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

DATE: Thursday, July 6, 1995                 TAG: 9507060399
SECTION: LOCAL                    PAGE: B2   EDITION: FINAL 
SOURCE: BY KAREN WEINTRAUB, STAFF WRITER 
                                             LENGTH: Medium:   84 lines

GASTON: MAYBE THIRD TIME'S THE CHARM THREE-WAY TALKS MAY PRODUCE AN ACCORD BY END OF TODAY, AHEAD OF A FEDERAL STUDY.

Negotiators in Raleigh, Richmond and Virginia Beach have been scrambling all week to work out a third - and they hope final - version of a Lake Gaston accord.

The governors' offices in both states and Beach city leaders are trying to reach a compromise by the end of the day today, the day before the final federal study on the 76-mile pipeline project is due to be released.

Both states want to declare a deal before the study, conducted by the Federal Energy Regulatory Commission, is issued, because they don't want the contents of the report to color their negotiations.

The year-long study is a key element in the commission's decision, expected July 26, on whether to allow Virginia Beach to build the pipeline and what conditions, if any, will be attached to the project.

North Carolina officials want to reach a settlement before the report is released, because they are afraid the conclusions will be the same as those of a draft study made public early this year.

The draft impact statement suggested that there would be no adverse environmental impact to withdrawing up to 200 million gallons of water per day from Lake Gaston. Virginia Beach, Chesapeake and other South Hampton Roads communities hope to draw up to 60 million gallons per day.

Virginia Beach officials want to reach a settlement before the study is released because they don't want to risk a different conclusion.

A settlement would be preferable to a victory, several Beach officials said, because, without concessions from Virginia, North Carolina would almost definitely resume the decade-long legal battle it interrupted to try to make peace.

By battling in the courts and before a number of federal agencies, North Carolina has repeatedly blocked Virginia Beach's efforts to take water from Lake Gaston. The lake is a Virginia Power hydroelectric plant reservoir which straddles the Virginia-North Carolina border about 125 miles southwest of Virginia Beach.

Last week, a standoff between Virginia Gov. George F. Allen, a Republican, and top officials in the Democratic-led state legislature doomed an earlier attempt at settlement. That proposed pact required ratification by the General Assembly in special session, but Allen refused to call the session requested by Virginia Beach after the Democratic leaders balked at his demand to limit its length.

Although parliamentary wrangling prevented that pact from being considered by Virginia legislators, most of its provisions do not require the approval of the General Assembly. North Carolina had sought such approval as a guarantee that Hampton Roads cities would never try to tap the lake again, but now may be considering other types of promises.

Virginia Beach, for instance, could agree, without the General Assembly's permission, to negotiated provisions that would maintain water conservation efforts; limit water use during severe droughts; contribute money for economic development around Lake Gaston; and limit Gaston water use to South Hampton Roads.

Both sides have said they are considering a proposed agreement that includes those provisions, but both emphasize that it is not a done deal.

The Virginia Beach City Council is scheduled to meet in closed session today at 8 a.m. to receive an update on the negotiations.

``We don't have a final agreement at this point,'' City Manager James K. Spore said Wednesday. ``We're hopeful we will. . . . Obviously we're working very hard on it.''

North Carolina negotiators worked all day and most of the evening Wednesday to brief officials across the state and to try to agree on what to do next. Beach officials hoped to hear from Carolina before their morning meeting.

Virginia lawmakers were optimistic Wednesday that a deal could be worked out. Several said Gov. Allen hoped to call a news conference late today to announce a deal and issue an executive order to promise North Carolina that Virginia would deliver on its share of the compromise.

Allen's press office said late Wednesday that it would be too early to predict whether any announcement could be made.

``We do not have one planned as of right now,'' Ken Stroupe, Allen's press secretary, said. ``I think that any type of discussion like that is premature - not only would it be misleading and generate a lot of false hope, but we just simply are not at a comfort level with the negotiations where we could make any sort of an announcement.''

KEYWORDS: WATER SUPPLY PLAN LAKE GASTON by CNB