LAWRENCE — Hours after announcing that Columbia Gas will pay the city $43.3 million to repave damaged roads and cover other loses it suffered following the Sept. 13 gas disaster, company president Mark Kempic told the City Council Tuesday night that the utility will pay the city up to $1.4 million more in annual property taxes based on the added value of the 40 or so miles of piping it replaced.
The new payments will increase Columbia Gas's annual property taxes in the city to as much as $3.2 million, up from $1.8 million it paid before the disaster. The city this year expects to collect just under $70 million in real estate and personal property taxes – which is a tax on machinery and infrastructure – so Columbia Gas's payment could amount to nearly 5 percent of the city's total tax levy going forward.
In five minutes of what he called a “high-level overview,” Kempic also said Columbia crews have begun replacing the heating equipment that it tentatively repaired last fall in its “rapid relight” program that was intended to restore service to buildings that lost it in the gas disaster, before winter set in. The company repaired damaged gas furnaces rather than replace them because the repairs took less time, Kempic said.
Columbia crews have replaced 48 furnaces since the work began three weeks ago, Kempic told the council. He said about 550 more will be replaced in Lawrence and the Andovers, which also were struck by the gas disaster.
Other work also is underway in the three communities, Kempic said. He said crews are restoring lawns that were damaged when service lines from streets into buildings were dug up last fall, and also are replacing paving stones, sidewalks, trees and shrubs on the properties. He said that project is 92 percent done and will be fully completed within two weeks.
Kempic said Columbia also is replacing shut off valves at what he called regulator stations, where large amounts of gas pass through before being distributed to homes and businesses. The valves automatically shut off gas when pressure gets too high or low.
Kempic said most of the claims that homeowners and businesses have filed against the company have been paid, but said 625 still remain to be resolved.
Several councilors pressed Kempic about the details of the work and about the company's future.
Councilor Marc Laplante, whose South Lawrence district includes neighborhoods that suffered the most in the gas disaster, pressed him about whether Columbia Gas will remain viable in the face of the $1.6 billion the disaster is estimated to cost the company.
Kempic noted that Columbia gas is “part of a larger operation” — referring to NiSource, its parent company – that is able to absorb much of the cost, and he said the company's insurance companies will also be paying some of the bill.
The gas disaster occurred when high pressure-gas was routed into low-pressure lines, causing explosions and fires that damaged or destroyed hundreds of homes in the three communities and forced thousands to move to shelters, hotels or trailers for up to three months while the gas infrastructure was replaced. A Lawrence teenager was killed on Chickering Street when a chimney collapsed on his car. His family recently settled with Columbia for an undisclosed amount.
Beyond the $43.3 million Columbia Gas has agreed to pay the city of Lawrence to repave the streets the company dug up to replace pipes after the disaster, it also will pay $20.75 million to Andover and $15.86 million to North Andover, Kempic announced Tuesday at a press conference in Andover attended by Lawrence Mayor Daniel River, interim North Andover Town Manager Lyne Savage and Andover Town Manager Andrew Flanagan.