1. Biosolids Management Program Updates: CFT and BMP Blue Plains Regional Committee April 26, 2007

2. 2 Cross Functional Team Activities Update Tracking regulatory changes Tracking regulatory changes State changes State changes Local ordinances Local ordinances Working with DMS to solve issues Working with DMS to solve issues 3 of 4 loading cranes running as of Monday 3 of 4 loading cranes running as of Monday DMS personnel attend CFT meeting DMS personnel attend CFT meeting Transitioning to new contractors Transitioning to new contractors Urban Service/Nutriblend attended last week Urban Service/Nutriblend attended last week Resolving some loading/access issues Resolving some loading/access issues

3. 3 Cross Functional Team Activities Update Continued Monitor EMS aspects Monitor EMS aspects Goals progress Goals progress Environmental impacts Environmental impacts Inspection reports Inspection reports Truck overturned in field last month – no injuries, truck damaged Truck overturned in field last month – no injuries, truck damaged No odor complaints No odor complaints Product quality high – one or two days where TMA (dead fish) noted, result of emulsion polymer use - used product in remote areas Product quality high – one or two days where TMA (dead fish) noted, result of emulsion polymer use - used product in remote areas Working with BMP team to provide input and feedback Working with BMP team to provide input and feedback

4. 4 Environmental Impacts

5. 5 Biosolids Management Plan Update Background Background Regulatory Climate in VA Regulatory Climate in VA Long Term Plan Long Term Plan Short Term Plan Short Term Plan

6. 6 Background The Board, in October 2006, accepted Management’s recommendation to reject the Digestion Facility (EDF) bid, due to the high bid price, and placed the project on hold WASA Management recommended continuous monitoring of: 1.Construction bidding environment 2.Regulatory initiatives that could impact the viability of land application 3.Maturing of evolving technologies 4.WASA’s related financial position

7. 7 Today’s Topics Regulatory Climate in VA Regulatory Climate in VA Recent events in VA Recent events in VA Efforts to counteract negative sentiments Efforts to counteract negative sentiments Long Term Biosolids Management Plan Long Term Biosolids Management Plan Monitoring new technologies Monitoring new technologies Research pilot studies Research pilot studies Looking at more design alternatives Looking at more design alternatives Short Term Solutions Short Term Solutions Rehab of lime facilities Rehab of lime facilities Continued research that supports land app Continued research that supports land app Capacity issues with dewatering Capacity issues with dewatering

8. 8 Regulatory Climate WASA’s biosolids product: WASA’s biosolids product: Is primarily land applied in Virginia Is primarily land applied in Virginia Comprises half of biosolids applied in Virginia Comprises half of biosolids applied in Virginia The Virginia legislature has 3 bills awaiting the Governor’s signature that will impact land application The Virginia legislature has 3 bills awaiting the Governor’s signature that will impact land application Regulatory initiatives are driven by public sentiment and vocal opponents Regulatory initiatives are driven by public sentiment and vocal opponents

9. 9 Regulatory Initiatives Requirements of legislation in VA (awaiting Governor’s signature) Requirements of legislation in VA (awaiting Governor’s signature) HB 2802 – Consolidates regulation of biosolids application under DEQ HB 2802 – Consolidates regulation of biosolids application under DEQ $7.50 fee per dry ton (~ $800,000/yr for WASA) $7.50 fee per dry ton (~ $800,000/yr for WASA) New permit applications give site abutters a 30-day comment period New permit applications give site abutters a 30-day comment period Training and certification for persons applying Class B sludge Training and certification for persons applying Class B sludge SB 1300 – Provides that a locality may regulate sludge storage SB 1300 – Provides that a locality may regulate sludge storage Special exception or special use permit to store sludge before application Special exception or special use permit to store sludge before application Does not apply if sludge is stored on same farm it will be applied to Does not apply if sludge is stored on same farm it will be applied to HJ 694 Biosolids – Requires panel of experts to study impact of land application of biosolids on human health and the environment HJ 694 Biosolids – Requires panel of experts to study impact of land application of biosolids on human health and the environment Bottom Line – WASA’s biosolids land application program is still viable and cost effective – BUT the long-term viability MAY be impacted by further public concern and anti-biosolids groups. WASA may be well served with a hedge (Class A product) against the potential for legislative actions in response to negative public opinion Bottom Line – WASA’s biosolids land application program is still viable and cost effective – BUT the long-term viability MAY be impacted by further public concern and anti-biosolids groups. WASA may be well served with a hedge (Class A product) against the potential for legislative actions in response to negative public opinion

10. 10 Recent Events in Virginia Two restrictive local ordinances defeated Two restrictive local ordinances defeated Bedford and Campbell Counties Bedford and Campbell Counties Each instead adopted VDH model ordinance Each instead adopted VDH model ordinance Outreach efforts by Virginia Biosolids Council very effective Outreach efforts by Virginia Biosolids Council very effective Tracking press stories Tracking press stories Biosolids fact books (Bedford and Campbell Counties) Biosolids fact books (Bedford and Campbell Counties) Letters to Virginia Farm Bureau and elected officials Letters to Virginia Farm Bureau and elected officials Legality of passing restrictive local ordinances Legality of passing restrictive local ordinances Financial implications Financial implications

