DATE: Sunday, May 11, 1997                  TAG: 9705120217

SECTION: FRONT                   PAGE: A1   EDITION: FINAL 

SOURCE: BY TONI GUAGENTI, STAFF WRITER 

DATELINE: VIRGINIA BEACH                    LENGTH:  137 lines

PIPELINE FIGHT'S NOT OVER TIL IT'S OVER\ IN VICTORY'S WAKE, BEACH AWAITS N.C.'S NEXT SHOT

In the 14-year battle to pipe water from Lake Gaston to the city, the elation felt after each legal win is often short-lived.

Following each victory - and there have been many - there emerges a million-dollar question: What roadblock will North Carolina throw up next to sabotage the project?

A federal court's ruling Friday in Virginia Beach's favor is proving no different. Just because the water might be flowing to Hampton Roads homes by December doesn't mean the battle with North Carolina has subsided.

Virginia Beach officials aren't turning their backs yet to their neighbor to the south.

``Unless they give up the fight, unless they decide to stop trying to harass us . . . it could go on for years,'' said City Manager James K. Spore. ``They're very creative and I'm sure they can come up with additional ways to challenge the project.''

While the prolonged fight has been a nuisance for taxpayers, it has been costly as well.

To date, the city has spent more than $8.6 million in legal fees battling North Carolina over the right to take water from Lake Gaston, which straddles the Virginia/North Carolina border about 125 miles west of the Beach. The water will be used by the Beach, Isle of Wight County, Chesapeake and Franklin.

A three-judge panel of the U.S. Court of Appeals in a 2-1 ruling Friday upheld permits for the pipeline, stating that North Carolina did not have the right to block the project under the Clean Water Act.

U.S. Sen. Charles S. Robb, a Virginia Democrat, said he's savoring Friday's victory, but he's not assuming this is the end.

Lake Gaston supporters ``have gone through periods of exuberance before, only to find out those on the other side were crafting a new obstacle for us to deal with,'' said Robb. ``There was a couple times along the way that I thought we saw the final legal hurdle that anyone could throw up. At this point, I've gotten out of the business of predicting.''

As of Friday, North Carolina's appeal to the full 11-member U.S. Court of Appeals appeared imminent.

No matter the outcome of such an appeal, Hampton Roads residents can expect the controversy to drag on for at least another four years. North Carolina already has its sights set on 2001.

That's when Virginia Power's 50-year license to operate its hydroelectric dam, which created Lake Gaston, must be renewed by the Federal Energy Regulatory Commission. FERC could renew the license for 30 to 50 years. The lone federal judge who dissented in Friday's ruling noted the date.

North Carolina has called that relicensing process its ``trump card.''

North Carolina will not give Virginia Power its approval to operate the power plant on the lake if Virginia Beach's plans to use Gaston remain as they are, said Alan S. Hirsch, North Carolina special deputy attorney general, in March.

``Every part of the hydropower license, including the pipeline, will be reconsidered from scratch,'' Hirsch has said. ``In other words, whether or not the pipeline is allowed to operate, and if so, under what restrictions, will be decided as part of relicensing.''

The relicensing process started in 1993 with the identification of basic issues.

In March and April of this year, FERC began taking suggestions from officials and the public about what it should study when considering the dam's new license.

The study must be completed and an application submitted to FERC no later than Jan. 31, 1999, to allow for a new license by 2001.

M. Scott Hart, Virginia Beach's outside counsel, downplayed the ``trump card'' on Friday.

When disputing the relicensing of the power company, North Carolina would have to hurt Virginia Power to hurt Virginia Beach, which is a small part of the company's hydroelectric system, Hart pointed out.

North Carolina wouldn't do that because its citizens are Virginia Power customers, he said.

``They can't single us out,'' Hart said. ``They know Virginia Beach is not going to hurt anything. North Carolina knows that, everybody knows that; there is no environmental problem with this project.''

Hart said the only way North Carolina could protest the new license would be to say that Virginia Power is not letting enough water flow over the dam, called Roanoke Rapids. This means that the company couldn't release water to make electricity when it would need to.

``The only way it can relate to the environment is flow,'' he said. ``We're not the people affecting flow.'' ILLUSTRATION: Graphics

PAST SUITS

So far, Virginia Beach has prevailed in nine key Gaston suits.

Here are a few:

Corps of Engineers permit

Property acquisition

Permits for pipeline (latest win).

TIMELINE

LAKE GASTON PIPELINE

1975: Southeastern Water Authority of Virginia recommends Lake

Gaston as long-term solution to area's water needs.

Nov. 1982/Jan. 1983: Virginia Beach City Council decides to

proceed with Lake Gaston project.

Jan. 1984: North Carolina files first lawsuit to block pipeline,

shortly after U.S. Army Corps of Engineers issues a construction

permit for the pipeline. This lawsuit is the first of more than a

dozen to be filed over the Lake Gaston dispute.

Nov. 1988: Virginia Beach voters approve a $200 million bond

referendum to pay for the pipeline.

May 1992: Virginia Beach begins construction of several bridges

and underground pump station near Lake Gaston. A federal judge in

North Carolina has already blocked further construction of the

76-mile pipeline.

Dec. 1994: Virginia Beach and North Carolina officials agree to

enter into mediation to try to settle the entire Lake Gaston

dispute.

April 1995: North Carolina and Virginia Beach officials reach a

settlement pending approval of state and federal leaders. Beach

City Council gives Norfolk the go-ahead to expand its water

treatment plant to handle the extra water from Lake Gaston.

June 1995: The settlement agreement falls apart when Virginia

Gov. George F. Allen, fighting with the Virginia General Assembly,

declines to call a special session to ratify the compact.

Aug. 1995: Federal Energy Regulatory Commission issues the final

permit for the pipeline.

Early 1996: Pipeline construction resumes.

Fall/Winter 1996: U.S. Circuit Court considers North Carolina's

appeal of the energy commision's permit.

May 1997: A three-judge panel of the U.S. Court of Appeals issues

a split ruling upholding all permits for the pipeline. Two of the

judges, in a 30-page ruling, dismiss every argument brought by North

Carolina and other pipeline opponents.

Spring 1998: The Lake Gaston pipeline spigot scheduled for

official opening.

1999: Virginia Power will have to seek permission from North

Carolina to continue to operate its 50-year-old hydroelectric power

plant on Lake Gaston. North Carolina is expected to try to use the

permit process to kill or limit the pipeline.

SOURCE: Staff research - VP KEYWORDS: LAKE GASTON WATER SUPPLY PLAN

PIPELINE CHRONOLOGY

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