be turned off,” the senators wrote.
Earlier Tuesday, Steve Bryant, president of the Columbia Gas Massachusetts unit, presented a $10 million donation to the Greater Lawrence Disaster Relief Fund, which was set up by Governor Charlie Baker, local officials, and nonprofit groups. “The people of these communities expect us to provide comprehensive and meaningful support, and we are committed to doing so,” Bryant said.
The donation came after sharp criticism of Columbia from officials and customers. Baker declared a state of emergency and appointed Eversource Energy, the Boston-based utility that provides gas service to other parts of Massachusetts, to oversee the recovery effort. Columbia has since set up claims centers in each of the three municipalities, providing immediate assistance such as for food and hotel costs.
Lawrence Mayor Dan Rivera welcomed the utility’s donation, saying the new fund will help residents and businesses get through a long period of disruption while waiting to be reimbursed by Columbia.
“That is a lot of money,’’ Rivera said. “This is a way for Columbia to show they are living up to their corporate responsibility. But we know this is going to be just one of the many ways they will be held to living up to their corporate responsibility.”
The fund will accept donations through the website of the Essex County Community Foundation.