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Nelson County Service Authority denies pipeline proposal

Nelson County Service Authority denies pipeline proposal

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ARRINGTON — A month after the Nelson County Service Authority’s Board of Directors deadlocked on a vote related to a rate and connection fee that would be used in the sale of water to Atlantic Coast Pipeline, the board voted to deny authorizing the figures Thursday.

The board, which consists of three new members appointed since last month’s meeting, voted unanimously against setting a rate of more than 10 cents per gallon and a connection fee of $500,000 for ACP.

All five members — Gary Sherwood and David Hight and newly appointed members Jesse Rutherford, Ernie Reed and Justin Shimp — voted against the measure.

If approved, it would have allowed ACP to purchase 40,000 gallons of water per day for the horizontal directional drilling method, sourced from Lake Monacan in Stoney Creek, and would have resulted in about $3.5 million in revenue over two years for the service authority. Instead, ACP is obtaining water from a different source.

Reed said he opposed the rate for multiple reasons, including the contract possibly creating “significant liabilities and ongoing issues that could legally and administratively tie up the service authority staff and the county,” and the board doesn’t know who would be the signatory on the contract.

Shimp said he doesn’t think the project fits the role the service authority plays in providing water to the county.

“In the vision of the county, I don’t see mass construction projects or industrial process of this scale is something that’s called for, so I don’t see the need for a rate structure to accommodate it. Beyond that, there’s lot of other things to discuss, but at that point, it ends for me right there,” Shimp said.

Rutherford said although he never wants a corporation to feel that the service authority is not open to discussion, the ACP proposal isn’t worth the risk the county could be taking if the rate and contract were approved.

“When it comes down to this agreement and looking at the price number we have on there, I’m not in favor of either of those. I don’t think either of them fit what I see as the risk factor and what we might have to come up with for this county,” Rutherford said. “I don’t think that this is a deal we want to be looking into just yet. I’m not against being open for continued discussion though.”

Sherwood, who voted to approve the rate at last month’s service authority meeting, said he “so much” wanted to approve the rate because the contract could be financially beneficial to the service authority, but he was “nervous about what the complications could be.”

Hight said that since the last meeting when he voted to approve the rate, “a lot of information has been revealed, and I’ll leave my comments at that.”

The figures the board voted against were significantly higher than the rates paid by the NCSA’s existing customers in the area. The special rate of 10 cents per gallon was more than 10 times the regular rate, and the proposed $500,000 fee was over $400,000 more than the normal fee for the 3-inch connection ACP would require.

ACP proposed both the special rate and connection fee to the authority months ago, according to George Miller, executive director of the service authority.

Setting the special rate and connection fee was necessary for the authority to move forward with finalizing a preliminary contract to sell water to ACP. That water would have been used in construction of the pipeline near Wintergreen, where a horizontal directional drilling method will bore a path for the pipeline beneath the Blue Ridge Parkway. The drilling stretches from Nelson County, in the Beech Grove Road area, into Augusta County.

According to Jim Bowling, the service authority’s Charlottesville-based legal counsel, although the rate and connection fee proposed by ACP in the preliminary contract were denied, ACP could have come back to the service authority asking to become a regular customer and pay the regular rate and connection fee.

In response to Bowling’s advice, the service authority board unanimously approved a new requirement that starting Thursday, any applicant wishing to purchase more than 100,000 gallons of water per month would have to come before the board for approval.

With the new requirement, Rutherford said ACP’s proposal is “dead.”

“It is currently done, gone,” Rutherford said after the meeting.

According to ACP officials, they’ve already moved on to another option for securing the water.

Aaron Ruby, spokesman for ACP’s lead partner Dominion Energy, has said ACP believes an agreement with the service authority would have been “the best solution for Nelson County,” but said ACP has secured another source to meet all the water needs for construction activity that will take place in the area.

According to Ruby, ACP will truck water to the drilling site daily, and about 10 tankers will make about 10 trips to and from the site each day during construction, which is expected to begin soon.

Before the board voted to deny the rate, two of the 16 Nelson County residents who attended Thursday’s meeting, spoke in opposition of the rate for the interstate, 600-mile, natural gas pipeline and preliminary contract between the service authority and ACP.

Faber resident Vicki Wheaton said voting on the rate and connection fee was “very premature” because ACP doesn’t have all that’s required to start construction.

“Even if it all goes through, don’t make it easy for them. … You might be forced into it, or they might go somewhere else and someone else is going to make the money, but at least your conscience will be clean for future generations of everybody here,” Wheaton said.

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