Cost of Corrective Actions Could Drive Owners to Tear Down Dams

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Some of them leak like sieves, losing (or wasting, some might say) millions of gallons a day of diverted stream water into the ground. But achieving greater food security without the 130 or so earthen reservoirs throughout the state would, in many people’s eyes, be nigh impossible.

More than half of the state’s gross farm revenue comes from reservoir-dependent enterprises, according to a September 2010 report by the U.S. Department of Agriculture. And should the owners of the 113 “high-risk” reservoirs identified by the Department of Land and Natural Resources choose to dismantle them rather than bear improvement and maintenance expenses, the state would lose $242 million in annual revenues, the report states. What’s more, 7,234 jobs would be lost, including 5,589 farm jobs.

The report, prepared for the state Department of Agriculture and submitted to the 2011 Legislature, points out that the projected losses are based on an unlikely worst-case scenario in which all of the reservoirs are lost at once.

But a large-scale abandonment of reservoirs could happen if Governor Neil Abercrombie signs the administrative rules approved by the state Board of Land and Natural Resources one year ago. 

The rules, driven by the Dam and Reservoir Safety Act of 2007 (itself spurred by the fatal breach in 2006 of Ka Loko reservoir on Kaua`i), impose new fees and standards on dam owners. The fees are intended to help pay for the state’s dam safety program, which, after scaling back inspections, came under heavy criticism following the Ka Loko breach.

“Since 2009, just three years after the Ka Loko disaster, the Legislature eliminated all general funds previously appropriated for the dam safety program. Therefore … fees are needed to support the program. The department is unable to effectively perform the duties and meet the obligations mandated by law without these fees,” a report from the DLNR’s Engineering Division states.

Also under the new rules, all high-hazard dams must be capable of withstanding a probably maximum flood (PMF), which is the flood that “may be expected from the most severe combination of critical meteorologic and hydrologic conditions that are reasonably possible in the region.” 

The potential penalty for not meeting the DLNR’s standards: $25,000 per offense.

In addition to the rules, the DLNR had recently assessed all regulated dams and reservoirs in the state and recommended safety actions for each owner, including geotechnical/stability studies, hydraulic/hydrology studies, upstream control valve studies, spillway improvements, and other things.

Many landowners with multiple reservoirs have said that the mounting cost to meet the DLNR’s safety standards is simply too much. 

“The additional costs required to meet dam and reservoir safety regulatory requirements may create an undue financial burden for dam and reservoir owners,” according to Paul Oshiro, government relations manager for Alexander & Baldwin, Inc., which owns 18 regulated reservoirs on Kaua`i and 30 on Maui. (Regulated dams are those that are at least 25 feet tall or have an impounding capacity of 50 acre feet or more. Dams less than 6 feet in height, regardless of storage capacity, or that have a storage capacity not in excess of 15 acre feet regardless of height, generally do not fall under state’s jurisdiction.)

“Smaller farmers and agricultural operations who utilize water from dams owned by others may be negatively impacted should the dam owner decide to permanently breach their facilities because of the undue increase in operating and capital expenses prompted by regulatory expenses and requirements of DLNR’s dam and reservoir safety program. Owners of multiple dams will be particularly hard hit,” Oshiro stated in testimony earlier this year on Senate Bill 1393. The bill, which failed to pass, would have allowed reservoirs and dams to be included as important agricultural lands so landowners could use the related tax credits to remediate dams as directed by the DLNR.

Monsanto’s Alan Takemoto also testified, “We can’t afford not to maintain our dams and reservoirs, especially when we are trying to move towards food sustainability. … By providing dam owners with a financial incentive to meet additional dam regulations, the dam owners will be encouraged to keep their dams operating efficiently and safely.”

Even with the rules in limbo, some landowners, including the DLNR, have opted to either dismantle their dams or alter them so that they are no longer regulated.

Between August 2009 and this past July, the Land Board approved dam removal or alteration permits for more than a dozen reservoirs, most of them entirely or partially owned by the DLNR.

Based on DLNR staff reports for those permits, at least 343 million gallons in storage capacity has been or will be lost. The removal of the privately owned, 160-million-gallon Pu`u Ka Ele reservoir on Kaua`i accounts for most of that loss.

Recognizing the potential impact the new rules might have, “the governor is holding onto the rules,” says William Tam, the DLNR’s deputy director for water. “A number of landowners looked at decommissioning rather than fixing.” 

Eventually, the governor will sign the rules, but he’s waiting for the DLNR to prepare materials to help dam owners navigate them once they become effective, Tam says. “It’s taken time to work it out,” he adds. 

In the meantime, the state Agribusiness Development Corporation has stepped in to save at least one of the DLNR-owned dams slated for downsizing, providing remediation assistance for the 71 million gallon A`ahoaka reservoir in east Kaua`i.

Teresa Dawson

Volume 22, Number 5 — November 2011

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