While the report does not blame Nstar for the July 24, 2002, explosion that ripped apart a Main Street apartment building, it does say there is ``reason to believe violations of state and federal pipeline safety regulations may have occurred.''

Nstar vehemently denies any wrongdoing, pointing to an earlier report by the state that showed none of their equipment was at fault in the blast.

Killed in the fire were 5-year-old Violet Carey and her 4-year-old sister, Iris, who were trapped in a second-floor bedroom.

The children's grandfather, Paul Germain of Milford, is still searching for the reason his granddaughters died.

``There really are no definitive answers yet,'' said Germain. ``I'm sure we'll get them down the road. We have to, really.''

The 34-page DTE report claims Nstar did not properly monitor and maintain the gas pipeline leading from the street into the basement of the three-story building.

Among Nstar's failings were: the absence of records proving lines were tested to establish a maximum operating pressure, failure to monitor a steel service line in the basement for corrosion, and a lack of periodic leak checks of lines inside the building.

On the morning of the explosion, the girls' parents, Tara and Heath Carey, managed to free themselves from the mangled remains. They could touch and hear their children, but could not get close enough to free them.

Three other families, including a pregnant woman who gave birth to a healthy baby boy days later, escaped with minor injuries.

Heath Carey declined to talk about the DTE report when reached at his Onset home last night. He and his wife - who gave birth to a son named Lexington last month, a year after Heath underwent a vasectomy reversal - will hold a press conference today. ``We haven't even seen the report,'' Heath Carey said. ``I can't say anything. We're in a tough place right now.''

Their attorney offered few comments yesterday as well.

``Our clients have asked us to fully explore the deficiencies in Nstar's system so that other tragedies like this one can be avoided,'' Edward Swartz and Alan Cantor of Swartz & Swartz, said in a statement.

Nstar plans to appeal the findings to the full DTE commission, said spokesman Mike Durand.

``We strongly disagree with the findings of the new DTE staff report. The DTE previously conducted a comprehensive investigation with the state fire marshal's office and the state's independent safety expert. That report concluded that our equipment operated properly,'' he said.

``We are dismayed that there is no reference to that conclusion on this new report.''

The DTE has proposed that Nstar enter into a consent order in which it would pay a penalty of $200,000 and make a number of procedural changes intended to ensure that the company tracks down potential leaks.

Nstar can also negotiate a lower fine or ask for a hearing.

An August report released by the state suggested the building's gas system may not have been to blame for the explosion.

A private West Boylston lab contracted by the state tested pipes, fittings and meters pulled from the wreckage, and determined none of those materials could be linked to the blast.