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Columbia Gas, Merrimack Valley Communities Announce $80M Settlement For Gas Explosions

ANDOVER (CBS) -- Columbia Gas has reached a reimbursement settlement with Lawrence, Andover, and North Andover for the Sept. 13 gas explosions. A total of $80 million will be paid out to the three communities.

About $67.1 million has already been allocated, and the remaining money will be distributed soon, said Andover Town Manager Andrew Flanagan.

Of that, $57.1 million is for road restoration, $10 million is for expense reimbursement with Lawrence receiving 50 percent, Andover receiving 30 percent, and North Andover receiving 20 percent, and $12.8 million for claims/losses incurred by the municipalities, which was split into the same proportions.

"The settlement provides Andover with the resources to fully restore the impacted roads and sidewalks. Additionally, the settlement will allow us to make strategic investments in infrastructure improvements, upgrades to public facilities and enhancements to public spaces," said Flanagan.

He thanked Lawrence Mayor Dan Rivera, former North Andover Town Manager Andrew Maylor and interim North Andover Town Manager Lyne Savage.

Rivera said, "We all wish the value 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."

The mayor has remained unsatisfied with the level of accountability though. "If a kid from Lawrence picked up a gun and shot somebody, that kid would lose his ability to be free, go to jail for life. Somebody died here, if any of this was happening by normal person in any walk of life, the repercussions would not just be money," he said.

"Just as the gas disaster should not financially impact any of the residents or businesses, the taxpayers of the community should not have to foot the bill for the cost incurred to the local government in response to the disaster," Savage said. "This $80 million settlement ensures that we will be made whole."

Newly appointed President of Columbia Gas of Massachusetts Mark Kempic thanked the communities for their patience. "We wish this didn't happen obviously. However, our goal now is to put people back in the position they would've been if it didn't happen," he said. "We believe that this settlement represents the best possible outcome, a very reasonable solution for the customers and the communities...This is a big milestone in our journey to move forward but it's a very important milestone but it's not the last milestone so we will remain committed to moving the three communities forward."

Columbia Gas still needs to install new boilers or furnaces for 875 customers and settle 630 more claims.

The total cost of repairs is expected to be about $1.2 billion, said the company. A portion will be covered by insurance so customers will not have to pay the difference.

Since the explosions, Andover Fire Chief Michael Mansfield said the new normal includes a number of gas-related 911 calls. "They are more on edge. We are responding to anywhere between 10 to 17 gas-related calls on a weekly basis, and I would anticipate that's going to last for quite some time," he said.

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