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Legislation could negatively impact WAWSA's ability to repay state loans

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opinion Dickinson, 58602
Dickinson North Dakota 1815 1st Street West 58602

Leaders from northwestern North Dakota appeared before the House Energy and Natural Resources Committee on Thursday in opposition to pending legislation that could negatively impact the Western Area Water Supply Authority's ability to repay its state loans and cause the burden to shift to state taxpayers. SB 2233 is an important water policy bill that is widely supported by the water community statewide. "For the most part, WAWSA supports the water policy bill. But the bill contains a couple of pointed provisions that go far beyond policy and completely change the financial plan that supports the WAWSA's loans with the state of North Dakota," said WAWSA executive director Jaret Wirtz. He goes on to say, "These sections were placed in a middle of a bill that has nothing to do with policy changes."

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Within SB 2233, there is a provision that would completely eliminate any franchise territorial jurisdictions afforded to the WAWSA and its members under long-standing state and federal laws. The state law in question was instituted in 1999 and federal law has been in effect since 1961. These laws were developed to protect municipal water and wastewater systems and rural water systems indebted to state and federal governments to assure these systems would be able to provide services in exclusive areas and therefore be able to repay their loans. There are similar franchise protection laws for electric and other utilities as well.

To this point, WAWSA has co-existed with more than 70 independent private water sellers within its service area for the past two years. Many of these private water sellers are small "mom and pop" to medium-sized water sellers that have not previously prompted franchise considerations of the WAWSA and member systems. Due to the onslaught of "mega" private water developers within the WAWSA service area and with routes following the same WAWSA routes, franchise protection considerations have been raised.

We are concerned about our very ability to repay our debts if our service area is flooded with unfettered competition for industrial water sales. There are a number of mega water sellers that either have or are working to secure water permits exceeding the city of Williston's water permit, which is used by WAWSA.

WAWSA's business plan, approved overwhelmingly by the 2011 Legislature, was based on a model which created a link between the people's need for water and the industry's need for water. This innovative, public-private partnership relies on industrial water sales to provide a large majority of debt service for the construction of this regional water system that spans into five counties, serves 10 cities and thousands of rural water users. This area of the state has a history of struggling with a quality water supply in adequate volumes.

"We are relying on the high quality, plentiful water supply to continue growing our community which is now forecasted to grow to 15,000 people. We rely on the WAWS Project to grow our community and have a stable water source at an affordable price," said Watford City Mayor Brent Sanford. "We turned on the spigot to WAWSA water last December and our community has been very pleased with the new water supply. Watford City doubled its water rates this year and we can't afford to issue more and more cost increases to our residents."

Typically, systems with franchise protections are able to negotiate with other entities seeking to serve customers within its territories. However, the mega water sellers, through the Independent Water Providers, have opted to attempt to sway legislators into completely eliminating any franchise territorial protections as outlined in SB 2233 which could negatively impact WAWSA's revenue streams and its ability to pay off its loans.

Eliminating franchise protections puts WAWSA at risk. I asked the committee, "Who do you want to pay for this vital water system in northwestern North Dakota? The industry -- which needs water, is currently paying for it, and is driving the increased domestic water demands -- or the taxpayers of North Dakota?"

The WAWSP will transport treated water from the Missouri River to residents in McKenzie, Williams, Divide, Burke and Mountrail counties. By 2035, the public water project is anticipated to serve approximately 100,000 people in all or parts of all five counties due to the massive population growth in northwestern North Dakota. For more information about the WAWSP, check out www.WAWSP.com.

Zubke is the chairman of WAWSA.

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