HomeMy WebLinkAboutNC0056731_Plan of Action_20210507STATE OF NORTH CAROLINA
UTILITIES COMMISSION
RALEIGH
DOCKET NO. W-1036, SUB 0
BEFORE THE NORTH CAROLINA UTILITIES COMMISSION
In the Matter of
Unauthorized Abandonment of Wastewater
Utility Service in Grande Oaks Subdivision,
Durham County, North Carolina, by Sedgefield
Development Corporation
ORDER APPOINTING NEW
EMERGENCY OPERATOR,
APPROVING PROVISIONAL
RATES, REQUIRING AUDIT,
AND REQUIRING
CUSTOMER NOTICE
BY THE COMMISSION: By letter dated December 1, 2020, and filed in this docket
on February 1, 2021, Old North State Water Company, LLC (ONSWC) has requested to
be released from responsibility as the emergency operator of the wastewater system in
Grande Oaks Subdivision (Grande Oaks) in Durham County, North Carolina, and that
Envirolink, Inc. (Envirolink), be appointed as the new emergency operator.
By letter dated December 8, 2020, and filed in this docket on January 4, 2021,
Envirolink requested to be appointed the new emergency operator of the Grande Oaks
wastewater system effective October 1, 2020. Envirolink has served as the contract
operator of the facility since ONSWC was appointed emergency operator.
The Public Staff presented this matter at the Commission's Staff Conference on
February 8, 2021, and recommends that an Order be issued appointing a new emergency
operator, requiring audit of the current emergency operator (ONSWC), and granting
provisional rates subject to refund and true up. Based on the Public Staff's
recommendation, and the record as a whole, the Commission makes the following
FINDINGS OF FACT
1. Grande Oaks, located off Bivens Road in northern Durham County, North
Carolina, was developed in 1986 by Sedgefield Development Corporation (Sedgefield).
The water system was conveyed to Heater Utilities, Inc., which is now Aqua North
Carolina, Inc. (Aqua). The water system was interconnected to the Heater Utilities, Inc.'s
Greymoss water system. The wastewater system consists of a collection system, a small
1 ONSWC was appointed emergency operator for the wastewater utility system serving
Grande Oaks Subdivision effective 12:01 a.m., on July 6, 2017, pursuant to the Commission's Order
Appointing New Emergency Operator, Approving Rates, Requiring Audit, and Requiring Customer Notice
issued on July 12, 2017, in Docket No. W-1036, Sub 0.
package wastewater treatment plant, and an effluent discharge line with discharge to
Crooked Creek. The discharge of the wastewater effluent was authorized by NPDES2
permit number NC0056731, which has expired. This wastewater system was permitted
to Sedgefield by the North Carolina Department of Environmental Quality (DEQ), Division
of Water Resources (DWR). Sedgefield did not apply for a certificate of public
convenience and necessity.
2. Sedgefield was administratively dissolved on November 17, 1993, by the
North Carolina Secretary of State for failure to file annual reports.
3. On June 10, 1993, the Public Staff filed a motion in this docket requesting
the Commission to issue emergency authority pursuant to N.C. Gen. Stat.§ 62-116(b) to
Crosby Water and Sewer, Inc. (Crosby), to operate the wastewater collection and
treatment system at Grande Oaks. The Public Staff further moved that Sedgefield, the
developer of Grande Oaks, be ordered to appear before the Commission and show
cause, if any, why it should not be found to have been furnishing wastewater utility service
for compensation in Grande Oaks without authority from this Commission in violation of
N.C.G.S. § 62-110, and to have abandoned such service without the prior consent of the
Commission in violation of N.C.G.S. § 62-118.
4. On June 11, 1993, the Commission entered an Order in this docket
declaring that a real emergency exists with respect to the wastewater system owned and
operated by Sedgefield in Grande Oaks as defined in N.C.G.S. § 62-116(b). The
Commission appointed Crosby to serve as emergency operator.
5. The Commission in its Order dated August 26, 1993, in this docket made
findings of fact including:
2. Sedgefield has demanded and accepted compensation from
residents of Grande Oaks Subdivision for sewer utility service.
3. Sedgefield Development Company is a public utility subject to
the jurisdiction of the North Carolina Utilities Commission.
4. Sedgefield has never applied for a certificate of public
convenience and necessity to provide sewer utility service in
Grande Oaks Subdivision.
7 Sedgefield stopped paying operating costs and power to the
sewer system was cut off in April 1993.
