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Clay Rural Water System denies Hyperion’s request for service
News Articles | Sioux City Journal | Michele Linck & Molly Montag | January 28, 2010
Read the full article on the originating site
WACONDA, S.D. - The Clay Rural Water System Board voted 9-0 Thursday night to refuse Hyperion Energy Center's request to sign a long-term agreement to supply the company's planned oil refinery with 9 million to 12 million gallons of water per day.
No one from Hyperion was present at the board meeting.
Water system manager Greg Merrigan said after the meeting that board members believed the deal breaker was Hyperion’s requirement that Clay Rural Water pay to build the infrastructure needed to produce such an increased quantity of water.
“Hyperion requested that we build the infrastructure, and fund it, and then they would repay us through a long-term agreement,” Merrigan said. “Our board of directors felt that would put too great of a risk on our membership.”
Currently, Clay Rural Water system has the capacity to provide 1.2 million gallons of water to its customers each day.
“(Denying the request) was strictly a business decision on the part of the board of directors,” Merrigan said.
In its denial of service, the water system board adopted specific language requested and provided by Hyperion for the meeting minutes of Thursday’s meeting. It includes language freeing Hyperion to seek water from other sources.
The board also adopted the company’s requested “Form of Intent Not to Serve.” That form is intended to protect Hyperion from any future allegations that it and its eventual water supplier violated a federal law prohibiting one water source from stealing customers from a water system that has federal loans, as Clay Rural Water does.
It lays out four points:
*Clay Rural Water has no legal obligations to serve water to the Hyperion Energy Center;
- The water system does not have the necessary pipes in the ground nor ability to produce that quantity of water;
- Clay Rural Water does not intend to provide water to the Hyperion Energy Center; and,
- The water system consents to Hyperion seeking water from other sources.
Hyperion officials, who could not be reached for comment tonight, have said on several occasions that they’re looking at several sources of water, including shallow wells that it would install along with Missouri River near Elk Point, S.D.
The company holds options to purchase 3,292 acres of farm ground as a site for the project, about seven miles north of Elk Point. It received a required preconstruction air quality permit from the state in August and is now preparing its application for the necessary water permit.
Tagged with: south dakota, hyperion, refinery, sioux city journal, water quantity
