The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Wednesday, May 3, 1995                 TAG: 9505030115
SECTION: VIRGINIA BEACH BEACON    PAGE: 12   EDITION: FINAL 
TYPE: Cover Story 
SOURCE: BY TOM HOLDEN, STAFF WRITER 
                                             LENGTH: Long  :  501 lines

NO LONGER A PIPE DREAM LAKE GASTON PROJECT NOW SEEMS A CERTAINTY, BUT BEACH RESIDENTS WILL HAVE TO MAINTAIN ONE OF THE NATION'S BEST CONSERVATION HABITS.

THE INK MAY HAVE dried on the Lake Gaston agreement, but the water it promises for Virginia Beach remains a mirage. So before thoughts take hold to wash that pollen-coated Honda, think again.

You can't.

``Nothing has changed in terms of the water restrictions,'' said C.W. Walck, customer service administrator for the Department of Public Utilities. ``That agreement is a milestone all of its own. Our water restrictions are based upon the limitations imposed by Norfolk (which supplies our water). Until we have the water coming in, we still have the restrictions in place.''

With that said, let's review where the city stands in its 18-year effort to restrict water use - even if the $3.65-per-1,000-gallons price tag wasn't incentive enough.

No one knows how much water has been saved by Virginia Beach residents since the city enacted water conservation efforts - some mandatory, some voluntary.

But repeated threats of a cutoff from Norfolk, an occasional drought and an on-going public education program have turned Virginia Beach residents into some of the most water conservative consumers in the nation.

The average single-family home in Virginia Beach uses about 60 gallons of water per person per day, said Bob Montague, an analyst in the Department of Public Utilities' water conservation office. Add in businesses and the rate rises to 80 gallons.

That may sound like a lot, but compared to other water-starved communities Virginia Beach residents deserve a pat on the back.

Phoenix residents, for example, consume 137 gallons per person, per day, while Oakland, Calif., residents use 95 gallons. In Raleigh, the rate is about 124 gallons a day, and in San Diego, which has some of the nation's more progressive water conservation programs, residents average 85 gallons daily.

Worst among major cities is Las Vegas, which sucks up 190 gallons per person per day.

Virginia Beach has fared so well by offering various programs to cinch down the water use - from conservation lessons for students to economic incentives for their parents.

Consider the low-flow, toilet rebate program.

On July 1, 1993, the city began offering a $75 rebate to any homeowner who installs an ultra low-flow toilet. Traditional toilets use anywhere from 3.5 to 6 gallons of water per flush. The ultra, low-flow variety consume just 1.6 gallons.

As of February, the city reported that 16,743 ultra, low-flow toilets had been installed around town.

In May 1993, the city adjusted its building codes to require that new buildings be equipped with low-flow shower heads, which reduce water use from 3 gallons per minute at 80 pounds per square inch to 2.5 gallons per minute, and low-flow sink faucets, which curb use from 3 gallons per minute to 2.2 gallons.

The effect of these programs is measured in the city's consumption rates, which have held steady despite economic growth. The city once was increasing its consumption rate each year by 1 million gallons per day.

With restrictions, that rate has slowed. In 1991 the city averaged 31.8 million gallons a day. The following year, the rate dropped to 30.1 million, rising slightly in 1993 to 30.3 million gallons and to 31.7 million gallons last year.

The increase last year may be attributed to improvements Norfolk made to its pumping abilities, which may have affected consumption.

``We've had a lot of system growth since 1994 but we're basically using what we were in 1991. We're doing well,'' said Montague.

The need to save water goes beyond retrofitting old homes. The latest water-saving technology used in new construction will be demonstrated at this year's Homearama in a specially-designed 3,500-square-foot ranch home being built by the Viola Building Corp.

Albert ``Albie'' Viola, the company's owner, said the new home will use all the existing techniques, while a few lesser known tricks are under consideration.

The home will have ``point of source'' water heaters, which are positioned closer to bathrooms. When hot water is called for, the distance water flows to the spigot is shorter so that less water is used while warming to the owner's preferred temperature.

The system is enhanced with the use of time-sensitive pumps that can be set to begin circulating hot water moments before a person's daily shower, allowing for instant hot water upon demand.

In addition, the home will have ``water wise'' landscaping and pervious concrete for the driveway. This concrete is porous so that water seeps into the ground, lessening the amount of runoff.