8. The Division of Environmental Management took over
operation of the sewer system in April 1993 using emergency
funds which were to expire on June 16, 1993.
2 The National Pollutant Discharge Elimination System (NPDES) permit program, created in 1972
by the federal Clean Water Act (CWA), helps address water pollution by regulating point sources that
discharge pollutants to waters of the United States. Under CWA, the Environmental Protection
Agency (EPA) authorizes the NPDES permit programs to state, tribal, and territorial governments, enabling
them to perform many of the permitting, administrative, and enforcement aspects of the NPDES program.
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9. Prior to the Commission's appointment of an emergency
operator in its June 11, 1993, Order, a real and pressing
emergency existed that sewer service could be interrupted to
Grande Oaks customers.
6. The Commission in its August 26, 1993 Order concluded that Sedgefield
has furnished wastewater utility service for compensation in Grande Oaks without
authority from this Commission in violation of N.C.G.S. § 62-110 and has abandoned
such service without the prior consent of the Commission in violation of N.C.G.S.
§ 62-118. Sedgefield agreed to the appointment of an emergency operator under the
control of the Commission to operate the system.
7. On October 28, 1997, Crosby filed a letter with the Commission stating
Crosby was negotiating with Envirolink, to sell Crosby's assets related to the operation of
wastewater facilities. By Order dated March 30, 1998, in Docket No. W-1036, Sub 0,
Envirolink was appointed emergency operator for the Grande Oaks wastewater system.
8. By letter filed on June 8, 1998, Envirolink requested to be discharged as
emergency operator and requested that John Poteat be appointed as emergency
operator. By Order dated July 22, 1998, in Docket No. W-1036, Sub 0, the Commission
appointed John Poteat d/b/a Enviroment Plus (Poteat) as the emergency operator for the
Grande Oaks wastewater utility system.
9. By letter filed on November 8, 2001, in Docket No. W-1036, Sub 0, jointly
signed by Poteat and Thomas Harden d/b/a LTH 3 Environmental Associates (Harden),
Poteat requested to be discharged and Harden requested to be appointed emergency
operator of the Grande Oaks wastewater utility system and the monthly flat rates be
increased to $112 per residence. By Order dated December 18, 2001, in Docket
No. W-1036, Sub 0, the Commission appointed Harden as emergency operator and
approved the $112 per month flat rate.
10. On May 9, 2007, a Notice of Violation from the Division of Water Quality
(DWQ) (now known as the Division of Water Resources) of the North Carolina
Department of Environmental Quality was delivered to Jerry Tweed, Utilities Engineer,
Public Staff Water Division, and filed in this docket on that same date for the Grande Oaks
wastewater utility system stating that:
a. the facilities NPDES Permit has been expired since
January 31, 2003;
b. the discharge of wastewater from the Grande Oaks wastewater
treatment facility to waters of the State without a NPDES Permit
is a violation of G.S. 143-215.1(a)(1);
c. the responsible charge of this facility must submit an NPDES
application; and
d. seven other necessary renovations should be performed.
11. On July 8, 2010, DWR sent a Compliance Evaluation Inspection, filed in this
docket on July 22, 2010, to Jerry Tweed for the Grande Oaks wastewater utility system,
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stating there still was not a NPDES Permit and this wastewater system continued to
violate N.C.G.S. § 143-215.1(a)(1). This document also summarized the status of plans
to interconnect the Grande Oaks wastewater collection system to the City of Durham
wastewater system.
12. DWR sent a Compliance Evaluation Inspection dated June 13, 2011, to
Jerry Tweed, Public Staff, filed in this docket on July 11, 2011, updating the City of
Durham's interconnection plans and summarizing the wastewater system's
non-compliance including lack of a NPDES Permit.
13. Public Staff Utilities Engineer Jerry Tweed sent a letter to DWR dated
July 14, 2011, filed in this docket on July 14, 2011, providing some of the history of the
wastewater system, and stated that the Public Staff, the Commission, and the emergency
operator are not the permittee. Jerry Tweed encouraged interconnection to the City of
Durham wastewater system.
14. Jerry Tweed worked to obtain the interconnection with the City of Durham
from 2005 until his retirement in 2013. The projected capital costs of interconnection
materially increased to comply with North Carolina Department of Transportation
specifications. In 2017, David Furr, the Director of the Public Staff Water Division, met
with City of Durham officials on a number of occasions to encourage the interconnection.
