Communities Impacted by Merrimack Valley Disaster Get $80M From Columbia Gas

The utility blamed for a series of natural gas explosions in Massachusetts in September has agreed to pay $80 million to three communities to cover road repairs and other associated costs of the disaster, officials announced Tuesday.

The explosions and fires Sept. 13 in Lawrence, Andover and North Andover were triggered by over-pressurized gas lines. One person died, dozens were injured, and more than 100 structures were damaged. Thousands of customers were left without natural gas service, including heat and hot water, during the winter months.

Andover Town Manager Andrew Flanagan, Lawrence Mayor Dan Rivera, and Interim North Andover Town Manager Lyne Savage joined representatives from Columbia Gas at the Andover Public Safety Building to announce the settlement.

Flanagan said $57.1 million of the settlement will be divided between the three communities and go toward road restoration. Lawrence will receive $31.91 million, Andover $13.965 million and North Andover $11.3 million.

Ten million dollars for expense reimbursement toward municipal claims will be divided into $5 million for Lawrence, $3 million for Andover and $2 million for North Andover. The remainder of $12.8 million will be divided between the three communities and go toward claims and losses.

Rivera said he wished the amount was greater but that it "represents the best effort of the municipalities to get the most dollars from Columbia Gas."

"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 Rivera. "We all wish the number was higher, but if you take into account the time value of money and the cost of lengthy litigation into account, this is a good deal." 

Flanagan said he was pleased with the amount of the settlement, saying the resolution "will improve the quality of life for residents and businesses impacted by the gas disaster."

"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," he said.

Savage said her community was especially impacted by the disaster, citing an increase in public safety departments and overtime costs.

"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," said Savage.

Fifty miles of roadways in the Merrimack Valley were dug up to replace gas mains and Columbia Gas said all three communities will be paid back for the enormous expense that came with all the work.

Columbia Gas President Mark Kempic called the settlement the "best possible outcome" and thanked the communities for their "strength, patience and resilience."

"We wish this didn't happen, obviously. However, our goal now is to put people back into the position they would have been if it didn't happen," Kempic said.

NiSource Inc., the parent company of Columbia Gas of Massachusetts, said in a quarterly report to investors last week that the potential financial costs of the disaster have jumped to more than $1.6 billion.