The company also may install French wells, which are essentially holes in the ground with gravel added to slow the amount of stormwater runoff.

Ground breaking is scheduled May 10, and the house will be built in time for the October showcase in Lago Mar.

While home builders are among those who've taken up the cause to conserve water, other users are reminded of the ever-present threat for not doing their part: a $500 fine.

``That has not been levied against anyone,'' said Montague, of the public utilities department. ``Normally, when we get reports of people using city water, we'll send out an inspector and remind the citizen that the city still has the mandatory outdoor restrictions in effect and they always comply.'' ILLUSTRATION: ON THE COVER

To create the color cover illustration, staff photographer D. Kevin

Elliott splattered contact-solution droplets on a plate of glass. He

placed the reversed letters ``VB H20'' about two feet below the

glass on the floor and photographed them through the glass and

droplets. The droplets act like a camera lens and invert the image

of the lettering. And each droplet gives a slightly different angle

on the lettering.

Staff file photo by MORT FRYMAN

The Pea Hill Creek pumping station at Lake Gaston was completed in

December 1993 before construction on the pipeline was halted.

Map

Area shown: Lake Gaston Pipeline

[Side Bar]

THE LAKE GASTON SETTLEMENT

The state of North Carolina and the City of Virginia Beach, Va.,

agree to settle the disputes and disagreements between them

regarding the Lake Gaston pipeline project on the terms and

conditions set forth herein:

1. Maximum withdrawals for southeastern Virginia through the

pipeline. The maximum amount of water that can be withdrawn from

the Roanoke River Basin through the Lake Gaston pipeline for

southeastern Virginia is 60 million gallons per day (mgd).

2. Water for northeastern North Carolina. Virginia Beach agrees

that North Carolina will have an option to connect to the Lake

Gaston pipeline at any time for the purpose of transporting up to 15

mgd of raw water through the Lake Gaston pipeline for water supply

to northeastern North Carolina communities (the ``North Carolina

communities'') under the following conditions:

a. Connection. The water would be made available to North

Carolina at reasonably convenient locations agreeable to Virginia

Beach and North Carolina.

b. Cost. No direct or indirect costs of such connection or of

the transport of such water through the Lake Gaston pipeline, or of

the use of such water, would be paid by Virginia Beach. The North

Carolina communities would pay a pro rata share of all operation

and maintenance costs of the Lake Gaston pipeline based on actual

use.

c. Permits. All permits, consents, licenses, approvals, waivers,

contractual agreements or other permissions (collectively,

``permits'') required for the connection, transport or use of such

water would be obtained by the North Carolina communities.

d. Reasonable assistance. Virginia Beach would provide all

reasonable assistance in connection with any application or request

by North Carolina or the North Carolina communities for the permits

necessary for the transport or use of such water.

e. No reduction in Virginia supply. Any water from the Lake

Gaston pipeline which is made available to North Carolina will be

in addition to the 60 mgd permitted for use by Virginia Beach and

other southeastern Virginia communities; and water would be made

available to North Carolina only to the extent it obtains such

permits as are necessary to transport additional water through the

Lake Gaston pipeline.

f. Limitations on delivery. At any time that Virginia Beach's

ability to make actual withdrawals from Lake Gaston for use by

Virginia Beach and other southeastern Virginia communities is

restricted or limited in any way as a result of this settlement or

for any other reason, withdrawals for the North Carolina communities

would be restricted or limited by the same percentage and in the

same way.

g. Impossibility or interruption of performance. Virginia Beach

would not be obligated to make such water available to the North

Carolina communities if Virginia Beach were prevented from making

such water available by law, regulation, order of a court,

contractual agreements (existing as of March 30, 1995, and

disclosed to North Carolina prior to April 5, 1995), necessary

maintenance, act of God or any other physical or legal factor making

performance impossible. Virginia Beach would have no liability to

North Carolina, the North Carolina communities or any of their

customers on account of an interruption in water supply for any

reason beyond the reasonable control of Virginia Beach.