It is uncertain when, at what cost, and if, there will be an interconnection. The City of
Durham has indicated that it is working on a project to make the interconnection. The
Grande Oaks wastewater system continues to be operated without a permittee and
without an NPDES permit.
15. There continues to exist an emergency situation in which there is an
imminent danger of losing adequate wastewater utility service due to the abandonment
of service by Sedgefield in Grande Oaks and the request to resign by emergency operator
ONSWC, justifying the appointment of a new emergency operator in accordance with
N.C.G.S. § 62-116(b) and N.C.G.S. § 62-118(b).
16. There are currently 14 customers receiving wastewater utility service in
Grande Oaks.
17. Envirolink has stated that it is willing to be appointed to serve as emergency
operator of the wastewater utility system serving Grande Oaks.
18. The Public Staff recommends that, in the interest of maintaining adequate
utility service, the Commission immediately appoint Envirolink as emergency operator
and establish a provisional rate of $112 per month (the currently approved rate), subject
to refund and true up.
19. ONSWC has not filed all the monthly reports as required by the
Commission's July 12, 2017 Order appointing ONSWC as emergency operator.
20. The Public Staff recommended that an audit of ONSWC's records be
performed prior to discharging ONSWC as emergency operator.
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21. Aqua, which provides water service to Grande Oaks, is now providing billing
and collection services for the emergency operator.
EVIDENCE AND CONCLUSIONS
The evidence for these findings of fact is found in the Commission's records. These
facts are uncontroverted. The Commission, therefore, concludes that an emergency
exists; that Envirolink, Inc., should be appointed as the emergency operator of the
Grande Oaks wastewater utility system as of October 1, 2020; that an audit of ONSWC's
records as emergency operator should be performed prior to ONSWC being discharged
as the emergency operator; that the Public Staff's recommended provisional rate should
be approved subject to refund and true up; and that customer notice should be provided.
IT IS, THEREFORE, ORDERED as follows:
1. That Envirolink. Inc., is appointed emergency operator for the wastewater
utility system serving Grande Oaks Subdivision in Durham County, North Carolina, as of
October 1, 2020;
2. That Envirolink is authorized to charge a monthly provisional rate of $112
per customer, subject to refund and true up;
3. That the following provisions are adopted by this Order:
a. That Sedgefield, its officers, directors, and shareholders, if any, are
hereby ordered to offer all reasonable assistance to the emergency operator.
Sedgefield shall not dispose or divest itself of any wastewater utility property, real
or personal, without the prior written consent of the Commission;
b. That Envirolink, as emergency operator, is authorized to obtain
billing and collection services from Aqua. Aqua is authorized to provide billing and
collection services to the emergency operator for Grande Oaks;
c. That the emergency operator shall maintain full records of receipts
and expenses and shall file with the Commission and the Public Staff, by the end
of the subsequent month, a summary financial report on a quarterly basis. The first
report shall be filed on or before March 31, 2021, for the quarter ending
December 31, 2020; and
d. That the emergency operator shall have charge of the daily operation
of the wastewater system in Grande Oaks, and the emergency operator's duties
and responsibilities shall include, among others, the following:
Operations, inspections, and testing of the wastewater
system;
Billing of all customers and collection of bills;
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(iii) Routine and emergency maintenance and repair;
(iv) System renovations and additions necessary to maintain
adequate wastewater service;
(v) Quarterly accounting to the Utilities Commission and the
Public Staff of all rates collected, expenses incurred, checks
written, and all monies spent; and
(vi) Providing a telephone number to customers for routine and
emergency calls and a mailing address.
