Interim Joint Committee on Natural Resources and Energy


Minutes of the<MeetNo1> 4th Meeting

of the 2017 Interim


<MeetMDY1> September 7, 2017


Call to Order and Roll Call

The<MeetNo2> 4th meeting of the Interim Joint Committee on Natural Resources and Energy was held on<Day> Thursday,<MeetMDY2> September 7, 2017, at<MeetTime> 11:00 AM, at Kentucky American Water (KAW) in Lexington <Room>. Senator Jared Carpenter, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Jared Carpenter, Co-Chair; Representative Jim Gooch Jr., Co-Chair; Senators C.B. Embry Jr., Ernie Harris, Ray S. Jones II, John Schickel, Brandon Smith, Johnny Ray Turner, and Whitney Westerfield; Representatives John Blanton, Larry Brown, Matt Castlen, Tim Couch, Jeffery Donohue, Kelly Flood, Chris Fugate, Suzanne Miles, Jim Stewart III, and Jill York.


Guests: Jimmy Keeton, Director, Government Affairs, KAW; Brad Kinckiner, Manager, Health and Safety Programs, KAW; Nick Rowe, President, KAW and Senior Vice President, American Water Southeast Division; Ashli Watts, Vice President, Public Affairs, Kentucky Chamber of Commerce (the Chamber); David Shehee, Superintendent, Water Quality and Environmental Compliance, KAW; and Brent O’Neill, Director, Engineering, KAW.


LRC Staff: D. Todd Littlefield, Stefan Kasacavage, Janine Coy-Geeslin, and Rachel Hartley.


The July 6, 2017, and August 3, 2017, minutes were approved by unanimous voice vote.


Welcome to Kentucky American Water

            Jimmy Keeton welcomed staff and legislators to KAW. Brad Kinckiner advised all guests of health and safety procedures.


            Nick Rowe reported to the Committee that KAW manages more than 370 individual water systems in the country with 48,000 miles of distribution and collection mains. KAW was established in 1882 as Lexington Hydraulic and Manufacturing Company. The company was acquired by Community Water Service Company in 1927. The company name was changed to Kentucky American Water in 1973. There are approximately 130 employees that serve half a million people.


A Citizen’s Guide to Kentucky Infrastructure

            Ashli Watts provided a report on the water infrastructure in Kentucky. She explained how infrastructure plays a critical role in the daily affairs of businesses and economic development in the Commonwealth. Kentucky is located within 600 miles of 65 percent of the nation’s population. In 2016, a Gallup poll found that 75 percent of Americans favor spending more money to improve infrastructure.


            In 2005, a Kentucky legislative report found that there are fewer drinking water systems in Kentucky than in most states, and the number of systems continues to decrease. The Kentucky Infrastructure Authority (KIA) provides low-cost loans to assist communities in developing water systems.


The Kentucky Division of Water’s 2016 annual report indicated that drinking water quality is good in Kentucky. The report shows a low number of health based violations related to contaminants, and most violations are administrative in nature. The national average for health violations based on population served was 6.8 percent in 2014 and 8.1 percent in 2015. In Kentucky, health violations based on population served was 15.3 percent in 2014 and 10.6 percent in 2015. Ms. Watts explained that there is movement in the right direction with a 5 percent drop in violations.


The KIA’s Water Management Plan surveyed water districts for planned projects and identified 2,089 drinking water projects at a total cost of $1,909,356,450. The American Society of Civil Engineers (ASCE) estimated Kentucky has $6.2 billion in drinking water infrastructure needs. The average age of water plants and water tanks is 37 years and 26 years, respectively.


The Division of Water has identified 277 Kentucky communities not under federal consent decrees, but have varying degrees of aging infrastructure that can cause overflows at wastewater management treatment plants. The KIA’s Wastewater Management Plan identified 1,484 needed wastewater projects in Kentucky with a total cost of more than $2 billion. ASCE estimated that Kentucky has $6.24 billion in wastewater infrastructure needs over the next 20 years.


Ms. Watts said the Chamber considers the Public-Private Partnerships (P3) legislation passed in 2016 to be part of the solution to address Kentucky’s infrastructure needs. The Chamber supports state and local governments embracing the P3 legislation and aggressively soliciting private partners to assist in the financing, construction and operation of infrastructure projects.


Water Quality and Environmental Compliance

            David Shehee said quality of water sources is important to KAW and its customers because, if fewer contaminants are put into the sources, then there are fewer contaminants to remove through water treatment. There are 2.1 million people who die annually in the United States from water related illnesses. Ninety-five percent of Kentuckians have access to public water systems. KAW is regulated by the United States Environmental Protection Agency, Kentucky Division of Water, Kentucky Public Service Commission, and by local ordinances.


            Mr. Shehee said older water treatment plants were designed to reduce turbidity. The infrastructure needs to be updated to keep up with new regulations on disinfection by-products, organisms, and emerging contaminants.


            In response to Senator Westerfield, Mr. Shehee said KAW is constantly working with American Water Association Research Foundation to discover what research exists on emerging contaminants and what problems might develop in the future. It is important to keep contaminants out of the water. However, if contaminants reach the water it must be treated. Also, upgrades to infrastructure may be needed. Once the contaminants are filtered out of the water, the accumulated contaminants are mostly landfilled. KAW reuses all of its solid contaminants on site.


Infrastructure Challenges

            Brent O’Neill reported that most water infrastructure in the United States is at the end of its useful life. The pipes installed were intended to last 65-95 years. Some pipes are more than a century old. There are 1.2 million miles of distribution pipes within the United States. Kentucky has 62,200 miles of main distribution pipes.


In 1980, 10 percent of all pipes were in poor shape. In 2010, this percentage increased to 45 percent of all pipes. The reason for the increase of pipes in poor shape is due to the type of material of pipes. The increased age and type of material creates a greater risk of failure. There are currently 650 breaks per day in the United States with $2.6 billion in lost water.


            In 2017, the Infrastructure Report Card by the American Society for Civil Engineers issued a grade of “D” for the drinking water infrastructure across the United States. Over $650 billion is needed in investments in water infrastructure over the next 20 years.


            In 2013, the Infrastructure Report Card by the American Society for Civil Engineers issued a grade of “C+” for the drinking water infrastructure across. Mr. O’Neill said that the P3 legislation can assist local communities access funding to overcome water infrastructure challenges in Kentucky.


            In response to Senator Smith, Mr. O’Neill said that Lexington’s primary water source is the Kentucky River, and some water is taken from several reservoirs in Lexington. Each station pumps on average 45 million gallons per day from the Kentucky River, with as much as 70 million gallons per day pumped in the summer.


            In response to Senator Carpenter, Mr. O’Neill said a major concern in the water industry is small water systems are starting to age, and they do not have funds to improve infrastructure. KIA has funds available to help smaller communities. However, another concern is whether these funding sources can keep pace with infrastructure needs. Mr. O’Neill reiterated that the P3 legislation can be another funding tool to potentially help these communities.

The next meeting of the Interim Joint Committee on Natural Resources and Energy will be on October 5, 2017. Documents distributed during the meeting are available in the LRC Library.


There being no further business, the meeting was adjourned.