The roller coaster trip for the proposed King William Reservoir will get at least one more bump this year as the Virginia Marine Resources Commission, which rejected a key permit last year, has agreed to grant a new hearing to proponents.

In a deal struck by state Attorney General Jerry Kilgore, the commission agreed to grant the city of Newport News a new quasi-legal hearing in exchange for dropping a lawsuit against the VMRC.

The commission last year voted 6-2 to deny a permit needed by the city so it could draw water from the Mattaponi River to fill its proposed 1,500-acre reservoir on nearby Cohoke Creek in King William County, flooding more than 400 acres of wetlands.

The vote to reject the city’s permit request followed concerns raised by the Virginia Institute of Marine Science that the proposed Mattaponi River intake—which could draw up to 75 million gallons a day—was in the midst of the most important spawning area for American shad in Virginia.

Shad, a species whose population is greatly depleted from historic levels, has been a major focus of restoration actions throughout the Bay, including expensive efforts to improve fish passage and rear hatchery fish for stocking.

After the VMRC’s rejection, the city later requested a more formal, court-like hearing before the commission, but was again rejected. Newport News took its case for a new hearing to circuit court, where the judge indicated he would rule in favor of its request.

After Kilgore said he would not appeal the decision, the commission agreed to a compromise in which it would hold a formal court-like hearing on the issue. That would prevent a court decision that would have set a legal precedent allowing anyone denied a habitat permit to seek a new, quasi-legal hearing in which specific guidelines are followed for the types of evidence presented and questions asked.

“It was feared that we could have more than one or two formal hearings a month, and we don’t have the capability of doing that,” said Wilford Kale, a spokesman for the commission. “That would definitely compromise and complicate an already heavy load by the commission.”

Under the agreement, the city cannot again go to court seeking a new hearing if its request is again rejected by the commission. The city could still challenge an adverse decision based on the merits of the case.

Kale said the city is expected to present an amended proposal to withdraw water from the Mattaponi, which will then be reviewed by VIMS scientists and made available to the public.

A new hearing is expected in July or August, he said. Under the agreement, city representatives and opponents will have equal time to make their cases—in the earlier two hearings, opponents overwhelmed project supporters—and the hearing will focus exclusively on issues related to the potential impact of the water intake on fisheries.

But, Kale said, the commission members could review all issues when making their decision.

Environmentalists criticized Kilgore, who has indicated support for the city’s proposal in the past but was handling VMRC’s case, for not supporting an appeal by the commission and instead negotiating a deal they say gives the city the upper hand by limiting the scope of the hearing.

“One might ask, whom is the attorney general representing—VMRC or Newport News,” said Roy Hoagland, director of the Chesapeake Bay Foundation’s Virginia Office.

Several reservoir opponents early had asked that Kilgore remove himself from the case. A spokesman for Kilgore said the compromise prevents a costly lawsuit.

Outside its deal for a new hearing, Newport News has waged a public relations campaign to build support for the reservoir, and project proponents made several attempts in the General Assembly to strip power from the VMRC.

The city has insisted the reservoir, which will cost more than $150 million to build, is essential to provide water for the 600,000 residents it predicts will be in its service area by midcentury.

The city has long insisted that its mitigation plans would more than offset the wetlands destroyed by the reservoir, and scientists funded by the city disputed that the intake would have any significant impact on shad or other fish.

But the proposal is wildly unpopular in the rural area where the reservoir would be constructed. Critics say the new wetlands would not replace the function of those being lost and note that, if approved, the project would be the largest permitted loss of wetlands in the mid-Atlantic region since the Clean Water Act was passed in 1972.

Opponents, including two nearby Native American tribes, also object to the reservoir because it would infringe on wild areas historically used by the Mattaponi and Pamunkey tribes, and would drown an estimated 100 archaeological sites.

The Corps of Engineers Corps’ Norfolk District in 2001 rejected the city’s application for needed federal permits, questioning the city’s projected water needs and saying “it is not reasonable to build such an environmentally damaging project to satisfy a need that may never materialize.”

Then-Gov. Jim Gilmore invoked the rarely used authority of a governor to challenge a decision of a district, and sent the matter to the Corps’ North Atlantic Division in New York. In 2002, Brig. Gen. Stephen Rhoades, commander of the division, sided with Newport News, calling the proposed reservoir the “least damaging practicable alternative” to meet long-term water needs.

That left the permit from the VMRC as the last major hurdle for the project.