3. No sales outside region. The purpose of the Lake Gaston

pipeline is to supplement the existing water supplies of

southeastern Virginia, which Virginia Beach represents are

insufficient to meet the needs of the region. Accordingly, Virginia

Beach, Chesapeake and any other community receiving water from the

Lake Gaston pipeline will not resell water taken through the

pipeline or any other water to any entity outside southeastern

Virginia (i.e., Virginia Beach, Chesapeake, Norfolk, Portsmouth,

Suffolk, Isle of Wight, Southampton County and Franklin) or

northeastern North Carolina, except in response to bona fide

emergencies in communities along the pipeline route. For these

purposes, and throughout this settlement, a community receiving

water shall mean a community that receives and uses water supply

from the pipeline and does not mean a community such as Norfolk that

may wheel or treat Lake Gaston water through its system, but does

not use such water for its own water supply.

Further, Virginia Beach will attempt to obtain the agreement of

Norfolk not to abandon any component of its water system, because

of the availability of water from the Lake Gaston Pipeline and not

to sell water to any entity outside of southeastern Virginia (as

defined above) or northeastern North Carolina so long as the

Norfolk water system is being used to treat or transport water from

Lake Gaston. During that period, and in the event Norfolk agrees to

the foregoing, North Carolina will not seek the abandonment of

Norfolk's withdrawals from the Blackwater and Nottoway Rivers, or

from ground water, or the reduction of Norfolk's withdrawals from

the Blackwater and Nottoway Rivers below 24 mgd from each river or

the reduction of ground water withdrawals below currently permitted

levels.

Nothing in this paragraph 3 is intended to exempt or except any

entity from any law or regulation which applies to it.

This settlement shall not become effective until Virginia Beach

obtains the described agreement from Norfolk, and Virginia Beach,

Norfolk and North Carolina execute a written agreement

incorporating such terms.

4. Limitations on withdrawals.

a. Virginia Beach and North Carolina agree that, within two

years of the date of this agreement, and in consultation with the

Wilmington, N.C., District Corps of Engineers, they will develop a

Drought Index which will take into account meteorological and

hydrological data, including but not limited to, stream flow,

rainfall and reservoir levels in Kerr Reservoir. The Drought Index

would provide objective determinations of drought conditions in the

Roanoke River Basin and would be used to establish a regime which

would result in terminations of withdrawals, if requested by North

Carolina, for periods of three to nine months during future

droughts of equal or greater severity than the four most severe

droughts in the period of record (1912-1994), but not more

frequently. If Virginia Beach and North Carolina are unable to agree

upon a suitable Drought Index, they will request the Wilmington,

N.C., District Corps of Engineers to make a binding determination

(final offer arbitration) of the drought Index in accordance with

the goals and objectives of this paragraph 4. Virginia Beach and

North Carolina agree that any such Drought Index will be, in part,

a function of the current operating practices and downstream

release requirements of the Kerr/Gaston/Roanoke Rapids reservoir

systems. Therefore, Virginia Beach and North Carolina agree that,

if significant changes in the operation or downstream release

requirements of the Kerr/Gaston/Roanoke Rapids system occur which

would significantly alter the Drought Index, then Virginia Beach

and North Carolina will, in consultation with the Wilmington, N.C.,

District Corps of Engineers, revise the Drought Index to account

for these changes. In addition, North Carolina and Virginia Beach

shall each have the right to reopen the Drought Index for

reconsideration (i) on or after the 10th anniversary of the

implementation of the initial Drought Index, the implementation of

any revised Drought Index, or a reopener which does not result in a

revised Drought Index; or (ii) if the operation of the Drought Index

causes withdrawal restrictions three or more times in any 10-year

period. The purpose of any reopener of the Drought Index shall be to

assure that the Drought Index accomplishes the same objectives set

forth in the first two sentences of this paragraph 4a. If either

party reopens the Drought Index and the parties are unable to agree

on a revised Drought Index, the matter shall be submitted to the

Wilmington, N.C., District Corps of Engineers for resolutions in

accordance with the standards and procedures set forth in this

paragraph 4a.

b. During periods when a flow regime adopted by FERC and/or by

the Corps of Engineers, VEPCO and the North Carolina Wildlife

Resources Commission for striped bass spawning flow augmentations

is in effect, Virginia Beach will use its storage in Kerr

Reservoir, so long as it is available, for striped bass spawning

flow augmentation on the basis of gallon-for-gallon replacement of

the water withdrawn through the pipeline for southeastern Virginia

when river flows are below the applicable limit of the flow regime.

c. Notwithstanding the foregoing, Virginia Beach shall in no

event be subject to greater withdrawal restrictions than those

imposed and enforced by North Carolina on new or additional

out-of-basin transfers from the Roanoke River Basin to locations

within North Carolina. For these purposes, if Virginia Beach's

withdrawals are occurring under paragraph 5, new or additional

out-of-basin transfers to locations within North Carolina may only

occur if the North Carolina transferees are subject to the same

requirements imposed on Virginia Beach under paragraph 5.

