The King George Service Authority has unveiled a memorandum of understanding (MOU) outlining plans to provide the Dahlgren West data center campus with 100% of the reclaimed wastewater from the Dahlgren Wastewater Treatment Plant as a potential cooling supply. As it stands, there’s no rate for that water and thus no charge.

According to Dan Hamilton, general manager of the King George Service Authority, the MOU is not a binding agreement but outlines what the Service Authority is willing to commit to if the project moves forward. A separate water services agreement would govern the formal terms of service.

Under the terms of the MOU, the developer, Dahlgren Innovation Hub, would be required to cover the cost of all construction associated with delivering reclaimed water to the site, including the return pipe, supporting infrastructure, and any necessary facilities such as pretreatment.

The developer would also be responsible for constructing a sanitary extension from the project site to the existing King George sanitary system at a location approved by the Authority, as well as covering the costs of easements, permits, and any expenses the Service Authority may incur during the permitting process.

The agreement also includes the transfer of certain utility improvements to the Authority. In addition, the developer has proffered the existing 200,000-gallon Cleydael Water Storage Tower currently located on Parcel 17-72. Hamilton said the tower is believed to have been built about 20 years ago and has sat empty, though it includes some distribution piping. He said it would be inspected and deemed to be in acceptable condition before being deeded to the Service Authority.

Cathy Binder, chairwoman of the Service Authority’s Board of Directors, noted that Dahlgren Innovation Hub has also offered to assist the Service Authority in connecting the Dahlgren and Courthouse water systems, which is part of the Authority’s long-term interconnection goals.

The developer would also be permitted to purchase potable water for non-cooling uses, with the MOU allowing up to 100,000 gallons per day. The agreement specifically states that potable water cannot be used for cooling.

“That’s the same amount of potable water that could potentially be offered to any other facility of any other type, be it a warehouse, a school, whatever it is. The demands of usage here are not out of the ordinary,” said Hamilton. He noted that 100,000 gallons per day represents about one-tenth of 1% of the capacity of the Dahlgren system.

Those terms apply provided the first data center building is connected to the Authority’s water system within seven years of the execution of the water services agreement. If the first building is not connected within that timeframe, the Authority’s obligation to provide potable water would depend on the amount of water available at that time.

“They would pay an industrial rate for water, and they will not be charged for the wastewater, which we’d otherwise be discharging to the Potomac River after it’s treated,” said Hamilton.

County Attorney Richard Stuart questioned whether the MOU explicitly specifies that the reclaimed wastewater would be provided for “free.”

Director Bryan Metts said that issue is addressed in the water services agreement, a separate document.

Hamilton said the agreement states that Dahlgren West would pay “the applicable rate at the time they make the connection.” However, the Service Authority currently has no rate structure for reclaimed wastewater.

“At this time there is not a market for gray water as a commodity. I would love for there to be one,” Hamilton said. He added that the Service Authority plans to do a rate study.

In a follow-up, Hamilton was asked why he says “there is no market” while the Service Authority is negotiating with a large industrial user that could potentially use the reclaimed water. He was also asked whether anything prevents the Authority from establishing a rate for reclaimed wastewater.

“King George County Service Authority (KGCSA) has not experienced demand for recycled or reclaimed wastewater. However, increased interest in properties across the state from businesses like data centers has led KGCSA to research precedents for a rate structure for the use of recycled or reclaimed wastewater,” said an emailed response from Amy Southall, the county’s community engagement director.

Under the MOU, if the county and Dahlgren Innovation Hub agree to allow additional non -residential third-party users to access the reclaimed water system, the County would charge those users a fee, all of which would be paid to Dahlgren Innovation Hub.

Hamilton said the developer has the right to recoup costs from other users.

“The amount a third party would be charged would be the applicable rates and fees based on the current KGCSA rate structures at the time of connection,” he said.

“All new developments are responsible for the construction of water and wastewater infrastructure,” the reply from Southall reiterated. The amount of the fee charged would be “applicable rates and fees based on the current KGCSA rate structures at the time of connection.”

When explaining the MOU to the Service Authority last month, Hamilton said there is a possibility the developer may ultimately decide not to use reclaimed wastewater for cooling but the developer was looking forward to having the MOU approved.

“We’re excited about it,” Hamilton said of the Service Authority’s position on the MOU. He reiterated that customers’ residential water rates would not be affected.

“As I said also on February 3rd, this particular project is not going to receive anything from the Service Authority that is going to have any impact on your water resources for cooling of this particular facility.”