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State gives reservoir project an unprecedented pass

By Bruce Henderson
bhenderson@charlotteobserver.com

The state agency charged with protecting North Carolina’s waters let plans for a controversial water-supply reservoir west of Charlotte advance with no scrutiny.

Cleveland County Water, which serves rural residents, had labored since 2000 to win approval for the impoundment. Environmental rules make reservoirs hard to build because they drown streams, wetlands and rare species.

In an unprecedented move, the N.C. Division of Water Quality made the path easier. The division simply waived a state permit that says the project won’t hurt water quality.

The decision last month came after Republican-led legislators ordered regulators to collaborate with communities in building reservoirs.

Federal authorities disagree on the Cleveland County reservoir’s impact.

The U.S. Army Corps of Engineers, which also has to sign off on the reservoir, says it would cover 1,500 acres of forest and farmland, destroying 24 miles of streams, six acres of wetlands and a federally threatened plant community.

The Environmental Protection Agency has also urged the county to look for alternatives.

Federal authorities can’t approve projects that may hurt water quality, from freeway construction to hydroelectric dams, until the state does. That gives North Carolina a veto to stop environmental damage or allow it with special conditions.

Cleveland County applied in May for the state water-quality certificate. Sixty days later – the time allotted to act on such applications – the Division of Water Quality waived the requirement for the permit.

With that, Cleveland County Water had its state approval without the public notice, hearings or environmental studies that are spelled out in environmental rules.

“I think this government does not want to give the citizens a voice, and any opportunity to cut out public comment is a welcome opportunity,” said Ron McCollum, a longtime opponent who lives near the reservoir site.

McCollum, a social worker and educator, argues that other alternatives would meet the district’s water needs. The reservoir would flood historic farms in northern Cleveland County that are part of its cultural heritage, he says.

Federal opposition

The reservoir faces more imposing opposition from federal regulators. The Corps says Cleveland County could instead buy water from other systems – as nearby Forest City has offered – or expand its current intake.

The likelihood that the Corps would deny approval drove the decision to forgo the state certificate, said N.C. Division of Water Resources director Tom Reeder, who signed the waiver. The division now includes water-quality staff.

“The state of North Carolina looked at all this and said there’s really no value added to us getting involved in this whole thing,” Reeder said. “Cleveland County would have had to spend more money that would not go to any good purpose.”

The water district says it has already spent $1.7 million so far on the reservoir. “I didn’t want to put any more burden on Cleveland County,” Reeder said.

As for opponents like McCollum, he said, “the Corps has their back.”

The decision is in stark contrast to that of aluminum maker Alcoa, which tried for years to win a water-quality certificate for its hydroelectric project on the Yadkin River east of Charlotte.

Just as Alcoa expected state approval early this month, Gov. Pat McCrory’s administration filed a suit claiming ownership of the Yadkin riverbed, blocking the certification.

“This (Cleveland County) project, which serves no purpose and the water district can’t even afford, is a troubling example of the direction political influence is taking in Raleigh,” said attorney D.J. Gerken of the Southern Environmental Law Center, which is following the case.

Regulations targeted

Republicans who won majorities in the state legislature in 2010 say environmental regulations are job-killers. The Division of Water Quality, which policed pollution, became a special target.

Legislators this year dissolved the division, rolling water-quality staff into the Division of Water Resources. The combined divisions are expected to lose 15 percent of their staff.

Lawmakers in 2011 ordered the N.C. Department of Environment and Natural Resources, which includes the division, to cooperate with communities in applying for federal permits for reservoirs.

The law says nothing about state regulators bypassing their own environmental reviews. Although it ultimately did not apply to Cleveland County, the water district cited the new law in asking state regulators to expedite the certification.

“You’ve got a new administration … and this administration is in favor of building reservoirs,” said Clyde “Butch” Smith, the district’s manager.

“We’re tickled to death.”

Smith, who also serves on the state Environmental Management Commission, said the district has been desperate for new water sources since a 2002 drought dried up the First Broad River, which supplies it, so badly that “catfish were getting sunburned.” The reservoir would dam the First Broad.

Emails to state officials show Cleveland County believed the reservoir would also increase recreation and economic development.

Application lacking

Reeder said politics played no part in his decision to waive the certificate. He said he doesn’t know whether the state would have granted the certificate.

A water-quality official in DENR’s Mooresville office wrote in May that the district’s application didn’t have enough detail to act on.

“I would assume, at minimum, the project should be placed on hold until the proper work has been completed and application with complete information submitted,” wrote the official, Alan Johnson. Johnson referred the Observer to the department’s public information officer.

State water-quality officials had warned in 2005 that the reservoir could degrade downstream habitat, wash sediment downstream and increase algae-producing nutrients.

“First and foremost, the state has abrogated its responsibility to ensure that water-quality standards are met in the 20-plus miles of streams in that watershed. That is the whole function and purpose of this program,” said Gerken of the Southern Environmental Law Center.

“Had they followed their usual procedures, the people in Cleveland County who use those streams and live where the lake is supposed to go would have had an opportunity to express their opinions.”

Uncertain future

The Corps of Engineers now stands between Cleveland County and its reservoir. The agency, which is charged with protecting federally protected streams and wetlands, says it is unlikely to decide the reservoir is the least environmentally damaging option.

“We believe at the Corps that the (water) board needs to be aware of all the obstacles that are out there in respect to their preferred alternative,” said project manager Jennifer Frye of the Corps’ Wilmington regulatory division.

The Corps will finish a draft environmental-impact statement – a study of alternatives to the reservoir – before rendering a tentative decision.

In a common practice, Cleveland County had hired a contractor to help on the study. When the water district filed its state application, it included the contractor’s conclusion that the reservoir was one of only two practical alternatives.

The Corps last month banned the contractor from working on the federal environmental study, saying its objectivity had been tainted.

Frye said she’d never heard of the state waiving a water-quality certificate in her 15 years in North Carolina. But the waiver won’t affect the Corps, she added, because the federal study will independently evaluate water-quality impacts.

Smith said he believes the Corps is “trying to scare us and run us off.”

He said the water district’s 57,000 customers will ultimately be allowed to vote on whether to build the reservoir, which he estimates will cost $80 million to $100 million.

And if the Corps denies a permit, he said, the district’s board will decide whether to appeal the decision in court.

Henderson: 704-358-5051 Twitter: @bhender
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