5. Removal of limitations in times of inadequate water supplies

in southeastern Virginia. If the operation of paragraph 4 would

result in termination of permitted withdrawals through the Lake

Gaston pipeline, Virginia Beach may nonetheless continue to make

withdrawals through the pipeline in amounts sufficient to satisfy

the demands of the communities receiving water from the Lake Gaston

pipeline that (i) are using all existing water supply systems

within their jurisdiction to the maximum extent practicable; (ii)

are using all alternative sources of water, within or without their

jurisdiction, that can be obtained by them at a total cost

(including permitting, construction, treatment and delivery) not

greater than 20 percent more than the price charged by Norfolk to

wheel and treat Gaston water; (iii) are using emergency and

conjunctive use wells within or without their jurisdiction to the

extent that such use (a) is consistent with good utility system

practices and applicable state and local permits and approvals, and

(b) is not economically impractical; and (iv) have instituted

conservation measures to reduce water demands. For purposes of this

paragraph, ``conservation measures'' shall be defined as: requests

that citizens voluntarily conserve water; restrictions on watering

lawns and other vegetation, washing vehicles, sidewalks, streets and

other exterior areas; restrictions on operating ornamental

fountains, refilling swimming pools and non-governmental use of

fire hydrants; prohibition on serving water in restaurants except

on request; all in the manner described in the ordinance adopted by

the Virginia Beach City Council on Feb. 11, 1992. Notwithstanding

the foregoing, the failure of any community to meet the

requirements of this paragraph shall not prevent other communities

that meet the requirements of this paragraph from receiving the

full benefit of this paragraph.

6. Ongoing conservation. Virginia Beach and Chesapeake agree to

maintain an active and ongoing conservation program, including

education, leak detection, water system repairs, conservation

pricing, retrofit to low flow fixtures, and like measures; to

periodically review new technologies which become commercially

available; and, consistent with and subject to good water utility

system practices, not to waste or imprudently use water.

7. Regional water authority. Virginia Beach, Chesapeake and the

other jurisdictions receiving water from the Lake Gaston pipeline

agree to encourage regional conservation programs and to propose

and actively promote the creation of a regional water authority for

the southeastern Virginia region. North Carolina agrees that

Virginia Beach may assign its rights and its obligations under this

settlement and its Lake Gaston permits to a regional water

authority, with the understanding that the authority would be bound

by all the terms of this settlement.

8. Highway improvements. Virginia Beach and Chesapeake will use

their best efforts to expedite federal and state funding of

improvements to Route 17 and Route 168 on the Virginia side of the

North Carolina border to the same standard or higher as they exist

on the North Carolina side of the border. This settlement shall not

become effective unless North Carolina receives reasonable

assurances from Virginia's U.S. Senators and appropriate Virginia

state officials satisfactory to North Carolina that Route 17 and 168

will be expeditiously improved.

9. Local resources. Consistent with Virginia Beach's

representation that the purpose of the Lake Gaston pipeline is to

supplement existing water supplies of southeastern Virginia,

Virginia Beach and Chesapeake and all of the communities receiving

water from the Lake Gaston pipeline agree not to abandon, seek the

abandonment, or interfere with the development of any water supplies

which could be used with or in lieu of Lake Gaston, except for

legitimate and unforeseen reasons that would make such a supply

impossible or impractical even if Lake Gaston water were not

available.

