By Glenn Rolfe

DAGSBORO — Language and verbiage were scrutinized. Questions and concerns were addressed.

Subject to several conditions, at its Tuesday meeting, Dagsboro’s Town Council approved the long-awaited second interconnection agreement with Artesian Water Co., which is slated to begin supplying Dagsboro with water from Artesian’s Greater Dagsboro Water Treatment Plant by Sept. 1 or possibly sooner.

Council’s vote was 5-0 in approving the motion made by Councilman William Chandler III, who, with his background as a longtime judge in the Court of Chancery, reviewed in fine detail the proposed agreement and submitted a series of questions seeking clarification.

“Mr. Chandler, you are completely very thorough,” said John Thaeder, senior vice president for Artesian. “It has been, at times, kind of a winding road, but I think, at the end of the day, it’s better agreement for it.”

At Councilman Chandler’s insistence, Town Council had deferred action on this issue at its January meeting, pending legal review and language modification.

The town, locked in a 20-year agreement with Millsboro that is to provide Dagsboro water through December 2022, plans to tap into Artesian’s new regional system sometime this year. It will be receiving water from both sources through next year.

The Dagsboro plant, one of Artesian’s three plants in the region, is projected to be operational this spring, providing an additional supply of 2 million gallons per day to the region. It will serve the towns of Dagsboro and Frankford, as well as other parts of southeastern Sussex County, according to Mr. Thaeder.

Two interconnections are in play. One is between Millsboro and Dagsboro. The second is with Dagsboro and Frankford.

The town of Millsboro has requested that Dagsboro not tap into the Artesian network until Millsboro’s new 1 million-gallon water tower — the town’s third tower, currently under construction off Del. 20 — is operational. Millsboro’s request stemmed from a Jan. 12 meeting of representatives from Millsboro, Dagsboro and Artesian.

“Just to be clear, the (Dagsboro) plant will be operating before Sept. 1 (or when the Millsboro tower is online), but it will not be providing water to Dagsboro until after that date because it has a separate line that will tie it in, moving down Route 20,” said Mr. Thaeder.

Councilman Chandler’s concerns focused on several aspects of the agreement, including the indemnification clause and the “force majeure” clause.

“I’d feel more comfortable if it was spelled out, rather than just referring to some generic terms,” said Councilman Chandler.

“Consider it done,” Mr. Thaeder said.

Another question that sought clarification was regarding the rate Artesian is proposing in the first agreement, which is $3.50 per 1,000 gallons.

Council wanted to know if that is Artesian’s tariff rate or if it is a special contract rate. Furthermore, what is Artesian’s tariff rate for bulk sales, and if it is special contract and not tariff, has it been approved by the Public Service Commission?

Mr. Thaeder explained that the $3.50 per 1,000 gallons is based on two things.

“It’s a rate that has been approved on our interconnection that we have with Selbyville, which is very similar to yours. It’s a two-way rate, and it was approved by the Public Service Commission (for Selbyville). It was also a rate that was satisfactory to the town for their own financial reasons,” he said.

“Yes, it was based on the tariff rate, and it was also a negotiated rate. Now, we don’t normally go and get a rate; this rate here (is) approved at the Public Service Commission until we actually build the interconnection and there is actually a billing that is going to be done imminently. The answer is the Public Service Commission hasn’t approved it (for Dagsboro) at this point, but it has got all of the necessary parts to it that it will be approved because it’s a standard rate we are using based on this system and the cost of service based on the negotiations between the parties. It is one that is based off a rate that we’ve already gotten approved on this system.”

Mr. Thaeder added that Artesian cannot change the $3.50 without going through a rate proceeding. “It would be very unusual that we would saddle any particular single group of customers with a one-time fee of having to deal with a contamination. That would be spread across our entire customer base and not necessarily the residents of Dagsboro specially. It wouldn’t happen,” he said.

Also questioned was Artesian’s ability to provide ample water supply to the town in the event of a catastrophe, such as well failure, contamination or major disruption in treatment or production.

“We are not designing this facility at Dagsboro to be on an island,” said Mr. Thaeder. “It is going to be connected — and will be by the time that this interconnection is turned on — it will be connected to two other plants that serve South Bethany, Fenwick Island, parts of Selbyville. We never build a facility with just one well. This plant is also backed up by two other plants.

“It will take a very unusual incident that we would have to turn to you and say, ‘Hey, we need to restrict the amount of water coming to Dagsboro,’ because this is an interconnect system,” he continued. “Your requirements — whether it’s 50,000 gallons a day or 100,000 gallons a day — were well-built into the amount of water that we’re going to be providing out at this plant, and the other two plants also can do up to 2 million gallons a day.”

With that, Councilman Chandler proposed the motion that council approve “the second interconnection agreement as revised and submitted on the condition that the items regarding the indemnification clause and the force majeure clause provision will be followed up with me in a satisfactory form.”

Council members Theresa Ulrich, Patrick Miller, Norwood Truitt and Mayor Brian Baull backed the motion.

Mr. Thaeder reminded council of Artesian’s stance on the importance of the interconnection with Millsboro.

“I don’t ever want to have you think that I think that emergency connection with Millsboro should go away,” he said. “I don’t care whether it’s a manual-operated emergency interconnection or an automatic, it should stay in place. For the reason I said many times to this whole group, interconnections are important for supporting systems.”