PUD joins brewery water fray

The following article appeared in the March 15, 2006 edition of The Olympian.

One of the very important things that the municipalities, and now the PUD, are not really saying out loud is that if they win, they are going to have to submit a change application to the Department of Ecology. An Ecology official has already noted that if the department does approve the change, they are not under any obligation to allow the full current water right to transfer with the change. They could significantly reduce the amount of water available to the municipalities and PUD with the changed water right.

Having spend bundles of money on lawyers, where are the cities and the PUD going to be if Ecology takes the current 12 million gallon per day water right and change it to . . . oh, say . . . two million gallons per day?

Instead of going after a water right through the eminent domain process, why aren't the municipalities and PUDs working with the legislature to change the Department of Ecology's water right administration powers so that the public entities can obtain the water rights they need for meeting their growth limits under GMA?

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PUD joins brewery water fray

By Christian Hill
The Olympian

The Thurston Public Utility District will make good on its threat to sue to acquire water from the former Miller brewery site.

The district’s three commissioners authorized its attorney Tuesday to file a condemnation petition in Thurston County Superior Court. It will be separate from the one the city of Olympia filed last month.

The cities of Lacey and Tumwater have since agreed to join Olympia’s petition. The district would join the combined petition if the cities allow it.

The PUD commissioners have been unhappy the district was left out of negotiations that led to the agreement in which the three cities will split equally any water rights secured through their court action. The district says it needs more water to serve a growing number of customers in the Tanglewilde and Thompson Place areas outside Lacey.

Elected leaders from the cities have said nice things about wanting to help the district, but that talk hasn’t translated into action, Commissioner Paul Pickett said.

“I feel like we’ve been pushed in a corner, and I feel like this is something we have to do,” he said before the unanimous vote.

The district contracts to buy water from the city of Olympia to serve about 1,200 households.

It also owns and operates smaller water systems in rural Thurston County.

The city of Olympia must provide the district at least 125 million gallons of water a year.

The district’s demand for water is projected to be 225 million gallons from June 2005 to May 2006, and is estimated to increase to 327 million gallons by 2050, according to the district.

The 20-year purchase agreement with the city states the district should make all efforts to find an alternative water source before its expiration.

Commissioners did raise concerns about the cost to the utility to argue its case but concluded it was necessary to serve their current and future customers.

“At this point, I think we have to act,” Commissioner Alan Corwin said.

Commission President Gary Cooper said he doesn’t understand why the cities oppose the district’s participation. They either have miscalculated the strength of the district’s legal position or its resolve, he added.

“In either event, there’s been a miscalculation,” he said.

Olympia City Councilman Joe Hyer, who last week said Olympia did not intend to marginalize the PUD, said Tuesday night, “I’m trying to figure out how we marginalized them. How many ways can you split 11.8 million gallons a day? If we bring the PUD in, do we bring in Yelm, the tribes? How much do they need? I haven’t seen a plan on their water needs yet.”

On Feb. 13, the Olympia City Council authorized its city attorney to begin a condemnation proceeding on the property in neighboring Tumwater. Olympia officials said they took the preemptive action to ensure the cities don’t lose rights to the water.

The former brewery closed in 2003. Miller sold it to All American Bottled Water Corp. the following year with plans to convert it into a water bottling plant. Those plans haven’t materialized in part because the corporate president, L. Eric Whetstone, hasn’t been able to secure financing for the project.

The state can force the property owner to relinquish rights to the water if it isn’t used for five years.

All American’s lawyer told the Olympia City Council last week that the company had a commitment letter for $125 million from a lender. The company will file for bankruptcy if Olympia doesn’t abandon its lawsuit, the lawyer added. As of Tuesday, All American has filed no such action, according to the federal courts online database.

On paper, the former brewery has the right to 7,420 acre-feet a year for industrial purposes, but the actual volume could be less. A one acre-foot is 325,851 gallons of water. The public utility district will ask the court for rights for 327 million gallons a year, or 1,036 acre-feet.

In the condemnation proceedings, the court will determine who would use the water “for the greatest public benefit,” according to the law.

The cities or district would be responsible for paying fair value for the water rights and any associated property they successfully condemn.