Cape Charles Receives Offer to Buy Its Sewer Plant

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By Stefanie Jackson – Cape Charles has received an unsolicited offer from private company Aqua Virginia to purchase the town’s water and sewer plants and relieve Cape Charles of $5.6 million in utility debt.

Aqua Virginia is part of the larger Aqua America, which provides water and sewer service to about three million people in eight states. Aqua Virginia serves around 80,000 of those people in 37 counties.

Aqua Virginia has been present on the Eastern Shore since at least 2015, when it acquired the water and sewer systems at Captains Cove, in Accomack County.

The Cape Charles sewer plant has been in operation for about eight years and was built for approximately $19 million. The Virginia Department of Environmental Quality covered the cost by providing the town two grants totaling about $14 million and a 20-year, 0% interest loan for more than $5 million.

The sewer plant has a capacity of 250,000 gallons and uses about 150,000 gallons daily.

Cape Charles Town Manager John Hozey said that if the town council accepts the offer to buy the plants, it will take about a year to finalize a deal.

He plans to present the offer for the council’s consideration in December. If the council decides to pursue the matter, the town will likely seek the services of a third-party consultant, Hozey said.

Virginia’s State Corporation Commission would have to approve any new rates that Aqua proposes, he noted.

Hozey received Aqua’s proposal in mid-September, about nine months after it sent another unsolicited proposal for wastewater service to Exmore Town Manager Robert Duer.

One key difference between the two proposals is that Aqua would acquire and operate Cape Charles’ existing sewer plant, but it would build and operate a brand-new facility in Exmore to replace the town’s aging, outdated sewer plant.

Exmore would maintain responsibility for its sewage collection system, which currently serves 350 customers. Town officials want to expand the collection system to serve all of Exmore, about 900 customers.

A recent PER (preliminary engineering report) recommended that Exmore build and operate the new sewer plant, but Aqua’s offer is still on the table.

Cape Charles’ sewer plant is relatively new and doesn’t need to be replaced, but it does need improvements mentioned in Aqua’s proposal.

Aqua said it can provide cost-effective solutions to Cape Charles’ water and sewer issues, including a critical need for more water withdrawal capacity and a replacement cycle for the town’s water main. The addition of new wells would benefit sewer treatment operations, the proposal stated.

Aqua also would address the issue of rainwater flowing into the sewer collection system, replace wastewater treatment membranes that filter out contaminants, and decrease backwash water waste to conserve water.

Aqua will reduce Cape Charles’ water and sewer rates over the next 10 years through prudent capital investments and cost-saving measures in operations.

“Aqua will focus on providing the best quality of service to its customers and on supporting the sustainable growth of Cape Charles,” the proposal stated.

Aqua’s proposals to Cape Charles and Exmore were submitted in compliance with the Virginia Public-Private Education Facilities and Infrastructure Act, or PPEA.

Both towns are also considering working with the public Hampton Roads Sanitation District.

HRSD was granted a petition Oct. 2 by Judge Revell Lewis III in the Northampton circuit court to add the county to the district, giving Northampton and its towns the opportunity – but not the obligation – to negotiate agreements for HRSD to own and operate their sewer systems.

(Lewis also granted HRSD a similar petition for Accomack County following a public hearing in its circuit court.)

Hozey released a public notice Friday, Oct. 9, regarding Aqua’s proposal and will accept competing proposals until Monday, Nov. 30, 4:30 p.m.