Source: Rhino Times Greensboro

Water authority woos supremes

by Alex Jakubsen

January 31, 2013

An ongoing lawsuit against the Piedmont Triad Regional Water Authority (PTRWA) could raise water rates and generally hamper the ability of public bodies to provide water to residents.

The PTRWA in January petitioned the North Carolina Supreme Court to hear the case in which lower courts have determined that hydroelectric power plants downstream of the Randleman Dam are entitled to damages because PTRWA is taking water from the Deep River basin and transferring it to the Haw River basin.

The PTRWA began the application process for the Randleman Dam in 1988, finally receiving a permit for its construction in 2001, only to be sued seven years later by L&S Water Power Inc., Brooks Energy LLC, Deep River Hydro Inc., Hydrodyne Industries LLC, William Dean Brooks and Howard Bruce Cox for infringing on the companies’ “riparian rights” without compensation.

Chip Hagan, the husband of North Carolina Democratic Sen. Kay Hagan, is part owner of Hydrodyne Industries.

In April 2011, the North Carolina Court of Appeals upheld a decision by Guilford County Superior Court that the hydroelectric power companies are entitled to compensation for loss of stream flow under the Fifth Amendment of the US Constitution.

Nine days before Superior Court Judge Calvin Murphy ruled in favor of the hydroelectric power companies and against the PTRWA, Sen. Hagan nominated Murphy to a lifetime position on the federal court. Sen. Hagan withdrew the nomination after the possible conflict of interest was brought to light.

Executive Director of the PTRWA Greg Flory said that, if allowed to stand, the decision by the Court of Appeals could have a broad effect. “It seems to change the way that North Carolina law has been decided in the past,” he said.

The petition by the PTRWA includes arguments that the Court of Appeals decision is unconstitutional and a far-reaching threat to the ability of public bodies to provide water to residents of North Carolina.

The PTRWA attorneys noted in the petition that the hydro electric power companies are suing for loss of something that was not theirs in the first place.

According to the North Carolina Constitution and the public trust doctrine, all navigable waters are owned by the state unless specifically sold to another party for a public use.

So the owners of the power plants have the right to make use of water as it flows through their property, but they do not own it. So they would not be entitled, as the Court of Appeals found, to compensation for reduced water flow by the takings clause of the Fifth Amendment. That clause refers to private property, not rights of use.

The petition also asserts that under North Carolina law regarding holding and diverting water, the diversion of water by a public agency like the PTRWA to supply water for citizens is considered a “superior riparian use.”

According to the PTRWA, the Court of Appeals, in granting the power companies the right to damages, relied on case law that had been overridden by legislation.

The petition also states that if the decision of the Court of Appeals is not overturned, “It will needlessly increase the cost of water to the citizens of this state; it will deter or prohibit the development of future public water supplies for the benefit of the citizens of this State; and it will place regulation of these resources back more than one hundred years.”

The petition also says that the plaintiffs did not challenge the Environmental Management Commission certificate the state granted the PTRWA for the redirection of water flow.

And while the PTRWA is authorized by the state to redirect 30.5 million gallons of water from Deep River to the Haw River, they are currently only redirecting 12 million gallons of water.

Flory said rather than restricting the flow of water, the Randleman Dam may be benefitting the plaintiffs. “Really, we would say at some points we’ve probably increased the flow at what would be a low period of flow for them.”

The decision upheld by the Court of Appeals does not specify what damages the plaintiffs are entitled to, but allows them to be decided by a jury trial. Throughout the lawsuit, there has been concern that a victory by the hydroelectric power companies would invite lawsuits from other parties along the Deep River, which flows all the way to Wilmington, and lawsuits against other dam owners in North Carolina.

Flory said that other rivers and streams that merge with the Deep River would make it difficult to argue they were effected from the Randleman Dam.

“Our hope is, I guess, that would be a limiting factor,” Flory said.