Water-sewer company sues town of Lexington, DHEC over sewage treatment plant issues

A private utility that serves swaths of the Midlands is pointing its finger at the town of Lexington in a lawsuit over the fate of an aged wastewater treatment facility on Lake Murray.

Blue Granite Water Co. filed a lawsuit in state circuit court last week against the town, the state Department of Health and Environmental Control and the Central Midlands Council of Governments to “end years of delay in achieving a legally required” connection of the Watergate plant near Spence’s Point.

This latest legal showdown between the town and Blue Granite — formerly known as Carolina Water Service — follows a September trial over a separate wastewater plant, the I-20 treatment facility, which the town condemned in 2018 after years of complaints about it. In that case, the town and Blue Granite argued about how much the town would have to pay, and Blue Granite was awarded $7.25 million, plus interest, for the plant.

Watergate is one of four remaining plants — Woodlands, Alpine and Synergy are the others — that still discharge into the Saluda River. It is the third in the trio of Blue Granite Saluda River plants the company has recently tried to bring into compliance with a decades-old regional water management plan.

Two other Blue Granite plants, I-20 and Friarsgate, were connected with other systems within the past two years in order to eliminate discharge into the Saluda River. The town of Lexington’s Coventry Woods plant was also connected. Now, it is Watergate’s turn.

“We want to see the elimination of the Watergate discharge, and eventually all of the domestic wastewater discharges into the Lower Saluda River, and we hope Blue Granite Water (Carolina Water Service) and the Town of Lexington will work to make that happen,” said Bill Stangler of the Congaree Riverkeeper organization.

Stangler is one of many environmentalists and regulators who have pushed utilities to stop discharge into the Lower Saluda River, which is a state-designated scenic river. But issues with connecting wastewater treatment facilities to regional systems go back decades.

The Watergate conundrum began more than 20 years ago, when the Central Midlands Council of Governments amended its regional water quality management plan to meet Section 208 of the Federal Clean Water Act, which was passed in 1972 and pushed for the regionalization of water and sewer systems.

The local 208 plan required that the discharge of treated sewage from Watergate be eliminated by connecting it with the town of Lexington, which would then forward the sewage to Cayce for treatment. The plan, when fully implemented, will move wastewater discharge from the scenic Saluda River favored by swimmers and kayakers to the Congaree River.

In the late 1990s, the town of Lexington became the designated management agency for the 208 plan for the Midlands, but the town consistently failed to meet its responsibilities, according to the Blue Granite lawsuit.

“The town’s failure to connect the Watergate system (or even commit to a method or timeline for doing so) constitutes a willful violation of the requirement in the 208 plan,” the lawsuit says.

The suit lists ways in which Blue Granite thinks DHEC and the council of governments also fell short in managing Watergate, which services about 1,200 households and businesses in the area, according to Blue Granite.

In 2001, DHEC gave the company permission to discharge wastewater into Fourteen Mile Creek, a tributary of the Saluda, but with the requirement that Watergate be tied into the broader system by July 2005. In November 2009, Watergate was still not connected, the lawsuit says, and its aging infrastructure needed a long-term plan for proper management.

At that point, DHEC reissued a permit to Blue Granite acknowledging that the company could not stop discharging from Watergate “unless and until the town agrees to permit connection” to regional facilities run by the town of Lexington, the lawsuit says.

The utility company attempted to reach an agreement with the town “for years,” according to the lawsuit, but was unsuccessful.

In June 2018, former Blue Granite president Catherine Heigel made a direct request with the town to connect, but Lexington wanted to delay its decision until the court case over the I-20 plant ended, town manager Britt Poole told The State earlier this year.

The town of Lexington said in a statement that it is “aware of the false allegations made by Blue Granite, formerly known as Carolina Water Service, and has responded.,” spokesperson Laurin Barnes wrote in an emailed statement. “At this point it is a matter that will have to be taken up in court and we cannot further comment on pending litigation.”

The town did not provide additional information on its response to the the lawsuit. Lexington Mayor Steve MacDougall could not be reached for comment. The State reached out to the Lexington County Clerk of Court to obtain the town’s response, but no new filings were available as of noon Tuesday.

Blue Granite, which has had a spotty environmental record, especially in rural parts of the state, argues that because it could not connect Watergate for decades, it was unable to meet state and federal regulations.

DHEC has taken multiple enforcement actions in the form of consent orders against the company for issues at the Watergate facility. In 2002, the company was fined $4,200 because it exceeded the limit for chronic toxicity and flow. In October 2015, Blue Granite was issued a second order for violating toxicity limits. And the most recent consent order came down in September 2019, after the company improperly disposed of 15,000 gallons of sludge from Watergate. That action came with an $8,225 fine, DHEC records show.

The Congaree Riverkeeper sued Carolina Water Service in 2015 over illegal sewage discharges in the Saluda River. A judge in that case ruled in favor of the riverkeeper and in a summary judgment, ordered Carolina Water Service to pay a $1.5 million fine for violating pollution discharge limits and for failing to tie into the regional system. The two entities reached a settlement agreement in March in which Blue Granite agreed to pay out hundreds of thousands to environmental advocacy groups and the Central Midlands Council of Governments, according to a news release.

Now, Blue Granite is on the other side of things: accusing DHEC and the council of governments of acting in an “arbitrary, oppressive and capricious manner” by not forcing the town to connect to the facility, thus violating the company’s right to due process, the lawsuit says.

“As a regional planning agency with no legal authority to force action on this issue, we believe we have been improperly named in this suit,” Central Midlands Council of Governments executive director Ben Mauldin wrote in an email. “We encourage Blue Granite and the town of Lexington to work this issue out as quickly as possible and are committed to continue working with all parties to find a resolution.”

DHEC did not comment on the lawsuit because it is pending litigation, according to a spokesperson.

Blue Granite is asking the court to take one of a few actions: Remove the requirement to connect Watergate and have DHEC issue a new permit allowing the company to discharge wastewater in the waterway; force the town to connect; or allow Blue Granite to build a new wastewater facility that can meet environmental and regulatory standards. The company is seeking declaratory judgment, preliminary and permanent injunction, attorney’s fees and costs.

Blue Granite is represented in the case against the town of Lexington by attorneys Rita Bolt Barker and Gregory J. English.

“To allow us to maintain long-term service to our customers and be protective of the environment, the town simply needs to connect our facility to the regional treatment facility — as it agreed to do 20 years ago — or step aside and allow the Central Midlands Council of Governments and S.C. DHEC to permit us to build a new plant,” Blue Granite president Don Denton said, according to a news release. “The town’s twenty-year delay must come to an end either by completing the long-awaited connection or stepping aside to allow a reasonable alternative solution.”

Separately, Blue Granite is asking the S.C. Public Service Commission that regulates utilities to approve up to a 56% rate hike for Blue Granite water and sewer customers throughout the state in 2020. The company is partly seeking to recoup money it spent on upgrading its facilities and systems, but it is also asking for a refund on attorney’s fees, according to the Office of Regulatory Staff, which advocates for consumers.