HC President's Notes on 4/30/09 RELAC Mtg

Last night some of the cluster presidents met with [Aqua VA's] Greg Odell for an update on the RELAC situation. The CEO of RA also attended. Some of the main points follow:

• The system is not yet ready to start due to heavy accumulation of mud in the intake lagoon. There was also a broken pump which has been repaired. They hope to have it ready in the next week or ten days.
• AQUA plans to file for a rate increase in June. It would not apply to the upcoming cooling season. The amount they will request is not yet decided.
• They are going to be marketing RELAC soon; in addition to the idea of an outright buyer, Odell floated the idea of a contract operator who would not own but would operate the system for a fee. He didn't indicate whether AQUA would be interested in retaining ownership under such an arrangement.
• They have had preliminary designs prepared to extend the water inlet out into the lake (as I had long ago suggested), in order to get around the problem of shallow water, mud, etc. clogging the intake at the "lagoon" where the plant is located. The cost estimate is $136,000 and they will factor this into the rate increase proposal. Until the pipe extension is done, they will continue to need the diesel pumpset which we saw during the last two seasons, to ensure sufficient flow of water for cooling the chillers.
• AQUA is keeping open the option of pressing the golf course over their use of lake water for watering the greens. The court ruling, according to them, is not necessarily the last word, and Odell hinted that they have been talking with Virginia DEQ about unregulated water extraction from a public waterway without the required permits. (In my opinion this is a valid point- FS.)
• AQUA would consider upgrading the staffing at the plant in Reston to include customer service and management, based on strong negative feedback about the existing call center service; this would also be factored into a rate increase request.- There was discussion about revising the definition of when the season begins. The tariff reportedly calls for May 24 but most years it is much earlier depending on temperatures. Two problems they face are cleaning out the mud accumulated during winter and spring (which might be reduced when the intake pipe is built), and the heating switch-over at Heron House. Last night it was agreed it would be ready to start no later than May 15, but could begin in April if there are two days at 85 degrees.
• They will consider making available more service inside the homes, to give advice on maintenance, pipe and coil upgrades if feasible, replacement of valves, etc.
• As a regulated utility they can't take responsibility for actually doing work inside the house, but might consider recommending shops which are familiar with the technology and possible retrofit kits (additional coil and duct installed on upper floors, for ex.).
• There will be another meeting May 27 at 7:00 in the RA conference room. By then the cooling system will have started and people may have experiences to share.
• They are aware of the possibility of a covenant referendum, and hope it will not happen. AQUA says they would not "walk away" from a utility since they are a large corporation working in some 14 states with a reputation to protect. However, at the very end of the meeting Odell hinted this could happen if customers started leaving the system.

Regards,Fred