CASSELTON (AP) - An ethanol plant under construction here will use wastewater that Fargo's treatment plant normally discharges into the Red River.

Bruce Grubb, director of Fargo's enterprise department, said he hopes to have a memorandum of understanding signed by Fargo, the Tharaldson Ethanol Plant and Cass Rural Water Users District within the next week.

Fargo will deliver to the ethanol plant about 350 million gallons of treated effluent per year, or about 8 percent of the annual discharge from the wastewater treatment plant, Grubb said.

The daily discharge from Fargo's treatment plant into the Red River will drop from 12 million to 11 million gallons per day when the ethanol plant goes online.

That means less water for downstream users, including Grand Forks, Grafton, Drayton and Pembina.

Advanced Engineering and Environmental Services Inc. of Moorhead, Minn., analyzed how diverting the wastewater would have impacted downstream users during the last 20 years.

The study found that even if Grand Forks and other downstream users were drawing the maximum amount of water allowed by their permits, the Red River would still have enough water to meet their needs, even during the dry years of the late 1980s.

The State Water Commission is reviewing Fargo's request for a permit to divert water to the ethanol plant.

The commission sent notices about the permit request to rural residents within a 1-mile radius and cities within a 25-mile radius of Fargo's treatment plant. A 30-day comment period passed with no public input, Frink said.

If granted, Fargo's permit will have junior status, meaning existing permit holders will have priority to draw water from the Red River. If a drought hits the region and downstream cities need all of Fargo's treated wastewater, the state could order Fargo to stop diverting water to the ethanol plant, Grubb said.

"That provides them with a level of protection that this won't harm them," he said.

Construction started two weeks ago on the $240 million ethanol plant.

Grubb said the arrangement has two benefits: It takes pressure off rivers and aquifers that the ethanol plant might otherwise have to use, and it uses an untapped revenue source for the city.

"To my knowledge, it's the first utilization of wastewater in this manner in the state of North Dakota," he said.

Fargo will charge $2.52 per 1,000 gallons delivered to the ethanol plant and $1.90 per 1,000 gallons returned to the treatment plant, Grubb said.

The city will net $650,000 to $700,000 per year from the arrangement, after subtracting $350,000 to $400,000 per year in city expenses related to the project, he said.

"It's going to be a win-win situation," Mayor Dennis Walaker said.