&EPA

United States
Environmental Protection
Agency

ARSENIC IN DRINKING WATER
COMPLIANCE SUCCESS STORIES

Cedar Woods, NC: System Purchase by
Another Public Water System

Case Study Contact Information

Gary Moseley

Heater-Aqua North Carolina
(704) 489-9404

A private utility firm agreed to purchase the Cedar Woods, NC water system and install
3,000 feet of mains to connect it with a neighboring water system with low-arsenic
source water.

Lessons Learned

To address the high arsenic levels in the source of supply for the Cedar Woods, North
Carolina water system, the system was purchased by a large private utility and connected
with the nearby Hickory water system, and the existing well was abandoned.
Interconnection with nearby viable water systems is a good option for small water
systems that lack the financial, technical, and managerial capacity to find a new source or
install treatment for arsenic removal.

System Information

Cedar Woods is a small community water system serving approximately 117 people in
Alexander County, North Carolina. The system consisted of one chlorinated ground
water well. The well's arsenic levels (after chlorination) averaged 16-18 ppb.

Background

In 2002, the state Department of Environment and Natural Resources' Public Water
Supply Section began requiring Cedar Woods to provide public notice to customers in
advance of the new arsenic standard coming into effect. After receiving repeated health


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warnings about arsenic in drinking water, many Cedar Woods customers started
purchasing bottled water as an interim measure. The state continued to send notices to the
system requesting action to ensure that the system would meet the new standard.
However, the system owner was not responsive to state requests and was not financially
able to install treatment or purchase the additional land that would be required to drill a
new well. Ultimately, the state sent an Administrative Order to the system owner setting a
deadline of January 23, 2006 to permanently reduce the arsenic levels below the revised
maximum contaminant level. This Order prompted the system owner to relinquish
ownership of the system.

Compliance Strategy

The North Carolina Public Water Supply Section (PWSS) informed the Utilities
Commission that Cedar Woods was considered a distressed water system that did not
have the technical, managerial, or financial capacity to make the improvements necessary
to comply with the new arsenic standard.

The Utilities Commission had previously established a financial incentive arrangement
for Heater-Aqua North Carolina (a private utility firm that owns approximately 725
systems across the state) whereby the company is eligible for recovery of costs incurred
to help distressed utilities address water quality problems. The Commission identified
Heater-Aqua North Carolina as a potential willing investor to assume control of Cedar
Woods.

In the spring of 2005, the PWSS initiated contact with Heater-Aqua North Carolina
Utilities and met with Heater-Aqua representatives and the Cedar Woods system owner
to discuss possible interconnection with the nearby Hickory system and purchasing
options. The Hickory water system is a large municipal system (treatment capacity is
approximately 34 MGD) using a surface water supply. Heater-Aqua agreed to purchase
the Cedar Woods system and interconnect it with the Hickory water system. To
interconnect the systems, approximately 3,000 feet of mains were installed at a cost of
approximately $65,000. Heater-Aqua arranged to purchase water from Hickory and sell it
to their Cedar Woods customers. A master meter was installed at the point where the
interconnection ties into the Cedar Woods system.

Cedar Woods has been receiving water from Hickory since the spring of 2006. The
system has never had any detectable amounts of arsenic in its treated water. While rates
are now significantly higher (up from approximately $19 per month to $35 per month),
the Cedar Woods customers understand that the water system's compliance options were
limited and expensive. Most importantly, they are now receiving water that complies with
the arsenic standard.


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