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Albany's Water Treatment Plant, located at 300 Vine St. SW, takes its water supply from the 18-mile Santiam-Albany Canal and can supply up to 20 million gallons of treated water per day (MGD). The water distribution system consists of five storage reservoirs and approximately 190 miles of pipelines, varying in size from 4 to 30 inches in diameter. Together the canal, the Water Treatment Plant, and the distribution system supply water for domestic use and fire protection to most areas of the City of Albany, to users in Millersburg, and a limited number of users outside the urban growth boundary in North Albany who are part of the North Albany County Service District.

Construction of the original treatment plant was completed in 1912, and the plant has been expanded and upgraded on several occasions. In December 1984, the City of Albany purchased the canal, the Water Treatment Plant, the distribution system, and associated reservoirs from Pacific Power & Light (PP&L). Water service was extended to the North Albany area by PP&L in 1979. In July 1990, the City of Albany assumed maintenance responsibilities of the North Albany water system. Although the North Albany area was annexed in July 1991, the water system is still owned by the North Albany County Service District (NACSD) because of outstanding debt service obligations to the Farmerís Home Administration.

According to City resolution, no water line extensions are allowed for the North Albany County Service District water system outside Albany city limits. Only one-inch meter is allowed for each unserved property adjacent to an existing water line as the parcel existed on July 1, 1991, and an additional $5 per month is charged to service this system.

To effectively plan for development of the water system, Montgomery Watson, consulting engineers, were employed in 2000 to study the existing system and to make recommendations for improvements and expansion. The new Water Facility Plan will address water source, treatment, storage, and distribution requirements for providing water service to the City of Albany urban growth boundary through 2020. The 1996 North Albany Water Facility Plan provided a plan for dividing the existing North Albany water system into four distinct pressure zones, constructing a new reservoir to serve the second level, improving service to the third level by adding new transmission lines and a pumping station, and providing a pressure booster system for the fourth level.

Many projects in the 1988 Water Facility Plan have been completed. Capacity improvements to the Treatment Plant were completed in 1990, an 8 million gallon storage reservoir in North Albany was completed in 1992, and transmission and distribution projects are planned each year. In North Albany, projects have been completed that divide the system into three current pressure zones and added new transmission lines in Gibson Hill Road, Scenic Drive, and Skyline Drive. In addition, a 1.2-million-gallon reservoir was built to serve the second level, a new pump station was added to serve the third level, and the pump station that previously served all of North Albany was converted to a second level pumping facility.

The Water Treatment Plant previously had limited hydroelectric power generating capability that was part of the system purchased from Pacific Power & Light. The City operated the generating system from 1984 until 1991, when the Federal Energy Regulatory Commission (FERC) required that the system be licensed to continue operation. Resuming power generation will require upgrades to the generating equipment, and hydraulic improvements to the Canal. Dam improvements, fish ladder upgrades, and installation of a fish screen at the Canal intake at the Santiam River will be required by the regulators regardless of whether or not the City proceeds with power generation. The City received a federal license to operate the power generating facility in 1999.

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