Lenoir has cleared a final hurdle in the effort to extend its water intake system farther and deeper into Lake Rhodhiss.

City officials learned late Friday afternoon that the Federal Energy Regulatory Commission (FERC) had signed off on the $6.5 million project. The agency has been involved in the relicensing of Duke Energy, which uses the lake for hydroelectric power generation, and Lenoir needed FERC approval to move the project forward.

For more than two years, Lenoir has sought to move its intake system from the shore of Lake Rhodhiss into deeper water. A drought that began in March 2007 and extended through the summer threatened to lower lake levels below the city's two sluice gates. Mandatory water restrictions and a return to normal rainfall alleviated the situation earlier this year. Nevertheless, the severe drought was the second in the past decade, and the city - which provides a majority of the public water to county residents - set out to find a solution.

Funding for the project has come from a variety of sources, including a $1 million grant from the Golden LEAF Foundation last year and another $500,000 from the North Carolina Rural Economic Development Center. According to Lenoir City Manager Lane Bailey, the FERC approval allowed the city to remain eligible for an additional $3 million in federal stimulus funds, half of which through an interest-free loan and the other part through a principal forgiveness program.

Though the city is not guaranteed to receive the funding, Bailey said any additional money would come from a state revolving loan fund at approximately 2 percent interest.

"We are going to plan from a financial standpoint like we won't be getting those (stimulus) funds," Bailey said. "But we will be in excellent position to get those."

As the federal stimulus deadline approached, Bailey said the city turned to Washington and officials in Raleigh for assistance, including Rep. Patrick McHenry and his office.

"McHenry's office has bent over backward to speed up this process as quickly as possible," Bailey said. "The congressman was writing letters, and they were telling FERC to work on this before any other project. We are very grateful."

Bailey added that Mayor David Barlow and Councilman Lewis Price played pivotal roles in getting the project approved. Barlow said the opportunity to obtain additional outside funding sources is designed to take the burden off local taxpayers.

"In these bad times there's no greater need to keep your facilities modern and efficient," Barlow said. "The average person just doesn't realize how expensive it is to treat water and sewer. This will help hold the rates down."

Lenoir Public Utilities Director Mack "Buddy" Edmisten said once the system is installed, customers should see improved water quality because the intake will be in a swifter current instead of along the shoreline.

"If you can get out in the run of the river, you can get better water quality," Edmisten said. "That water is moving faster."

Bailey said the engineering phase of the project has been completed. He anticipates putting the project out for bid in the coming weeks. The city then will take its proposal to the North Carolina Local Government Commission for financing approval.

He said if all goes well, construction of the new intake could begin next spring. Bailey said the intake will be built to handle future water plant expansion.