11. 11 Long Term Biosolids Management Plan Monitoring new technologies Monitoring new technologies Research pilot studies Research pilot studies Looking at more design alternatives Looking at more design alternatives Plan will be completed a year from now Plan will be completed a year from now

12. 12 Evolving Technologies Preliminary investigations indicate that: Preliminary investigations indicate that: New technologies are now available that were not proven/available when EDF facility design started New technologies are now available that were not proven/available when EDF facility design started Some of these technologies produce Class A biosolids with less digestion capacity than the EDF project Some of these technologies produce Class A biosolids with less digestion capacity than the EDF project A review of technologies is now warranted and is underway, including: A review of technologies is now warranted and is underway, including: Cambi – Thermal Hydrolysis Cambi – Thermal Hydrolysis United Utilities – Enzymic Hydrolysis United Utilities – Enzymic Hydrolysis EnerTech Technologies – SlurryCarb EnerTech Technologies – SlurryCarb Limited-scale piloting will be done for the most feasible technologies, as appropriate Limited-scale piloting will be done for the most feasible technologies, as appropriate Cambi – Thermal Hydrolysis United Utilities – Enzymic Hydrolysis

13. 13 Biosolids Management Planning BMP Update 2001 Biosolids Management Plan (BMP) must be updated to: 2001 Biosolids Management Plan (BMP) must be updated to: Evaluate potential markets for various products Evaluate potential markets for various products Evaluate new proven technologies for volume reduction Evaluate new proven technologies for volume reduction Re-evaluate value of a Class A biosolids product Re-evaluate value of a Class A biosolids product Reduce cost – goal is short-term payback period Reduce cost – goal is short-term payback period Assure long-term viability of BMP Assure long-term viability of BMP BMP Update Technology Approach – 2 Steps BMP Update Technology Approach – 2 Steps Screen potential technologies Screen potential technologies In-depth evaluation of most viable screened technologies In-depth evaluation of most viable screened technologies

14. 14 Need short term plan while long term BMP is implemented Need short term plan while long term BMP is implemented Capacity issues with dewatering Capacity issues with dewatering Rehab of existing facilities Rehab of existing facilities Continued research that supports land app Continued research that supports land app Interim (Short Term) Solutions

15. 15 Biosolids Management Planning Current Status of Biosolids Program Blue Plains produces a high quality Class B product Blue Plains produces a high quality Class B product Minimal amounts of biosolids are sent to landfill (0% in 2006) Minimal amounts of biosolids are sent to landfill (0% in 2006) Environmental Management System certification, under the National Biosolids Partnership, provides proactive management of the land application process Environmental Management System certification, under the National Biosolids Partnership, provides proactive management of the land application process

16. 16 Biosolids Management Planning Current Status of Solids Processing 2001 Biosolids Management Plan called for digestion by 2009 2001 Biosolids Management Plan called for digestion by 2009 As digesters will not be on-line in 2009 As digesters will not be on-line in 2009 50% reduction in solids to be dewatered will not be achieved 50% reduction in solids to be dewatered will not be achieved Continued reliance on lime stabilization Continued reliance on lime stabilization Current solids processing systems: Current solids processing systems: Are sized for reduced digested sludge volume Are sized for reduced digested sludge volume Have constraints and equipment reliability issues Have constraints and equipment reliability issues Existing solids processing systems must be reinforced to: Existing solids processing systems must be reinforced to: Increase reliability and assure adequate capacity Increase reliability and assure adequate capacity Repair equipment failures more quickly Repair equipment failures more quickly Eliminate system bottlenecks that limit liquid process operations Eliminate system bottlenecks that limit liquid process operations

17. 17 Dewatering Capacity Issues Current Dewatering Capacity Current Dewatering Capacity 495 dtpd (11 centrifuges, 45 dtpd/each) 495 dtpd (11 centrifuges, 45 dtpd/each) 495 dtpd is 2 week peak 495 dtpd is 2 week peak Peak day is 719 dtpd Peak day is 719 dtpd Solids back up in plant on peak days Solids back up in plant on peak days Can bring in contract dewatering if necessary Can bring in contract dewatering if necessary Assumed that digesters in place in 2009 Assumed that digesters in place in 2009 Tonnage cut in half, plenty of capacity Tonnage cut in half, plenty of capacity

18. 18 Rehab Existing Facilities Solids facility equipment unreliable – much was to be mothballed in 2009 Solids facility equipment unreliable – much was to be mothballed in 2009 EMPC-IV report showed deficiencies in most of the critical conveyors, lime feed system, cranes, etc. EMPC-IV report showed deficiencies in most of the critical conveyors, lime feed system, cranes, etc. EPMC-1A now putting together a plan to correct deficiencies and to support the WASA Dept of Maintenance Services EPMC-1A now putting together a plan to correct deficiencies and to support the WASA Dept of Maintenance Services

19. 19 Maintain Existing Land Application Program Continue diversification efforts Continue diversification efforts Composting in VA Composting in VA More mine reclamation (EPA demo site) More mine reclamation (EPA demo site) Continuing to pursue PA land base Continuing to pursue PA land base Continue with proactive communication efforts Continue with proactive communication efforts Continue to support research efforts Continue to support research efforts Product improvement Product improvement Build confidence w/public and regulators Build confidence w/public and regulators Diversify program Diversify program

20. 20 Blue Plains 2006/2007 Biosolids Research Projects

21. 21 The End Questions?.