e. That the emergency operator may contract with any person or
corporation to carry out any of the duties necessary for operation, maintenance,
repair and renovations of the wastewater system, but the emergency operator
alone shall have the ultimate responsibility to see that such duties are performed;
f. That the emergency operator, in the performance of its duty, shall be
free to seek assistance from customers of the wastewater system, plumbers,
engineers, attorneys, and such other persons as may be necessary for the
performance of its duties and responsibilities;
g. That the emergency operator shall, when it becomes necessary in
the performance of its duties, seek the assistance of DEQ, the Commission, the
Public Staff, and the Durham County Health Department;
h. That the emergency operator shall collect from the customers of the
wastewater system such rates and assessments as may be approved by the
Commission and shall be fully authorized to bill and collect said rates and
assessments and to disburse such of those funds as may be necessary to provide
safe, reliable, and adequate wastewater utility service to the customers. Any
customer who fails to pay the bill(s) authorized by this paragraph shall be
disconnected by the emergency operator as provided by the orders, rules and
regulations of the Commission;
i. That the emergency operator shall be entitled to all available records
relating to the wastewater system, and those records shall include a list of
customer names, addresses, and billing records;
j. That the emergency operator shall keep records of all monies
collected through the rates and assessments and all monies expended in the
operation of the wastewater system. In order to protect the customers' investments
in the wastewater system in the event the wastewater system should be sold or
revert to Sedgefield, the emergency operator shall to keep a separate record of all
monies and assessment collected from customers and expended on improving
and upgrading the wastewater system, including the installation of new plant,
replacement plant, rebuilt equipment, and the cost of labor associated with those
improvements whether performed by the emergency operator or a contractor hired
by the emergency operator;
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k. That the emergency operator shall pay only those liabilities incurred
by the emergency operator on and after the date of the appointment of the
emergency operator. Those liabilities shall be defined as the liabilities arising from
the emergency operator's operation of the Grande Oaks wastewater system
pursuant to Commission Order. The disbursements by the emergency operator
shall be made from the separate account set up by the emergency operator. The
emergency operator shall account for any funds advanced by it for the operations;
That Sedgefield, its officers, agents, servants, and employees, if any,
shall not:
(i) Interfere with the emergency operator's operation of the
wastewater utility plant, including the pumps, easements,
rights -of -way, treatment facilities, mains, collection lines,
storage or holding facilities, meters, filters, taps, or effluent
disposal lines;
(ii) Receive or attempt to collect any wastewater bill payments or
monies for wastewater service provided by the emergency
operator; or
(iii) Alter, impair, or remove any of the wastewater utility plant.
m. That the appointment of an emergency operator shall continue until
terminated by an Order of the Commission finding that the emergency has ended
and that the emergency operator is no longer required pursuant to N.C.G.S.
§ 62-118(b) to provide public wastewater utility service to the customers of the
Grande Oaks wastewater system;
n. That the emergency operator may petition the Commission at any
time to be discharged as the emergency operator herein. The emergency operator,
prior to its discharge, shall provide an acceptable accounting to the Commission
of all monies collected and disbursed during its tenure as emergency operator, as
well as the amounts due and owing the emergency operator at the time of its
discharge for its services performed as emergency operator. The emergency
operator upon filing a petition for discharge shall also mail a copy of said petition
to the Durham County Health Department and DEQ; and
o. That this docket shall remain open for further reports and motions,
from the customers, the emergency operator, the Durham County Health
Department, the DEQ, the Public Staff, and for further orders of the Commission.
4. That the Schedule of Provisional Rates, attached as Appendix B, is
approved on a provisional basis, subject to adjustment and true up upon review and
approval of the actual costs of operating the wastewater system. Said Schedule of
Provisional Rates shall become effective for service rendered on and after
October 1, 2020, and is deemed to be filed with the Commission pursuant with N.C.G.S.
§ 62-138;
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5. That the following items of information shall be made available to Envirolink
by ONSWC:
a. Customer information for each residence connected to the system,
containing at a minimum, customer name, service address, billing address, and
contact phone numbers (home and work);
b. Copy of latest electrical power bill for the wastewater treatment plant
(needed for transfer of service);
c. Copy of latest water bill, if any, for the wastewater treatment plant
(needed for transfer of service);
d. Copy of system plans and specifications with any noted discoveries
or changes by the current owner for the past 12 months; and
e. Copies of all monitoring reports and evaluation completed by the
emergency operator for the past 24 months.
6. That the Public Staff is hereby requested to conduct an accounting audit of
the books and records maintained by ONSWC as emergency operator of the
Grande Oaks wastewater system and file the results of its accounting investigation,
including recommendations regarding how to treat outstanding debts or amounts, if any,
claimed by ONSWC. Upon resolution, the Commission will issue a further order
discharging ONSWC as emergency operator;
7. That Aqua North Carolina, Inc. shall continue to be the billing agent for the
emergency operator and compensated at the rate of $2 per customer per month. Aqua
shall continue to forward any funds it receives for wastewater utility service to the
emergency operator;
8. That copies of this Order shall be served on H.O. Chesson, Jr., the former
President of Sedgefield, Shannon Becker, President of Aqua, and the North Carolina
Department of Environmental Quality, Division of Water Resources;
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9. That the Notice to Customers, attached as Appendix A, shall be mailed with
sufficient postage or hand delivered by Envirolink to all customers in Grande Oaks no
later than ten days after the date of this Order; and that Envirolink shall submit to the
Commission the attached Certificate of Service, properly signed and notarized, not later
than 15 days after the date of this Order.
