Columbia Gas to pay $80M to communities affected by fires, gas explosions

Columbia Gas to pay $80M to communities affected by fires, gas explosions

LAWRENCE, Mass. — The gas company responsible for explosions and fires that killed one person and caused extensive property damage throughout the Merrimack Valley has settled a lawsuit filed by the communities, according to a press release issued Monday.

Town leaders in Andover, Lawrence and North Andover announced a settlement  of $80 million has been reached between the towns and Columbia Gas.

Columbia Gas will reimburse the three communities, repair roadways and restore neighborhoods.

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Andover Town Manager Andrew Flanagan, Lawrence Mayor Dan Rivera, Interim North Andover Town Manager Lyne Savage, Police and Fire Chiefs and DPW Directors in all three communities, and Columbia Gas representatives gathered in Andover for the announcement Tuesday.

Columbia Gas will pay up to $80 million, including $57 million to cover curb-to-curb road repairs, $10 million for expense repairs and $12.8 million will cover claims and losses incurred by the municipalities.

"It is inevitable that we will be asked whether this was the best agreement that could have been negotiated on behalf of our communties. The answer is an emphatic yes. We explored all avenues, including litigation, and quantified the cost and benefits of each option available to the three communities." Andover Mayor Andrew Flanagan said. "It will take years to fully recognize the benefits of the settlement. We ask for your continued patience as the magnituge of the work will take several years to complete."

He said of the $80 million total, $67.1 million had "already been transferred to the communities."

"It provides much needed money to pay the bills that would otherwise fall to tax-payers," Lawrence Mayor Dan Rivera said. "We all wish the number was higher, but if you take into account the time value of money and the cost of lengthy litigation ... this is a good deal."

The funds will be divided among the municipalities based on the scope of restoration work and associated claims.

Roadway Repair Work:

Lawrence: $31.91 million
Andover: $13.965 million
North Andover: $11.3 million

The $10 million for expense reimbursement will be divided into a $5 million share for Lawrence, $3 million for Andover and $2 million for North Andover.

"We are committed to restoring people back to where they were before this happened," Columbia's newly appointed President Mark Kempic said. "Thank you to the residents of Lawrence, Andover and North Andover for your strength, your patience and your risilience."

The remainder will be divided up into shares of not more than $6.4 million for Lawrence, $3.85 million for Andover and $2.56 million for North Andover.

According to the release, 50 miles of roadways in the communities were dug up and patched to accommodate the necessary repairs to the gas system in the Merrimack Valley.

"This $80 million settlement ensures that we will be made whole," North Andover Interem Town Manager Lyne Savage said.

All three communities will conduct their own repair work and will be reimbursed by Columbia Gas.

Inadequate planning and instructions led to a Columbia Gas contractor over-pressurizing a distribution system in the Merrimack Valley and causing the explosions and fires, according to an initial review from the National Transportation Safety Board.