10. Bi-State Water Advisory Commission. The State of North

Carolina and the City of Virginia Beach agree that a Bi-State Water

Advisory Commission should be established. The mission of the

Commission would be to study and monitor the use, conservation and

coordination of water resources in southeastern Virginia,

northeastern North Carolina and the Roanoke River Basin, so as to

minimize the impact on the Roanoke River Basin, consistent with the

agreements contained herein, and to make non-binding recommendations

to appropriate governmental bodies concerning the best use of these

resources. The water advisory commission would be comprised of not

more than 16 members, the Virginia representatives to consist of a

representative from each of the governments of Virginia Beach,

Norfolk, Chesapeake, Portsmouth and Suffolk, and from the Virginia

Department of Environmental Quality, the Virginia Department of

Health, and the Hampton Roads Planning District Commission, all to

be appointed by Virginia's governor, and North Carolina's

representatives to consist of two persons from northeastern North

Carolina and six other persons, all to be appointed by its governor,

and the commission will contain an equal number of representatives

from each state. Virginia Beach and Chesapeake also agree that the

southeastern Virginia jurisdictions using water from the Lake Gaston

pipeline shall pay, as part of the cost of the Lake Gaston project,

a total of $100,000 per year until the pipeline is fully operational

and, thereafter, $200,000 per year to the Bi-State Water Advisory

Commission to be used by the commission for hydrilla control or

other purposes to benefit the environment of the Roanoke Rive Basin,

provided, however, that the $200,000 payment required of the

southeastern Virginia jurisdictions shall be pro rated to reflect

reduced withdrawals caused by operation of paragraphs 4 or 5 above

during the period such withdrawal restrictions are in effect. This

settlement shall not become effective unless North Carolina receives

a written commitment from the governor of Virginia to create and

appoint the commission.

11. Other uses of Lake Gaston.

a. Virginia Beach agrees not to seek any special regulations,

legislation or stricter discharge standard for Pea Hill Creek than

would apply to other similar waters of the Commonwealth of

Virginia.

b. Virginia Beach agrees not to interfere with recreational uses

of Lake Gaston such as swimming, boating, snorkeling, fishing, or

other recreational activities on Lake Gaston or to petition any

other agency to seek such restrictions.

c. Virginia Beach and North Carolina acknowledge that Virginia

Beach has previously agreed with Brunswick County, Va., that

Virginia Beach will not unreasonably oppose any discharge permits

into Lake Gaston.

12. No opposition by North Carolina. Within 10 days after this

settlement becomes effective, North Carolina shall withdraw its

opposition to VEPCO's FERC application (provided it is modified in

accordance with this settlement). Within 10 days after a FERC order

approving VEPCO's modified application becomes final, North Carolina

shall withdraw all opposition to the Lake Gaston project, including

its appeal of the Secretary of Commerce's CZMA decision, and its

request and support for Judge Britt's injunction in the Eastern

District of North Carolina, and Virginia Beach and North Carolina

shall jointly file a motion to the Fourth Circuit to vacate as moot

Judge Britt's order denying motion to modify injunction and to

dismiss Virginia Beach's appeal. North Carolina further agrees that

it will not in the future oppose, seek or take any action to

restrict, directly or indirectly, Virginia Beach's withdrawals from

Lake Gaston permitted by this settlement. This settlement shall not

become effective unless Virginia Beach receives a commitment from

VEPCO to modify its FERC application in accordance wit this

settlement.

13. Reservation of right by Virginia Beach to commence a

condemnation proceeding. Virginia Beach reserves the right to

commence a condemnation proceeding of VEPCO property.

Notwithstanding paragraph 12, in the event Virginia Beach commences

a con-dem-na-tion proceeding of VEPCO property, North Carolina

reserves the right to oppose Virginia Beach's action or support the

opposition of others to such action. The parties shall be bound by

the provisions of this settlement notwithstanding any judgment in

such a condemnation proceeding.

14. Federal agency obligations. North Carolina and Virginia

Beach recognize that various federal agencies, including NOAA, FWS,

NMFS and EPA, remain obligated to carry out their respective

statutory and regulatory responsibilities. The Departments of

Justice and Commerce have expressed support for the efforts of North

Carolina and Virginia Beach to resolve their dispute over the Lake

Gaston project, and are seeking to facilitate, to the maximum extent

practicable, resolution of the dispute.

15. Agreement by Chesapeake and the Corps. This settlement shall

not become effective unless: 1) it is agreed to by ordinance of the

City Council of the City of Chesapeake; and 2) paragraphs 4 and 18

are agreed to, in writing, by the U.S. Army Corps of Engineers.

