efferson Utilities, Inc. February 13,2012 Mr. Walt hey, Director Environmental Engineering West Virginia Bureau for Public Health Office of Environmental Health Services Environmental Engineering Division 350 Capitol Street, Room 313 Charleston, WV 25301-3713 Re: Moratoria Lifting-Harpers Ferry Campsites //-O b58-uflfc Dear Mr. Walt Ivey: I am writing to formally request a structured lifting of the moratorium on new water customers in Jefferson Utilities’ (JUl)’s water system serving Harpers Ferry Campsites. As you know, JUI operates what we refer to as our Mountain System which previously consists of three separate water systems serving the communities of Keyes Ferry Acres, Harpers Ferry Campsites and Westridge Hills which are now being interconnected. Each of these systems has operated under moratoria on new customer connections for many years prior to their acquisition in 2000 by JUI. The water systems serving Keyes Ferry Acres and Westridge Hills have, until recently, had moratoria imposed by the West Virginia Public Service Commission (PSC). The water system serving the community of Harpers Ferry Campsites has moratoria imposed by the West Virginia Bureau for Public Health (BPH). The moratorium in Harpers Ferry Campsites was enacted by the BPH by order date September 22,1989. A copy of this order is included at Exhibit A in my attached direct testimony in PSC Case Number 11-0658-W-PC. The moratoria have been extremely burdensome on property owners in these communities. Additionally, the utilities have been denied revenue from new customers. The affect of the moratoria has caused the communities to wither, reducing the number of residencies and reducing property values. In fact, during the ownership of these systems by JUI, the customer total has dropped from 379 to 332; a loss of 47 customers or a 12.4% reduction. In 2001, JUI obtained approval from the West Virginia BPH for a plan to upgrade a substantial portion of all three systems under WVBPH Permit # 14,996. In 2001, Jefferson Utilities constructed a water treatment plant on Cardinal Trail (now Twilight Time Lane) in Harpers Ferry Campsites in conformance of that plan. 270 Industrial Boulevard e Kearneysville, WV 25430 0 (304)728-2077 e Fax: (304)728-7326 Page 2 West Virginia Bureau for Public Health In 2010 Pentree, Inc. completed plans for an upgrade and replacement of virtually all of the three Mountain water systems. The engineering plan was paid for with a Design Grant from the USEPA through the West Virginia BPH. The plans for this work were approved under West Virginia BPH Permit # 18,631. The plans included a directional drilled crossing of the Shenandoah River at Millville. This crossing is still being anticipated to be constructed by JUI when funding is available. However, we are proceeding with upgrades using the water sources in the Mountain Systems. In February of 2010, we received approval of a rate increase from the PSC. The rate increase included the implementation of a Line Replacement Surcharge. The proceeds from the surcharge were to be specifically used to replace designated lines in the Mountain Communities and in the Walnut Grove System. The surcharge is $12/month/customer. Annual revenues are approximately $330,000. We have been pursuing the construction improvements paid for with surcharge revenues in the Mountain System since late 2010. To date we have installed 15,287 feet of water line and 11,378 feet of electrical conduit. This work is being installed in conformance with BHP Permit # 18,631 being augmented with the raw water lines and conduits to deliver raw water to the Mountain water plant in conformance with BPH Permit # 14,996. Surcharge revenue expended in line replacement in the Mountain Systems has now totaled over $650,000. Our work to date has provided new water lines extending a 12” line from the water plant westward along Keyes Gap Road to Kelly Drive in Keyes Ferry Acres. This includes 6” and 8’extensions on Twilight Time Lane, Double Run Drive, Deer Run, Old Oak Lane, Bear Run, Kelley Drive and Cedar Hill Drive. New 2” lines have been installed on Lakewood Drive, Beverly Place, Stone Bear Lane and others. Three additional distant wells, Keyes Ferry Acres South Backup, Keyes Ferry Acres South, and Campsites R-Section wells are now tied into the Mountain water plant supplementing the well at the plant. Water to supply the new lines is treated with aquamag to sequester iron and manganese and disinfected at the Mountain water plant. The water plant has a 30,000 gallon clear well and pumping capacity to deliver over 500 gpm to the newly laid water lines for domestic and fire-fighting purposes. We also have installed seven fire hydrants on the new distribution system piping. In addition, we now have approximately 260 of the active services in the Mountain Communities metered. The