Artesian proposes DBO sewer system in New Castle, DE

By STEVEN CHURCH

Staff reporter

05/01/2003

Delaware's largest water company Wednesday said it stands ready to build a private sewer system in southern New Castle County if county officials scuttle plans for a $100 million publicly owned system.

"What we would do with wastewater would be almost identical with what we have done with the water service," Artesian Water Co. Chief Executive Officer Dian C. Taylor said. Artesian officials have been meeting with large landowners, county council members and state legislators to discuss the possibility, Taylor said.

Artesian has proven it can turn wastewater into a profitable business in Middletown, Taylor said. Artesian's wastewater partnership, known as Aquastructure, has already signed contracts to provide sewer service with landowners who control thousands of acres along the Del. 1 corridor in southern New Castle County, Taylor said. The company also has verbal promises from other landowners in the area to get their sewer services from Aquastructure, Taylor said.

Artesian wants to expand private wastewater treatment services throughout the state, Taylor has said.

New Castle County Council proposed building the regional sewer system in 1997, to protect the environment from failing septic systems and control development. But several years of annexation by towns, especially Middletown, have captured much of the new development in the county. County officials began reconsidering the sewer plan because they feared there were not enough new homes to support the system.

County Chief Administrative Officer Sherry L. Freebery said she was skeptical that Artesian or any other private company could run a sewer system as cheaply or as well as the county.  "They need to make a profit, and they won't be as caring about the environment," Freebery said.

Taylor said private companies have more incentive to keep costs lower than public agencies. She also said that because Artesian is a regulated water company, caring for the environment would a priority. "There is nobody that is going to be more committed to preserving the natural resource of water than we are," Taylor said.

Sewer service would become a for-profit business modeled on Delaware's drinking water system, where private companies compete to provide services to new housing and commercial developments, Taylor said.

The wastewater business would be regulated by the state Public Service Commission, which currently approves water rates and decides which private utilities are allowed to serve which areas of the state.

The plan would require changes to state law and county code. If the county bows out of the wastewater business, Aquastructure could be ready within 18 months to open a sewage treatment plant capable of processing 1.5 million gallons of wastewater a day from about 5,000 homes, Taylor said.

Currently, Middletown pays Aquastructure to operate two treatment plants. Aquastructure is a partnership among Artesian, New Castle contractors George & Lynch and Wilmington design and engineering firm Tatman & Lee Associates.

When Artesian announced profits for the first three months of this year, it said revenues from the company's wastewater operations jumped to $103,000 compared with $16,000 the year before. The net profit on those revenues during the same period rose from $2,000 to $32,000. The company announced a 3-for-2 stock split Wednesday.

Taylor said that under her plan, sewer service would be provided only as developments were built. That idea conflicts with the county's plans and county code, Freebery said.

County officials originally favored a regional plan that would be built as one integrated system. New developments would connect to it as they were completed, Freebery said.

Taylor said Artesian could take over sewer services with only minor adjustments to county rules. Before County Executive Tom Gordon was elected in 1996, county officials had agreed to allow Artesian to provide sewer service below the Chesapeake & Delaware Canal, Taylor and Freebery said.

When Gordon took office in early 1997 he canceled those plans because he realized that the county could provide the service more economically, Freebery said.

Reach Steven Church at 324-2786 or

schurch@delawareonline.com.