The pilot reported that he launched his balloon from a local park and about 45 to 50 minutes after launch, he briefed his passengers for landing and began a descent. The pilot opted to forgo the initial landing area, due to obstacles, for a new landing area about 300 yards to the southwest. The new landing area required the pilot to cross a road with powerlines that ran parallel to it. The pilot began the descent and believed he had sufficient altitude to clear the powerlines. However, the descent path took the balloon into the vicinity of the powerlines, so the pilot applied full burner and attempted to ascend. The balloon continued to descend, and the pilot told his passengers to “get down.” The basket impacted the powerlines which resulted in electrical arcing. The pilot applied more heat and the balloon broke free from the powerlines. The balloon drifted about 2 miles southwest and came to rest in a field. The pilot sustained minor injuries and the two passengers sustained serious injuries. The balloon sustained substantial damage to the basket and the flying wires. The pilot believed that the balloon was caught in a downdraft caused by thermal activity near the ground. He also stated that there was no direct evidence of mechanical failure. A post accident inspection of the balloon after the accident did not find anything abnormal with the balloon that would have precluded normal operation.