present well capacity being delivered to the Mountain water plant from the 4 wells now tied in is approximately 93 gpm or 134,000 gpd. Based on the 210 customers now served from the Mountain water plant using 150 gpd/customer, total consumption would be 31,500 gpd. Accordingly, our present excess capacity is 102,000 gpd. The tie-in of the additional wells to the Mountain water plant and the Westridge wells will further improve our reserve source capacity. Page 3 West Virginia Bureau for Public Health At the end of 2011, we extended the new distribution system to tie in the R-Section and Partridge Lane Section of Harpers Ferry Campsites. This was planned in the first phase of work to be accomplished with surcharge revenues as was approved by the PSC. We are continuing pipe laying work in the Mountain System paid for with surcharge revenues. This work will extend an 8” line eastward along Cedar Hill Drive, then northward on Walnut Hill Drive and eastward on Burkett Road in order to extend the adequate new lines into the Westridge Hills Community. Under the present surcharge expenditure plan, we will be extending an 8” line to the Jeep Trail well located in Westridge. We are continuing to seek additional well source capacity in the Westridge community. The Jefferson County Commission drilled a well in Westridge which yields 50 gpm at a location 500 feet north of our existing Jeep Trail well. JUI is seeking an agreement to be able to use this new well to increase our source capacity. The Westridge aquifer produces better quality water with lower iron and manganese. JUI has already laid out a plan concept for how this well can be used. It could be readily incorporated into the existing Westridge System. The additional capacity would be available to all of the Mountain Systems once our pipe laying reaches the Jeep Trail well location. All water supplied to all of JUl’s customers in Harpers Ferry Campsites is supplied from the Mountain Water Plant. There is no longer any justification for a moratorium on service connections which can be made from the new lines installed in conformance with BPH Permit # 18,631. The water service supplied from these new lines is just as dependable and adequate in flow capacity and pressure as other public water systems, including Jefferson Utilities’ Valley System. Accordingly, we request that the BPH act to lift the moratorium for lots in Harpers Ferry Campsites which can be served from the new lines laid and from all extensions of these lines laid in conformance with BPH Permit # 18,631. We believe these areas are easily defined and will expand as additional new mains are laid and will not overburden the existing inadequate distribution system. In fact, the flow the existing distribution system is being improved by the temporary tie-ins to the new, much larger, lines. In Jefferson County, a water availability letter from the utility is required to obtain a building permit. Jefferson Utilities proposes to only issue those letters of availability for service from lines which have been replaced and lines which will continue to be replaced in accordance with BPH permit # 18,631. Last year, JUI requested approval for the same conditional lifting of the moratoria in Keyes Ferry Acres and Westridge Hills from the PSC. By Order dated January 17,2012 in PSC Case # 11-0658-W-PC, the PSC approved JUl’s petition to conditionally lift the moratoria. A copy of that order is attached. I am also including a copy of my direct testimony in PSC Case 11-0658-W-PC with all exhibits and a copy of the PSC Staff Memorandum in this Case. Page 4 West Virginia Bureau for Public Health Of course, Brad Reed and Alan Marchun are both familiar with the tremendous improvements that have been accomplished in JUl’s Mountain Water System. Please contact me if you or your staff wish to discuss this request further. I I Lee Snyder, President Enclosures cc: Sandra Squire, Executive Secretary, PSC Dandridge McDonald- Steptoe &Johnson Todd Swanson- Steptoe &Johnson Brad Reed- District Health Services FINAL JQINT STAFF MEMORANDUM TO: SANDRa SQUIRE DATE: August 11,2011 Executive Secretary FROM: RONALD ROBERTSON, E, JR. c, Staff Attorney $q PSt Q%\@'f SUBJECT: CASE NO. 11-0658-W-PC JEFFERSON UTILITIES, INC. On May 10, 2011, Jefferson Utilities, Inc. (JUI) filed a petition for Commission approval of a structured lifting of the moratorium on new water customer connections in its three (3) water systems (Mountain systems) serving the communities of Keyes Ferry Acres, Harpers Ferry Campsites and Westridge Hills in Jefferson County, West Virginia. Attached is the internal memorandum of Jonathan Fowler, P.E., Engineer, Engineering Division, that provides a background of JUI's Mountain systems, a description of each Mountain system and recent JUI's improvements in the Mountain systems.