The Jefferson County agreement included land swaps and private development of the treatment plants with local oversight. The plants eventually would be turned over to the PSD. The 773-home development is not currently served by sewage treatment.
The homes would be built near the intersection of W.Va. 9 and Kabletown Road east of Charles Town and north of U.S. 340 in the Halltown, W.Va., area.
"The overall behavior of the utility in this matter leads one to wonder whether the Commission should initiate a general investigation into the utility's overall practices," George wrote.
"The record in this case is deeply disturbing and seems to reflect a utility which is willing to go to any lengths to evade its responsibilities under West Virginia law," the judge wrote.
In a statement presented to the Jefferson County Commission Thursday, Public Service District Chairman Marty Kable said the "inflammatory language" used to describe the district's actions has "confused the facts and left the impression in the minds of many that the district is being mismanaged."
Kable defended the public service district by saying many people were concerned that new utility projects in Jefferson County would be paid for by existing residents.
"To their credit, the development sector stepped forward. The district began to see proposals for full developer financing and construction of the very best treatment technology available," Kable said.
Kable said there was never any intention of "scheming or scamming the community."
Kable said the public service district plans to appeal George's decision.
Herb Jonkers, one of the developers involved in the housing project, told the commissioners he believed George had a "burr up his saddle" when he made his decision.
Jonkers called the situation "nonsense."
"I don't know if I will characterize it as nonsense," said Commission President Rusty Morgan.