Waukesha water bid will stop without official's signature

Oct. 10, 2012
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By Don Behm of the Journal Sentinel

Oct. 10, 2012 0

Waukesha's request to divert Lake Michigan water inland to serve its residents will grind to a halt at the end of this year if Oak Creek's top utility official persists in his refusal to sign and carry out a water sales agreement with Waukesha.

Last week's Oak Creek Common Council resolution expressing the city's willingness to supply water to Waukesha will not, by itself, keep the application process moving forward, a state environmental official said.

The resolution simply authorized Steve Yttri, Oak Creek's water and sewer utility general manager, to sign a negotiated letter of intent.

Yttri confirmed this week that he will not sign the agreement "unless ordered to do so."

His bosses on the city's utility commission did not order him to sign when they met Tuesday.

Though Yttri and the commission approved the agreement with Waukesha before the common council vote, they now want to delay signing it until they can go to court to challenge a state Public Service Commission ruling in an unrelated rate case that does not involve Waukesha.

The PSC last week shifted a minimum of $376,375 in costs of service from Oak Creek's wholesale customer community of Franklin to its retail base made up of Oak Creek residents and businesses, according to Yttri.

In Yttri's view, the PSC expects his residents to subsidize costs of delivering water to Franklin. If he cannot fully recover costs of distributing water to an existing wholesale customer, Yttri said, he does not want to add another large wholesale customer with Waukesha.

On Wednesday, Oak Creek asked the PSC for a hearing on its order in a May 2011 rate increase request. The rate increase was filed before the city began negotiating with Waukesha.

The state commission is likely to hold a new hearing within 30 days, PSC staff said.

Oak Creek also served the PSC on Wednesday with copies of a lawsuit it will file Thursday in Milwaukee County Circuit Court seeking to overturn the state order, Yttri said.

Waukesha Water Utility General Manager Dan Duchniak remains confident that the water deal he negotiated with Oak Creek will work out in the end. It would cost Waukesha an estimated $183 million to build the pipelines and pumping stations needed for a lake supply from Oak Creek.

Annual water payments from Waukesha - projected at $300,000 to start in five years and growing to $1.2 million a year in 2030 - will benefit Oak Creek and Franklin by lowering rates paid by residents as much as 25%, he said.

Yttri is not confident those payments would be upheld in a state rate case.

"The PSC has the power to override such agreements," he said.

"Oak Creek is willing to continue talks with Waukesha, but only if Oak Creek can attain equitable cost-of-service treatment for its existing wholesale customers," Yttri said.

Watch and wait

Duchniak can only watch Oak Creek go through the appeal process. There is no certain timetable for him to provide the state Department of Natural Resources with a signed agreement.

A signed letter of intent to supply water to Waukesha is needed before the DNR can complete its review of Waukesha's request for lake water, said Eric Ebersberger, water use section chief for the DNR in Madison.

This level of commitment is needed before the department can answer the basic question of the review: whether the request complies with all requirements in a Great Lakes protection compact for granting an exception to a ban on diversions, Ebersberger said.

A letter of intent with details on costs of moving the water inland and returning water, in the form of treated wastewater, to the lake is needed before the DNR can finish work on either a draft technical review or environmental impact analysis of the request, he said. The department will not hold a public hearing on the precedent-setting diversion application before publishing those documents.

Ultimately, without showing compliance with the regional compact, the DNR will not forward the Waukesha application to the other seven Great Lakes states for their review. The compact requires the unanimous consent of the eight states to divert water out of the Great Lakes drainage basin.

Waukesha is finishing a few reports requested by the DNR so it could complete its review of the diversion application. In one request, the DNR asked for more details on the environmental impact of discharging its treated wastewater into the Root River.

The city's application stated its preference to discharge to Underwood Creek in Brookfield regardless of which lakeshore community supplied it with water. At the time, Waukesha was considering negotiations with Milwaukee, Oak Creek and Racine.

Talks with Milwaukee didn't get started, and negotiations with Racine underscored that the distance between it and Waukesha made water service too costly.

Ebersberger expected all information to be compiled this fall so the DNR could complete the review process by year's end and schedule a public hearing in early 2013. That timetable is up in the air without a letter of intent, he said.

In May of this year, Duchniak said he would need approvals of all the states, a water pact with a supplier and construction contracts to build pipelines in place by June of 2013.

Work must be started by then for the city to comply with a court-ordered June 2018 deadline to provide radium-safe water to its customers, according to Duchniak.

Waukesha is asking Wisconsin and the seven other Great Lakes states to approve diverting up to an average of 10.9 million gallons of water a day from the lake by 2050.

The city pumped an average of 6.9 million gallons a day in 2011, and that is projected to grow to an average of 10 million gallons a day by 2035.

Approval of the diversion would allow Waukesha to stop using deep wells drawing radium-contaminated water from a sandstone aquifer.

Don Behm thumbnail
About Don Behm

Don Behm reports on Milwaukee County government, Milwaukee Metropolitan Sewerage District, the environment and communities in southeastern Wisconsin. He has won reporting awards for investigations of Great Lakes water pollution, Milwaukee's cryptosporidiosis outbreak, and the deaths of three sewer construction workers in a Menomonee Valley methane explosion.

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