PHILLIPS – The Mt. Blue Standard Water District has been awarded $745,000 in a low-interest loan and a grant to upgrade the water system and extend water lines.

U.S. Sens. Olympia Snowe and Susan Collins made the announcement Wednesday. The district serves customers in Avon and Phillips. It will get $611,000 in loans and a $134,000 grant for the project from the U.S. Department of Agriculture’s Rural Development Program.

The rural development funds are slated to promote economic development in rural areas throughout the country.

“The money we’re getting is going to replacement and repair of old water lines,” Carol Rogers, the water district office manager, said Thursday. “We have a small part of town not connected to the water line.”

A new service line will connect 37 customers, she said.

Some of the customers have old lines and others are not connected to the public water system.

Once the water lines are extended it will bring the total customers in both towns to 378, Rogers said.

The repair and upgrades are scheduled for Sawyer, Whitney, Salmon Hole, Beal, Depot and Mill streets.

The improvements will alleviate a number of possible problems with the aging system, including the potential for lead and copper in the old lines, Rogers said.

The project also will install meters to bill customers on water use rather than a flat rate, Rogers said.

The system has undergone several upgrades, with the last project done to extend water lines to connect Avon Valley Road in Avon.

“We’re hopping to get bids out in April and hopefully soon after that a contractor will start,” Rogers said.