Kentucky American Water is on target to complete by late September a $162 million treatment plant and pipeline to increase Lexington's water supply, the company said Wednesday.
Still to be decided: How much water bills will increase to pay for the project.
"Once these facilities become operational later this summer, our Central Kentucky customers can be assured that ample water supply is available to meet their needs for at least the next 20 or 30 years, even during drought times, and still for less than a penny a gallon," Kentucky American Water president Nick Rowe said in a news release.
The utility has asked the state Public Service Commission to approve a 37 percent increase for residential customers to pay for the project. Business and industrial customers would see higher increases if the request is granted.
The PSC has scheduled an Aug. 10 hearing on that request in its offices in Frankfort. PSC spokesman Andrew Melnykovych said the agency also plans to hold a public meeting in Lexington during the last week in July, but a time and place have not been set.
The PSC decision is months away, but the agency historically has granted Kentucky American 50 percent to 60 percent of what it requests.
The cost of the project has become an issue in the Lexington mayor's race.
Before the project was approved by the PSC in April 2008, Kentucky American said it probably would lead to an increase in water bills of $8 to $10 a month, or 43 percent.
Mayor Jim Newberry says he supports the project but not the size of the rate hike Kentucky American has requested.
He has started an online petition drive against the rate request on the city's Web site. As of Thursday, it had 4,241 names. (It's at www.lexingtonky.gov; click on "Just Too Much.")
Vice Mayor Jim Gray, who is challenging Newberry in the Nov. 2 general election, says Newberry should have done more to explore alternatives to the Kentucky American project.
Gray was on the losing end of an 8-7 Urban County Council vote to spend $15,000 on a comparison of proposals put forward by Kentucky American and Louisville Water Co.
The Kentucky American project is a plant on the Kentucky River north of Frankfort that can treat 20 million gallons of water a day, plus a 31-mile pipeline to bring the water to Lexington and surrounding areas.
Louisville Water Co. had offered a pipeline to bring treated Ohio River water from its plants in Jefferson County.
In granting approval for the Kentucky American project, the PSC said the Louisville proposal "never evolved beyond a series of concepts."
Opponents of Kentucky American's project sued in Franklin Circuit Court, saying the PSC made a mistake when it gave its blessing.
Last September, Franklin Circuit Judge Phillip Shepherd heard oral arguments in that case but has not issued a ruling.
Tom FitzGerald, an attorney for Citizens for Alternative Water Solutions, the group that sued, said Wednesday that he expected a decision in the case before the PSC rate hearing.
"I'm guardedly optimistic" that Shepherd will rule for the citizens' group, FitzGerald said.
That would mean Kentucky American's shareholders, and not rate payers, would bear the cost of the project, he said.
Many members of the citizens' group lived along the route of the pipeline in Franklin County.
Kentucky American said Wednesday that the pipe, which is 42 inches in diameter, is in the ground and being tested. The company obtained more than 100 easements along the route. Condemnation cases were filed against three property owners, but all the easements eventually were obtained without a court order.
Kentucky American has been using water from its Lexington treatment plants to test pressure in the pipe. Surface restoration is progressing in areas where a trench was dug to bury the pipe, the company said.
A section of pipeline near the Kentucky Horse Park was completed first to give the surface time to recover before the Alltech FEI World Equestrian Games, which begin Sept 25.
The company would not give a date when it expected the treatment plant to be completed, except to say it will be before the Games.
The utility said the project "addresses a key issue that has been analyzed in the region for more than 20 years." In the September hearing challenging the PSC's approval of the project, PSC attorney Gerald Wuetcher noted that the agency had gone to extraordinary lengths to solve a Central Kentucky water supply problem that had been before it off and on for more than two decades.
The region had major droughts with watering restrictions in the late 1980s and 1990s. The most recent drought that caused mandatory restrictions in Lexington was in September and October 2007.