Communities, Columbia Gas Reach Agreement for Reimbursement and Roadway Repairs
$80 Million Provided to Lawrence, Andover and North Andover
ANDOVER — The leaders of Lawrence, Andover and North Andover announced today an $80 million settlement agreement reached with Columbia Gas of Massachusetts and its parent company, NiSource Inc. for reimbursement of expenses and major roadway repairs in the aftermath of the Merrimack Valley Gas Emergency.
In a settlement agreement reached among all four parties, Columbia Gas will pay up to $80 million, including:
- $57 million earmarked for curb-to-curb road repairs
- $10 million for expense reimbursement
- $12.8 million for claims/losses incurred by the municipalities
“I am pleased that we have reached a settlement agreement with Columbia Gas. This resolution will improve the quality of life for residents and businesses impacted by the gas disaster. The settlement, reached with the taxpayers’ interests in mind, provides Andover with the resources to fully restore the impacted roads and sidewalks. The settlement not only compensates Andover for the full cost of its response to the disaster, it also positions our community well for the future,” said Andover Town Manager Andrew Flanagan. “I want to thank the community for its patience and resilience as we recovered through the fall and winter and as we negotiated an agreement that will make our community whole again. Our work will begin immediately but it will take several years for this effort to fully recognize the benefits of the settlement. I’ve said since day one that we would be stronger communities and a stronger region in the wake of the disaster. This resolution represents a major step in making that commitment a reality. “
“This settlement represents the best effort of the municipalities to get the most dollars from Columbia Gas to fix what was broken during the Gas Emergency, including roads and parks, and it provides much-needed money to pay the bills that would otherwise fall to the taxpayers to support the recovery and restoration and settle claims,” said Lawrence Mayor Dan Rivera. “We all wish the number was higher, but taking the ‘time value of money,’ and the costs of lengthy litigation into account, this is a good deal.”
North Andover Statements:
“The local government of North Andover incurred real costs as a result of this disaster. Not only did we have to increase staffing in our public safety departments, we also had to rent and purchase additional equipment, and incur overtime costs in many of our non public safety departments,” said Lyne Savage, Interim Town Manager. “On top of all that, it will cost more than $500,000 to repair the damage caused by having to place 60 recreational trailers on Grogans Field. This settlement will cover all of those costs and more making the town financially whole.”
Added Andrew W. Maylor, Comptroller of the Commonwealth of Massachusetts, who was North Andover’s Town Manager at the time of the Gas Emergency: “There were so many consequences that resulted from the gas over-pressurization event. This settlement ensures that the trenches which were created to repair the gas lines and which now stand has a visual reminder of the scars left behind by this disaster will be replaced by a clean surface which will symbolize a fresh start for the communities.”
Background and Settlement Details:
Dozens of explosions and fires broke out shortly after 4 p.m. on September 13, 2018. One person was killed and several others were injured in the incident and its aftermath. Hundreds of homes were damaged, nearly 10,000 gas customers lost service and many thousands of appliances, furnaces, ovens and hot water heaters required replacement. In the recovery effort, nearly 50 miles of roadways in Andover, North Andover and Lawrence were dug up and temporarily patched to accommodate gas main replacement work, which lasted through December 2018.
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.
The remainder shall 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.
The three communities will perform their own repair work, which will be reimbursed by Columbia Gas. Work includes road repair in accordance with Massachusetts Department of Public Utilities standards and includes full, curb-to-curb street restoration, repair or replacement of sidewalks damaged as a result of the gas emergency, installation of ADA transitions, and replacement of damaged signs, street lights and traffic lights.
“We are pleased that we have reached an amicable resolution on these important issues. We recognize the tremendous impact the September event had on these communities and the larger-scale, more complicated work conditions than typically occur in relation to routine pipeline replacement work. For these reasons, we have been willing to go above and beyond to address the municipalities’ needs including fulfilling the request to repave curb-to-curb,” said Mark Kempic, President & Chief Operating Officer of Columbia Gas of Massachusetts. “Columbia Gas remains committed to restoring these communities to where they were before this tragic event. We appreciate the time and energy that each municipal leader has devoted to this effort. This agreement marks a significant milestone in the overall restoration efforts.”
The settlement was formally announced at a press conference earlier today at the Andover Public Safety Building, which houses the town’s Emergency Operations Center, or EOC. The Andover EOC was activated within an hour of the first reported fires and remained staff and operational for more than 10 days, during the initial response, assessment and first recovery operations.