Blast Victims Fault NorthWestern Energy

BY PAT HILL

It took more than three months for cleanup to begin in the aftermath of a huge natural gas explosion in downtown Bozeman, and chances are that it may take much more time than that before all the legal and technical aspects of the disaster are resolved.

An initial criminal investigation into the March 5 Bozeman disaster, which destroyed several downtown businesses and resulted in one death, determined that the blast resulted from a separation in a two-inch natural gas service line owned by NorthWestern Energy Corporation, which connected to the power meter behind Montana Trails Art Gallery. Thirty-year-old Tara Reistad Bowman, in the gallery at the time of the explosion, died as a result of the blast, which leveled the business. Boodles restaurant, Lilly Lu's children's store, and Tolstedt Architects were also destroyed, and adjoining businesses including the Rocking R Bar, the Pickle Barrel restaurant, and the Legion Club Bar were heavily damaged. The Rocky Mountain Rug Gallery and Starky's Authentic Delicatessen also sustained significant damage.

In the aftermath of the criminal investigation, legal jockeying among attorneys and insurance companies of the affected downtown businesses and NorthWestern Energy helped keep cleanup at a standstill until mid-June. The Rug Gallery and Starky's had to be shored up before cleanup could begin.

NorthWestern Energy held a press conference in Bozeman on June 15 to update the press and public regarding certain aspects of the disaster, including why cleanup was taking so long. Addressing the small crowd assembled at Bozeman City Hall for the press conference, NorthWestern Energy President and CEO Bob Rowe acknowledged that “there's frustration” over delays in the cleanup process, and said much of the time delay revolved around insurance issues.

“It's my understanding that cleanup is beginning to proceed,” Rowe said. “It's very difficult for everyone involved. It typically takes months to investigate…so many parties are involved…and coordination can be very difficult. We're not in control of what happens with the insurance companies.”

But the small crowd gathered for the June 15 press conference seemed more interested in what NorthWestern Energy's next move was, not the insurance companies. Responding to a “$64-dollar question” from one business owner affected by the blast, whether NorthWestern Energy was going to pay for damages not covered by individual insurance policies, Rowe said that “legal liability is the hardest question to answer.”

“The service line was NorthWestern Energy's responsibility…isn't that true?” Rowe was asked. He responded again that liability for the explosion had not yet been established, and refused to speculate about any other potential liable parties.

“I honestly don't know,” Rowe said. “The investigation is proceeding.” Rowe speculated that the service line in question may have been separated immediately prior to or during the explosion.

Much of that investigation centers around that service line, which was due to be examined at the Stork Twin City Testing Laboratory in St. Paul, Minnesota, beginning on June 17, coincidentally the same day that cleanup began in earnest downtown. A NorthWestern Energy press release handed out at the June 15 press conference explained that “The earliest date the metallurgical laboratory and all other interested parties' experts were available was June 17...”
“We would like to report a clear-cut explanation for the accident,” the NorthWestern Energy press release concludes, “but conducting the necessary tests and analyses, which includes coordinating our efforts with those of the many other interested parties and their experts, is time-consuming…we anticipate that we will not have a more complete picture…until late summer.”

When asked if he would have done anything different in the weeks following the explosion, Rowe said he would have talked to affected business owners downtown sooner.
“Certainly there are some conversations I wish I'd had earlier,“ said Rowe. “I met with the owners of the Rocking R this morning…I wish I would have met with them much earlier.”
Mike Hope, Vice President of Operations at the Rocking R Bar, has been one of the more vocal downtown business owners questioning NorthWestern's role in the recovery effort. He told the Pioneer “he really didn't learn anything new” in his conversation with Rowe.
“I wish I wouldn't have gotten out of bed [to see Rowe],” said Hope. “I got no answers…nothing happened [as a result of the conversation], but I didn't expect it to.”

Hope suggested that the June 15 press conference was “a response to our sign,” which read Thanks for Nothing NorthWestern Energy, hung in front of the destroyed Rocking R. The sign has since been removed (Hope said it was stolen twice), but he told the Pioneer he plans to hang the sign back up again. Similar signs are also hanging at various businesses owned by Jalal Neishabouri, owner of the Rocky Mountain Rug Gallery, who told the Pioneer that NorthWestern Energy has not acted in good faith with him. NorthWestern Energy spokesperson Claudia Rapkoch told the Pioneer that Neishabouri's “issue [is] due in part to a payment issue.” She said power was shut off to more than a dozen of Neishabouri's properties because of past due power bills. Power remains shut off at Neishabouri's office at the intersection of 7th Avenue and Main Street.

“All steps taken were well within the guidelines for disconnecting a customer,” she said. “We've proposed an offer to him…to my knowledge there's been no response.”

Hope said he didn't hang the Rocking R banner until Neishabouri's power was turned off. He said that one good-faith approach NorthWestern Energy could have offered all the affected businesses downtown would have come in the form of an advance payment bond, essentially a guarantee that advance monies issued to a party will be returned if contractual obligations are not fulfilled—in other words, advancing funds to affected businesses for cleanup downtown would be returned if it is determined that NorthWestern Energy is not liable for the explosion. Hope said that NorthWestern was offered the advance payment route but declined, instead giving a $1 million tender, much like the deductible on an insurance claim, to American International Underwriters (AIU) Holdings. Until last March, AIU was known as the Property Casualty Insurance arm of the controversial American International Group (AIG), which the Federal Government had to bail out of financial ruin last year.   

“We're moving forward…that's progress,” Hope said, “Montana Ready Mix has done a great job cleaning things up. As for NorthWestern Energy…they had an opportunity to do an advance payment…they didn't.”
Rapkoch agreed that the energy company did consider advance payment, but instead paid AIU the $1 million tender.

“Doing so doesn't adjust the claims process,” she said. “But AIU now pays any claims directly…not NorthWestern. Under-insurance occurred for some business owners, unfortunately.” Rapkoch said that with over 20 different parties involved, from business owners to insurance companies, “we have to work through all the protocol…working for a consensus.”

“An end result that everyone agrees with…does take time,” she said. “It's not a simple…not an easy process…to progress in a manner that is thorough and reasonable. As for cleanup, it's out of our control. It's been released to the property owners and their insurers.”

“This has been one of the toughest things I've ever had to deal with in my life—personally or professionally,” said Hope. “But we can rebuild. There's some things you can't do, though…you can't bring a life back. When the human element enters into the picture, you do the right thing. I have no faith in NorthWestern Energy that they'll do the right thing.”

“It is natural that there are going to be times not everyone agrees with what we're doing,” said Rapkoch. “We wish we would have met with some of those affected business owners sooner. We want to be a part of the rebuilding effort. We want to be a very valuable member of the community. Everything we've done to date has been as a result of feedback from interviews with business owners downtown and the community itself.”