Board Talk: Water Permits For A&B, KIUC, and Others

posted in: Board Talk, November 2019 | 0

(This article has been corrected. Land Board member Chris Yuen did not add a condition requiring a sublessee establishing an annual crop to harvest it before the permit expires. Rather, he required Mahi Pono to inform any lessees that rely on irrigation water from the RP that the availability of water is based on a month-to-month permit that ends in a year.)  

On June 18, the Intermediate Court of Appeals vacated a Circuit Court decision invalidating revocable permits that the Land Board had granted to Alexander & Baldwin and its subsidiary, East Maui Irrigation Co. Ltd. The year-to-year permits allowed for the continued diversion of stream water from East Maui to Central and Upcountry Maui.

The Native Hawaiian Legal Corporation (NHLC), which represents the plaintiffs in the case, has asked the state Supreme Court to review the ICA’s decision. In the meantime, the holdover water use permits issued by the Land Board under Act 126 of the 2016 Legislature to A&B, EMI, and others diverting water from state land are set to expire at the end of the year.

Although the Legislature did not extend Act 126’s sunset date beyond 2019, the ICA decision allowed the Land Board to continue the water permits to those who are still in the process of obtaining a long-term water lease.

On October 11, the DLNR’s Land Division recommended that the Land Board continue A&B/EMI’s permits, so long as their diversions were capped at a monthly average of 35 million gallons a day. The division arrived at that number by averaging their highest monthly diversions from January 2017 to April 2019, and rounding up.

A representative of Mahi Pono, which co-owns EMI and seeks to expand farming on the agricultural lands in Central Maui it bought from A&B, told the board that 35 mgd would not be nearly enough for the coming year.

Mahi Pono operations manager Grant Nakama said the company plans to plant more than 4,000 acres of food crops next year and maintain 12,000 acres of pasture. To meet its needs, as well as those of the Maui Department of Water Supply, it would need an annual average of 45 mgd, he said.

Alexander & Baldwin vice president Meredith Ching (left) and Mahi Pono operations manager Grant Nakama (right).

The company plans to invest $20 million into more efficient irrigation and $60 million to ramp up farming operations, he said.

“We’ll enter the year already using 34 mgd,” he said.

Upcountry Maui resident Andy Ho testified in support of the permits, especially in light of the recent wildfires on the island. “We need some kind of agriculture in the central plain. It’s too much acres in a big dustbowl,” he said.

Huelo resident and Sierra Club member Lucienne De Naie, however, questioned Mahi Pono’s claimed water needs, which she called “very slippy-slidey.” Reserving 5 mgd for the county’s needs, 40 mgd would be left for Mahi Pono. “It’s like 10,000 gallons per acre [per day],” she said. She noted that none of the crops proposed in the recently released draft environmental impact statement for A&B’s long-term lease would require that much water, and that it was unclear how much well water would be used.

“Twenty-nine percent of their [A&B’s] water used to come from the wells. … Where are all these numbers heading? No one wants to stop agriculture, but we see the same stories come up year after year. … During the last four years, there’s not been enough water in the summer months [in the streams] even without giving any to DWS,” she said.

Marti Townsend, executive director of the Sierra Club of Hawai‘i, said she appreciated that the Land Division tried to establish a cap on the diversions, but thought even 35 mgd was too much. “This is not an opportunity to, slow by slow, ratchet up without doing any environmental review,” she said.

She added that Mahi Pono should be limited to about 26 mgd and grow whatever it can with that amount of water. “They should not be allowed to use this water for flushing toilets, making concrete. One mgd goes toward industrial uses,” she said of Mahi Pono’s past uses for the water.

NHLC attorney Alan Murakami was also alarmed by Mahi Pono’s claimed water need of 54 mgd at the end of its next growing cycle. He said a typical truck crop requires only 2,500 gallons per acre per day. More details on what the water will be used for seemed like a minimal thing to ask of a private, commercial operator, he argued.

The Hawai‘i Supreme Court decision in the Ka Pa‘akai case, which sets forth how agencies must assess and mitigate potential impacts of their actions on traditional and customary Hawaiian practices, requires the Land Board to get more precise information on Mahi Pono’s water use, he argued. While the board still had two more months to get that information before the current permit expired, he said he wasn’t sure whether that was enough time.

Seeking the restoration of streams in East Maui, the NHLC’s clients initiated a contested case hearing on A&B’s proposed long-term lease in 2001, as well as the more recent challenge to the Land Board’s annual renewal of revocable permits for the company’s water diversions. “When the RP lasts longer than the leases that it’s replaced, there’s something wrong with that,” he lamented.

“I’ve had two clients pass on [during the course of this process]. I might sound a little strident saying these permits should not be granted [but] it has to be done right and not justified with some kind of post hoc rationalization that these laws can be ignored,” he said.

“We’ve been before you 18 years already asking for the same thing. Exactly the same thing. I’m just asking that you do the right thing,” he said.

As it did last year, the Sierra Club asked for a contested case hearing on the permits’ impacts on its members, and after an executive session, the Land Board voted to deny it.

Townsend and De Naie have repeatedly pointed out that the board has failed to determine whether enough water will remain in the dozen or so diverted streams that have not had their interim instream flow standards amended recently by the Commission on Water Resource Management. (Having been rejected last year, the Sierra Club sued in 1st Circuit Court to overturn the permits approved in 2018. A trial has been scheduled for next May.)

Under the terms of Mahi Pono’s purchase of A&B’s lands in Central Maui, if Mahi Pono is unable to secure enough water to fulfill its plans, A&B must reimburse the company some of what it had paid for the land.

