Scott County

Water supply commission considers billing Kentucky American

The group that came up with the idea that became a new Kentucky American Water treatment plant and pipeline is considering sending the utility company a bill for its services.

At a meeting Tuesday — its first in nearly two years — the Bluegrass Water Supply Commission asked its attorney to explore the idea and report back.

The commission also signaled that it is going to be around for a while by agreeing to tap a $900,000 state grant administered by the Kentucky River Authority.

When it was an informal group called the Bluegrass Water Supply Consortium, the commission spent about $500,000 exploring many alternatives to increasing the region's water supply.

"There's some notion that some portion of that should be paid back to the Bluegrass Water Supply Commission," said Mayor Ed Burtner of Winchester, one of eight — or perhaps 10 — cities that make up the commission.

The consortium started with a meeting of water-utility managers during the drought of 1999. Kentucky American was part of the consortium. In the early 2000s, the consortium came up with the plan for a treatment plant on the Kentucky River north of Frankfort (where there is more water than in the section of river closer to Lexington) and a pipeline that would carry the water to Lexington. There also was talk of a grid of pipes connecting most of the towns in the region.

The idea at the time was that the utilities would work together on the plant and pipeline and have some kind of joint ownership.

When the water supply commission was formed in 2004, Kentucky American wasn't a member because it is a private company and the rest were municipal utilities (except for Lexington, which is a municipality but doesn't own its water utility).

In 2006, Kentucky American said it was tired of waiting for the commission to act, and it started planning to build the plant and pipeline by itself. For a while, it offered to build a plant that would treat 25 million gallons a day and sell 5 million to commission members if the commission could come up with a share of the $162 million cost.

Construction of a 20-million-gallon-a-day plant and pipeline began in the summer of 2008 without the water supply commission. It is expected to be completed late this summer. The pipeline will bring water to Lexington, but there will be no grid connecting other towns.

Kentucky American spokeswoman Susan Lancho, asked later Tuesday to comment on the commission's action, said only, "We stand ready to work with the BWSC any way we can."

In accepting the $900,000 state grant, the commission noted that it owes more than $330,000 to the finance arms of the Kentucky League of Cities and the Kentucky Association of Counties for loans taken out when it was planning a regional water system.

With money it has in the bank, the commission would have $600,000 to $700,000 after the loans are repaid, said Tom Calkins, who is Nicholasville's utility manager and chairman of the commission.

The money could be spent exploring the old dream of connecting towns with pipes that could be used in times of emergencies, he said.

Don Hassall, the commission's managing director, said only the briefest consideration was given to turning the money back to the state, which is facing a budget crunch.

"I think we can do some good with it," Hassall said.

Tuesday's commission meeting was attended by representatives from Berea, Frankfort, Georgetown, Nicholasville, Paris and Winchester. The Lancaster and Lexington representatives did not attend. No one there was sure whether Cynthiana and Mount Sterling still consider themselves members because their representatives have retired and have not been replaced.