The county Water Authority’s lengthy effort to take over a state water supply permit originally issued to the county has moved a significant step forward.
The switch in ownership is essential before the authority can go to bond markets for $37 million in borrowing to complete construction of the county water system.
“This is wonderful news,” said Water Authority Chairman John E. Lawler, the Waterford town supervisor. “It is confirmation of the public need for this project.”
The state Department of Environmental Conservation notified the authority this week that its application for the transfer is complete. That should lead to the department issuing a permit in about six weeks, after several months of study.
The $67 million water system, which will run a 28-mile pipeline from the Hudson River in Moreau to the Luther Forest Technology Campus in Malta and Stillwater, is already under construction using state grant money.
Building the water system is integral to efforts to bring an Advanced Micro Devices computer chip factory to Luther Forest.
AMD would be buying 2.4 million gallons per day, but the towns of Wilton and Ballston have also signed deals to buy water. The authority must sell 3 million gallons a day to break even; it has contracts for 3.25 million gallons.
After three years of planning, the county government received the required DEC water supply permit in late 2006, and construction began last summer. When the Water Authority took over the project ownership last year, officials initially thought transferring the permit would be quick and easy, but it hasn’t been.
DEC regulators raised questions about the changing public necessity because the Clifton Park Water Authority withdrew interest in 2006, and in December DEC asked the county authority for more information.
Based on a Jan. 4 reply from the authority listing other communities that may become water customers in the future — including Clifton Park, Stillwater, Saratoga Springs and Moreau — DEC on Thursday declared the application complete. It was ruled a “minor project” for state review purposes, with a decision required within 45 days.
“This letter makes it highly probable the permit will be issued,” Lawler said Friday.
He thanked both U.S. Rep. Kirsten Gillibrand, D-Hudson, and state Sen. Majority Leader Joseph L. Bruno, R-Brunswick, who provided assistance dealing with DEC.
Getting the permit is the last hurdle the authority must cross before going to Wall Street for financing, Lawler said. The borrowing will be repaid from future water sales.
The project still faces other hurdles, though, including lawsuits filed by Alexander Mackay of Stillwater, one of which questions the constitutionality of locating parts of the water system in Moreau Lake and Saratoga Spa state parks.
AMD, meanwhile, has yet to make a final commitment to building its $3.2 billion plant in Luther Forest. It has until June 2009 to do so and qualify for state incentives totalling $1.2 billion.
Since the AMD plan was announced by state leaders and AMD in June 2006, the company has seen its stock price collapse from $25 per share to around $6 per share, as it has lost ground to rival microprocessor-maker Intel Corp.
For 2007, the company had total loses of $3.3 billion, but much of that was from bookkeeping charges related to the 2006 acquisition of graphics-chip maker ATI. Financial analysts responded positively to fourth-quarter figures AMD released Thursday, which showed the actual operating loss was $97 million, a significant improvement from results earlier in the year.
On Friday, AMD’s stock rose, finishing the trading day at $7.07, up 11.5 percent from the day before.
Meeting with financial analysts in New York in December, AMD Chief Executive Officer Hector Ruiz said the company should be profitable by the second half of 2008, and it remains committed to building its New York plant.
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Categories: Schenectady County