Aqua Letter to Duke_20170413

A _ U A.
Shannon V. Becker, President n,.,,r,r.rn�r,irr-,
0:919.653.5770 • F:919.460.1788 • [e-mail] RECEIVEr
APR 25 2017
April 13, 2017 ' Nater Qualify Regis ;
Mr. Paul Draovitch
Senior VP Environmental Health & Safety Duke Energy
526 South Church Street
Mail Code ECUP
Charlotte, NC 28202
Dear Mr. Draovitch:
Aqua North Carolina (Aqua) provides water utility service to approximately 80 homes served
by three wells owned by Aqua and located within the half -mile compliance boundary from
Duke Energy's (Duke) Allen Street coal ash impoundment area. In May 2015, Aqua received
written recommendations, jointly issued by North Carolina's Department of Health and
Human Services and Department of Environmental Quality (DEQ), that water from these wells
should not be used for drinking and cooking because water from these welts presents an
increased health risk due to elevated levels of certain constituents associated with coal ash
impoundments. Since that time, Aqua has been actively working with our customers, DEQ and
Duke to address the issues that have arisen as a result of these notifications and HB 630. As
Duke is well aware, this issue has caused alarm among Aqua customers who receive drinking
water from our welts located within the compliance boundary.
Aqua personnel have spent a considerable amount of time with our affected customers, DEQ
and Duke trying to address these concerns. We have provided factually accurate information
to all. When others publicly attacked Duke, Aqua continued to work cooperatively with Duke
to find responsible solutions to address concerns about coal ash under HB 630.
Aqua recognizes that HB 630 requires Duke to present a plan to "establish permanent
replacement water supplies for each household that has a drinking water supply well located
within a one-half mile radius from the established compliance boundary of a coal combustion
residuals impoundment." It is Aqua's responsibility, as the owner of the drinking water
supply wells within this boundary that serve each affected household, to evaluate select one
of the options proposed by Duke. We have been providing updates to our customers as we've
received information, and are committed to ensuring they know and understand the
proposals before us. Our customers are our top priority, and we value them and the trust
they place in us. Our customers continue to be concerned about this issue and would like to
understand the options provided by HB 630 implemented as quickly as possible. They are
also concerned about their property values.
202 MacKenan Court, Cary, NC 27511 • AquaAmerica.com

In the Allen Proposed Permanent Water Solution submitted to DEQ on December 7, 2016,
Duke recommended abandoning the three Aqua supply wells located within the compliance
boundary in favor of interconnecting to the City of Belmont's water system through which
Aqua would purchase and supply water to its customers. In Duke's letter to DEQ dated March
24, 2017, which evaluates water treatment system solutions for Aqua's three wells, Duke again
suggests an interconnection and abandonment of Aqua's wells as the permanent solution of
choice versus filtration. Neither of these letters addressed compensation to Aqua for assets
rendered useless from the abandonment of these wells, as recommended by Duke. Duke has
verbally denied or been silent on our requests for compensation for the loss of our plant and
equipment and the expenses Aqua will incur to abandon these wells as a result of installing a
solution recommended by Duke and stemming from the coal ash issue that Aqua did not
cause.
Aqua only requests that we and our customers be held financially harmless from the final
agreed upon solution and is not looking to gain from this unfortunate situation. As such, Aqua
expects Duke to provide compensation in the amount of $60,000 (net book value) for the
assets that will become useless as a result of an interconnection with the City of Belmont's
water system as well as actual expenses (currently estimated to be approximately $10,000)
that Aqua will incur to abandon the three wells in accordance with applicable environmental
regulations, if the interconnect option is selected. Aqua has not requested reimbursement for
the significant time and expense we have been required to dedicate to issues arising from the
coal ash impoundment areas.
Aqua does not want the loss of these assets and related expenses to negatively affect our
customers' utility rates, which it may otherwise do if the identified costs are not reimbursed by
Duke. Aqua is also concerned that these plans are being submitted for approval while other
details associated with an alternative water supply, such as the bulk price at which the water
will be sold to Aqua from the City of Belmont and ultimately to our customers, and who is
responsible to pay any connection or capacity fees that may be assessed, have not yet been
disclosed.
Aqua's customers understandably continue to ask questions about how they will be affected
by HB 630. 1 plan to meet with our customers again in the near future to gather their input on
the options considered (interconnection or filtration) once we receive clarity on their details.
Consequently, Aqua formally requests that Duke provide information concerning:
Its intent to compensate Aqua for the assets that will no longer be useful as a
result of the abandonment of these wells.
• Reimbursement to Aqua for the expenses we will incur to abandon these wells
according to DEQ regulations.
We also request, on behalf of our customers, that the plan details also include:
1. Specific action customers are required to take when the plan is implemented;
2. Expenses that Duke will not cover, either for Aqua or individual customers;

3. Duke's obligation to pay for all activities necessary to facilitate the interconnection
to the City or filtration options;
4. Duke's obligation to pay current and future city -related fees (e.g., capacity,
interconnect or others) that may result from interconnecting Aqua's system to the
City of Belmont's water system;
5. The extent of Duke's reimbursement to Aqua for recurring costs necessary to
maintain the filters, if the filtration option is selected;
6. The negotiated purchase price for bulk water from the City of Belmont to serve
Aqua's affected customers; and
7. Specific details of the option package Duke is offering to Aqua's customers served
by the three wells within the compliance boundary:
a. Amount of payment customers will receive?
b. Who will receive payments?
c. What is the timing of any potential payments?
d. Taxability of payments to the recipients?
The concerns of Aqua and our customers must be addressed before determining the final
solution. We respectfully request your responses to the issues noted herein by April 30,
2017.
Sincerely,
Shannon V.Becker
President
Aqua North Carolina, Inc.
cc: Jay Zimmerman, Director of Water Resources
Sheila Holman, Assistant Secretary, NC DEQ
Jessica Godreau, Division of Water Resources, Public Water Supply Section
Debra Watts, Division of Water Resources, Animal Feeding operations & Groundwater
Representative Dana Bumgardner
Senator Kathy Harrington Protection Branch
Jessica Bednarcik, Duke Energy, EHS