Maui County Loses Appeal In Case Involving Waste-To-Energy Project
The court found that the county should have done the environmental review of Anaergia Services’ proposed sludge-drying facility.
Maui County should not have let a private company write a legally required environmental study for an experimental wastewater project the business planned to build in Central Maui, the Intermediate Court of Appeals has ruled.
By allowing Anaergia Services to prepare the environmental impact statement itself instead of county employees doing it, the county violated the Hawaii Environmental Protection Act, the court said in its ruling.
The dispute dates back to March 2016, according to the May 31 court decision. That鈥檚 when the county, during the administration of Mayor Alan Arakawa, issued a request for proposals for the design, construction and operation of a gas turbine system that would dry sludge at the Wailuku-Kahului wastewater reclamation plant.
The county wanted to replace existing fossil-fuel generated electricity with locally sourced, renewable energy, meet the plant鈥檚 power needs and reduce costs associated with managing sludge, the solids that are left over after sewage is treated.
Anaergia got the waste-to-energy contract in May 2016 and formed a subsidiary called Maui All Natural Alternative to do the work.
The county and MANA penned a service agreement in February 2017 that laid out the terms, including the supply of firm, renewable energy for the wastewater treatment plant and a 鈥渄rying service鈥 for all county-generated sludge.
The company would have installed an anaerobic digester to turn energy crops 鈥 plants like sunflowers and sugarcane grown on former plantation lands 鈥 into biogas and used to fuel a combined heat and power engine for electrical power generation.
That type of industrial activity triggered the need for an , a fact neither the plaintiffs nor the defendants disputed.
The county decided that the applicant, rather than its staff, could prepare the environmental review. MANA submitted its final EIS on March 12, 2018.
Two months later, and Sierra Club’s Maui Group sued after having filed a number of objections during the draft EIS review process.
The environmental groups contended that the county violated the law by processing the EIS as an 鈥渁pplicant action鈥 rather than an 鈥渁gency action.鈥
An applicant action entails a narrower review process while an agency action involves more robust and thorough scrutiny and detail.
Wastewater and sewage management are traditional government functions and a private sludge-drying operation shouldn鈥檛 be allowed to write the EIS, a government document that outlines the impact a particular activity can have on the environment, the plaintiffs argued.
The Circuit Court agreed. In granting summary judgment on April 30, 2019, the court concluded that the project amounted to an agency action because it involved both use of county land and disposal of sludge generated from wastewater management, a government function being sourced to a private entity.
The county appealed the decision. But in its , the appeals court found that the plain language of the law spells out that if a county government puts out an RFP for a project, that鈥檚 an agency action, and in this case, Maui County was responsible for handling the EIS.
Maui’s Department of Corporation Counsel did not respond to a request for comment. Nor did Mayor Richard Bissen’s communications office.
“We are continuing to assess the ruling and have nothing to add at this point,” according to a statement from Anaergia’s investor relations department.
In a recent press release, Maui Tomorrow and noted Anaergia was the sole bidder that responded to the county鈥檚 RFP.
The groups also noted the Maui Department of Environmental Management at the time was run by Stewart Stant, who is currently serving a sentence for honest services wire fraud.
Stant admitted to taking over $2 million in bribes during the time he ran DEM, from 2015 to 2018. The bribes were in exchange for nearly $20 million in no-bid contracts steered to Milton Choi, an Oahu-based wastewater contractor, who is serving a three-and-a-half-year sentence. Stant has also been ordered to pay a $1.9 million judgment.
Attorney Lance Collins, who represented the plaintiffs, said the Anaergia RFP was drafted in a way that only Anaergia could submit a bid.
“Our lawsuit challenged a wholesale disregard of good government laws,” he said.
Civil Beat鈥檚 coverage of Maui County is supported in part by a grant from the Nuestro Futuro Foundation.
Civil Beat鈥檚 coverage of environmental issues on Maui is supported by grants from the Center for Disaster Philanthropy and the Hawaii Wildfires Recovery Fund, the Knight Foundation and the Doris Duke Foundation.