Yuen increased the cap from a monthly average of 36 mgd to an annual average of 45 mgd. He noted that the interim instream flow standards of 27 of the streams diverted by the EMI system left 93 mgd available for offstream use.

“The Land Board can decide to allow the taking of only half of what’s available. … I’d like to see them expand,” he said. He added another condition to his motion: that Mahi Pono inform any lessees that rely on irrigation water from the RP that the availability of water is based on a month-to-month permit that ends in a year.  For orchards, in particular, he said, there is no guarantee of water in the long term.

With additional amendments recommended by board member Stanley Roehrig to require Mahi Pono to clean trash or other remnants of sugar plantation use of the stream areas, the board approved the permit. Maui board member Jimmy Gomes recused from voting.


In addition to the permits to A&B and EMI, the Land Division recommended the continuation of permits held by the Kaua‘i Island Utility Cooperative and the Hawai‘i Electric Light Co. for hydroelectric power generation purposes, a permit to Kaua‘i resident Jeffrey Linder, and four permits to farmers and ranchers in the Ka‘u district of Hawai‘i island. The board approved all of the permits, as well as a new permit to Ka‘u Mahi, LLC, which provides water to farmers in Ka‘u.

The KIUC permit garnered some criticism from Earthjustice attorney Leina‘ala Ley. KIUC president David Bissell had testified that the utility has been providing at least the minimum amount of water in the streams as required by the Land Board last year. Even then, he noted, there are times when about 100 feet of Wai‘ale‘ale Stream is dry.

He added that in the past year, there was a leak in a concrete flume feeding KIUC’s upper hydropower plant, a large albizia tree fell on an irrigation ditch and broke a metal pipe siphon, and a large landslide made things difficult to repair. “It’s kind of an indication of how much work goes into keeping these systems in use,” he said.

Ley argued that the amount of water KIUC was releasing into the streams was less than what is needed for mauka to makai flows. She added that KIUC admits to losing 2.6 mgd in system losses. “They brought up again today there were larger breaks. Some clients took pictures of water

pouring out of the system,” she said before recommending that the board set some kind of standards for best practices.

She asked that the board require that KIUC provide a report on what’s been done to mitigate system losses, install gauges on the smaller diverted streams, and complete an investigation by a certain deadline as to how to reconfigure the diversions to take high flows rather than low flows.

She also asked for an emergency plan to shut the diversions down in a disaster so that water isn’t wasted.

“I think there’s a lot of room for the board to set the bar higher,” she said. The board did not adopt any of her recommendations.

To Ley’s assertion that KIUC was not releasing enough water to establish continuous flow throughout Wai‘ale‘ale Stream, board member Chris Yuen noted that it’s a gaining stream. “If there’s no water in it [even with KIUC’s releases], it’s because there’s not going to be any water in it,” he said.

East Kaua‘i

The East Kaua‘i Water Users’ Cooperative asked that its permit not be continued because it can’t afford to maintain the old sugar plantation irrigation system it draws water from, nor can it afford some of the costs associated with securing a long-term water lease.

“Hopefully, another entity can assume management of the system,” land agent Ian Hirokawa told the board. Otherwise, the Land Division will shut it down, he said. According to his division’s report to the board, that would include the removal of the Wailua and Upper Kapahi reservoirs.

The report explains that the co-op had supported a bill in the last legislative session that would have given the state Department of Agriculture authority over the irrigation system, as well as staff and funding to manage it. When the bill failed, the co-op decided to bow out.

“The Land Division doesn’t have the expertise to be a water provider [and] there’s no way the system can operate without a subsidy,” Hirokawa told the board.

Kaua‘i board member Tommy Oi, however, argued that the division shouldn’t even be thinking about closing the system down if the state wants to pursue agriculture in the future.

Board member Chris Yuen agreed. “If we were to close the system, that would be tragic,” he said.

Hirokawa said that hopefully, during the next legislative session, the Department of Agriculture will get the resources it needs to take the system over. “No one wants to shut it down [but] I don’t see how DLNR can substitute as an operator,” he said.

To this, Yuen asked what’s the worst that would happen if the division just let the water run through the system.

Board chair Suzanne Case explained that just letting the water be diverted with no end users could be considered waste.

“We all share the concern about not letting this investment deteriorate. We had that problem in Hamakua [on Hawai‘i island]. It’s a big problem. There’s no urgency of use and so that’s the challenge,” she said.

In the case of East Kaua‘i, it’s a big system that’s expensive to operate and not much is being farmed, she said.

Watershed Management Plans

Under state law, water lease holders must complete a watershed management plan, which can be an expensive undertaking. To ease the burden on some of the smaller water users seeking a lease, the Land Board earlier this year asked the Land Division to set minimum standards for the plans and to investigate to what extent existing plans might suffice.

“There are many existing mauka watershed plans, including those implemented by the State’s Division of Forestry and Wildlife (DOFAW) and groups like the Watershed Partnerships. Some water lease applicants also have their own watershed management plans. Unfortunately, existing watershed plans are not always directly correlated to the water lease area and some plans are old and outdated. In certain places, new threats to watershed health (e.g. Rapid ‘Ohi’a Death) are not addressed in existing watershed plans. Furthermore, estimated budgets may not reflect the current cost of management if the plan is over five years old,” a division report states.

Even so, it concluded that a 2012 Ka’u Forest Reserve Management Plan prepared by DOFAW meets the minimum content requirements. “Therefore, that plan will be utilized to the greatest extent possible, and the department will work with the Ka’u lessees to determine how to implement on an equitable basis,” the report states.

Yuen asked DOFAW planner Katie Ersback whether KIUC’s environmental assessment for its proposed lease or A&B’s draft EIS would suffice as watershed management plans. She said her division had not yet reviewed them.

Teresa Dawson

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