16. Options to terminate settlement. All obligations of North

Carolina and Virginia Beach required hereunder, and all obligations

and commitments obtained hereunder from other persons or parties,

shall expire and be of no force and effect if FERC approves VEPCO's

application on a basis materially different from the terms of this

settlement and North Carolina concludes and declares in writing to

Virginia Beach that the differences are adverse to its interests.

All obligations of Virginia Beach and North Carolina required

hereunder, and all obligations and commitments obtained hereunder

from other persons or parties, shall expire and be of no force and

effect if FERC denies or approves VEPCO's application on a basis

materially different from the terms of this settlement and Virginia

Beach concludes and declares in writing to North Carolina that the

differences are adverse to its interests and does not accept the

final FERC approval. If FERC's approval of VEPCO's application is

materially different from this settlement and Virginia Beach does

not terminate the settlement but seeks rehearing or judicial review

of FERC's approval, North Carolina agrees to support actively

Virginia Beach's efforts to secure modifications to FERC's approval

so that it is consistent in all respects with this settlement.

17. Interstate Compact. Virginia Beach, Chesapeake and North

Carolina agree to use their best efforts to cause the enactment of

an interstate compact between North Carolina and Virginia which

would provide that no new or increased out-of-basin transfers of

water in addition to those described in paragraphs 1 and 2 could be

made from the Roanoke River Basin at any point above the Roanoke

Rapids Dam without the consent of each state, except that up to 20

mgd of such additional out-of-basin transfers could be made from

locations in North Carolina to locations in North Carolina without

the consent of Virginia. For the purposes of this compact, transfers

from the Roanoke River Basin to a locality that straddles the

Roanoke River Basin and another river basin will not be considered

out-of-basin transfers so long as the water transferred is used

within the locality and substantially returned to the Roanoke River

Basin. This settlement shall not become effective unless and until

(i) the Virginia General Assembly and the North Carolina General

Assembly have enacted and the governor of Virginia has signed into

law legislation enabling such interstate compact, and (ii) the U.S.

senators from Virginia and North Carolina have agreed to support

the interstate compact.

18. Dispute resolution. North Carolina and Virginia Beach will

request that the U.S. District Court of the District of Columbia

enter a consent order in North Carolina v. Brown ordering

compliance with this settlement, and retaining jurisdiction over

North Carolina and Virginia Beach for purposes of this settlement.

In the event that a dispute arises between North Carolina and

Virginia Beach over the interpretation of, or performance under,

paragraphs 1, 3, 4 or 5 hereof, such disputes shall be submitted to

the Wilmington, N.C. District Engineer of the U.S. Army Corps of

Engineers for an expedited non-judicial preliminary resolution (the

``preliminary resolution''). The parties will accept and abide by

the preliminary resolution until it is superseded by a preliminary

injunction or permanent resolution of the dispute by a court, which

dispute shall be considered de novo and not as an appeal of the

preliminary resolution. The Corps of Engineers shall not be sued in

or otherwise made a party to such litigation. The preliminary

resolution may be enforced by a preliminary injunction. The parties

agree that this settlement is made in the District of Columbia and

that any judicial action to resolve any dispute arising under this

settlement may be brought only in the U.S. District Court for the

District of Columbia.

19. Cooperation to effectuate settlement. North Carolina and

Virginia Beach agree to cooperate and to execute and file all

documents and pleadings and take such other actions as necessary to

effectuate the terms of this settlement, with the objective that the

FERC process and construction and operation of Lake Gaston pipeline

project proceed as expeditiously as possible.

20. Effective date. This settlement shall become effective on

the date that the last agreement and/or commitment required under

paragraphs 3, 8, 10, 12, 15 and 17 is obtained, but it shall not

become effective unless such agreements and commitments are obtained

within 60 days after execution of this settlement; provided,

however, that each party shall attempt to obtain, and cooperate with

the other in obtaining, such agreements and commitments prior to

such date. Upon receipt by Virginia Beach of each such agreement or

commitment, it shall be submitted to North Carolina and North

Carolina shall promptly indicate to Virginia Beach whether it agrees

that such agreement or commitment satisfies the terms of this

settlement.

KEYWORDS: LAKE GASTON CONTRACT AGREEMENT SETTLEMENT VIRGINIA BEACH

NORTH CAROLINA WATER by CNB