The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1996, Landmark Communications, Inc.

DATE: Wednesday, July 3, 1996               TAG: 9607030730
SECTION: FRONT                   PAGE: A1   EDITION: FINAL 
SOURCE: BY KAREN WEINTRAUB, STAFF WRITER 
                                            LENGTH:  106 lines

DOUBTS PERSIST, BUT BEACH TAKES NORFOLK OFFER TO PAY LESS FOR WATER

Virginia Beach continues to condemn a new Norfolk water supply study, but has accepted Norfolk's offer to sell the disputed water for less.

``We don't accept the conclusions of the report that there's any additional water available in the region,'' Beach City Council member Louis R. Jones said Tuesday, ``but if they want to charge us $700,000 less for the 2 million gallons a day we're (already) purchasing . . . we're willing to pay less.''

The study, commissioned by Norfolk and completed this spring, found that Norfolk has nearly 2 million more gallons available to sell to Virginia Beach. Virginia Beach buys about 32 million gallons a day from Norfolk, paying a penalty of $1.04 for every thousand gallons it uses over 30 million gallons a day.

The two cities had agreed to the 30 million gallon limit in 1993, and Virginia Beach imposed water restrictions on its residents to discourage usage. The cities were concerned that Norfolk wouldn't have enough water in a drought for the region. Norfolk sells water to the Navy and Chesapeake in addition to the Beach and its own residents and businesses.

According to Norfolk officials, the new study gives them room to safely sell 1.86 million gallons more a day, without the need for a penalty. Norfolk had warned Virginia Beach that if it didn't buy the additional water it would be sold elsewhere in the region.

For the fiscal year which ended Sunday, Virginia Beach will save $706,056.

Norfolk City Manager James B. Oliver Jr. said he told his council Tuesday that Virginia Beach had decided to accept Norfolk's offer to reduce the penalty charges.

``We have a contract with Virginia Beach, and we are pleased that they want to buy some water,'' he said Tuesday evening. ``A lot of words fly around, but the truth is Virginia Beach and Norfolk have a very sound 37-year contract . .

Oliver said Norfolk stands behind the conclusions of the study which took five years and about $700,000 to complete.

``It's certainly the basis for how we're determining our ability to sell them the water,'' he said.

Virginia Beach officials dispute the study's conclusions, saying they are misleading and based on faulty data. If Norfolk's report is wrong and the extra water isn't there in a severe drought, Beach officials worry it is their citizens who will be left wanting.

``We believe that the Norfolk system is already overcommitted and that even the 30 mgd now required by the contract will not be available during a drought,'' Beach City Manager James K. Spore wrote Friday to Oliver, adding, ``The sale of additional water to another customer, therefore, would make Virginia Beach's shortage significantly worse.''

Virginia Beach has challenged the study because its findings support North Carolina's argument that the Lake Gaston pipeline - which the Beach has fought for for 13 years - is not needed. In addition to the extra 2 million gallons available now, the study found that Norfolk could have 16 million gallons more per day if it made certain technical changes to its water system.

North Carolina used Norfolk's study last month to support its legal case against the Lake Gaston pipeline. North Carolina, which has led the 12-year fight against the project, filed the study as part of its appeal of the Federal Energy Regulatory Commission's decision last year to issue the final pipeline permit.

Virginia Beach filed a response in U.S. District Court of Appeals on Monday, challenging the use of the study in the legal case.

The study doesn't include any new data, Virginia Beach argued, just new analysis of old information that the federal regulatory commission reviewed during its yearlong examination of the pipeline proposal. The commission spent enough time studying the pipeline and shouldn't be forced to consider new information, according to the filing.

``Enough is enough,'' the petition reads. ``Administrative proceedings must end somewhere.''

Virginia Beach did not try to hide the report, as North Carolina suggested in its filing. The Beach said it learned of the study's conclusions only in late May, two weeks before it was made public.

The study shows that for Norfolk to get substantially more water it would have to take significantly more from the Blackwater and Nottoway Rivers. But tapping those rivers would do far more environmental damage, the Beach charged, than taking water from Lake Gaston, an impoundment on the Roanoke River.

``North Carolina has argued for the past thirteen years that withdrawals of just over one percent of the average flows of the Roanoke River, which will have no impact on the regulated minimum flows in that river, will cause an environmental disaster,'' the filing reads, ``yet it now asks this court to take seriously a new report suggesting that Norfolk may with impunity take all of the flow from two nearby rivers, both of which also flow into North Carolina.''

North Carolina has not commented publicly on the report outside of its legal action.

The 76-mile Lake Gaston pipeline would run from the North Carolina border to the intake for Norfolk's water system in Isle of Wight County.

The pipeline would bring as much as 60 million gallons per day to South Hampton Roads - 48 million to Virginia Beach, 10 million to Chesapeake and 1 million each to Franklin and Isle of Wight County.

Construction of the pipeline resumed in March after a 4-year court-ordered hiatus. About 17 miles of the pipeline have been built. ILLUSTRATION: Graphic

BACKGROUND: After completing a study that showed it had at least

2 million more gallons of water a day to sell to Virginia Beach,

Norfolk offered to stop charging the Beach a penalty of about

$700,000 a year for exceeding daily demand limits. Beach officials

disagreed with the study and said it falsely bolsters North

Carolina's court claim that the Lake Gaston pipeline is unnecessary.

LATEST DEVELOPMENT: Virginia Beach accepted the savings but

continued to condemn the report's conclusion that there is extra

water.

KEYWORDS: WATER SUPPLY PLAN VIRGINIA NORTH

CAROLINA LAKE GASTON by CNB