ISSUED BY ORDER OF THE COMMISSION.
This the 9th day of February, 2021.
NORTH CAROLINA UTILITIES COMMISSION
Kimberley A. Campbell, Chief Clerk
Commissioner ToNola D. Brown -Bland did not participate in this decision.
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STATE OF NORTH CAROLINA
UTILITIES COMMISSION
RALEIGH
DOCKET NO. W-1036, SUB 0
BEFORE THE NORTH CAROLINA UTILITIES COMMISSION
In the Matter of
Unauthorized Abandonment of Wastewater
Utility Service in Grande Oaks Subdivision,
Durham County, North Carolina, by Sedgefield
Development Corporation
APPENDIX A
NOTICE TO CUSTOMERS
NOTICE IS HERBY GIVEN that Old North State Water Company, LLC (ONSWC),
has requested to be discharged from its duties and responsibilities as emergency
operator of the wastewater utility system serving Grande Oaks Subdivision in Durham
County, North Carolina, effective October 1, 2020. The Commission has issued an Order
in this docket regarding the appointment of a new emergency operator. The Commission
ordered the following:
1. That Envirolink, Inc., is appointed as the emergency operator of the
wastewater utility system serving Grande Oaks Subdivision in Durham County, North
Carolina, effective October 1, 2020. Envirolink has served as the contract operator of the
wastewater system since ONSWC was appointed emergency operator on July 6, 2017;
2. That Envirolink, Inc., is authorized to charge a provisional monthly flat rate
of $112 per customer, subject to refund and true up; and
3. That the Public Staff is hereby requested to conduct an accounting audit of
the books and records maintained by ONSWC as emergency operator of the Grande
Oaks wastewater system and file the results of its accounting investigation, including
recommendations regarding how to treat outstanding debts or amounts, if any, claimed
by ONSWC. Information regarding this matter can also be assessed from the
Commission's website at www.ncuc.net, under Dockets portal, using the Docket Search
feature (i.e., for Docket No. key: W-1036 Sub 0).
This the 9th day of February, 2021.
NORTH CAROLINA UTILITIES COMMISSION
11-1.cada
Kimberley A. Campbell, Chief Clerk
APPENDIX B
SCHEDULE OF PROVISIONAL RATES
for
SEDGEFIELD DEVELOPMENT CORPORATION
(Envirolink, Inc., Emergency Operator)
for providing wastewater utility service in
GRANDE OAKS SUBDIVISION
Durham County, North Carolina
Flat Sewer Rate: (Residential Service)
$112 per month 1i 2i
Connection Charge: Actual Cost
Reconnection Charges:
If sewer service cut off by utility for good cause $15.00
Bills Due: On billing date
Bills Past Due: 15 days after billing date
Billing Frequency: Shall be monthly for service in arrears
Finance Charges for Late Payment: 1 % per month will be applied to the unpaid
balance of all bills still past due 25 days after the
billing date.
1/The $112 per month is a provisional rate subject to refund and true up.
2i The $112 per month flat rate includes $2 per month, retained by Aqua North Carolina, Inc., for billing and
collection. Aqua North Carolina, Inc., provides water utility service in Grande Oaks Subdivision.
Issued in Accordance with Authority Granted by the North Carolina Utilities Commission
in Docket No. W-1036, Sub 0 on this the 9th day of February, 2021.
CERTIFICATE OF SERVICE
I, , mailed with sufficient
postage or hand delivered to all affected customers the attached Notice to Customers
issued by the North Carolina Utilities Commission in Docket No. W-1036, Sub 0, and the
Notice was mailed or hand delivered by the date specified in the Order.
This the day of , 2021.
By:
Signature
Name of Utility Company
The above named Applicant,
personally appeared before me this day and, being first duly sworn, says that the required
Notice to Customers was mailed or hand delivered to all affected customers, as required
by the Commission Order dated , 2021, in Docket No. W-1036, Sub 0.
Witness my hand and notarial seal, this the day of , 2021.
(SEAL) My Commission Expires:
Official Signature of Notary
Notary's printed or typed name, Notary Public
Date