HomeMy WebLinkAboutCOM 0059.006 1996-1998 ISAAC DAVIS HA<_L
ATTORNEY AT LAW
OF COUNSEL 2001 WELLS STREET L RECEIVED `1y~~~.,^
G. RICHARD GESCH WAILUKU, MAUI, HAWAII 96793 •3L ~h AFr
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(eoe) 244-9011 Date._._._LT-_r~-_a~.
F•Ax (aoa) z44-ans County Coundl
Letter of Transmittal
To: Hon. James Arakaki, Chairperson and Date: 2/18/97
Honorable Members, Hawaii County Council
Re: Bill No. 14
We enclose the following:
Copies Description
Hard copy of letter already faxed to you on Feb. 18, 1997
For your information and files For recordation
For signature and return Per your request
For signature and forwarding Per our conversation
For review and comment Return file-marked, recorded
For review and follow-up action copies
Review, sign and file in court See remarks below
For distribution Furnish us with _ copies
For your approval See notary instructions
For filing Please call or write if you have
any questions
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02/18/1997 10:27 808-244-6775 ISAAC HALL,ATTORNEV PAGE ~01
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FACSIMILE TRANSMITTAL
DATE: 2/18/97
TO: Hon. James Arakaki, Chairperson
and Honorable Members, Hawaii County Council
FAX NO.: 969-3291
PAGES: ~ (including this cover sheet)
RE: Sill [~o. 14 (Second Reading)
REMARKS: Attached is the testimony of the Geothermal Asset
Fund Rules Committee, by its attorney, Isaac Hall.
Please make the necessary copies for the hearing.
The original of the letter will follow today, by mail.
IMPORTANT NOTICE
This Fax has been sent from a law fum. It may contain attorney-client privileged and
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this transnnission. If you have received this Fax in error, please norify us by collect telephone
call and return it by Urst class mail. Thank you.
Original letter (x) will wlll not be mailed to you.
If you do not receive all the pages please telephone or fax us immediately.
Thank you.
ISAAC DAVIS HALL
ATTORNEY AT LAW
OF COONSEC 20B> WELLS STREET
G. RICHARD GESCH WAILU KU, MAUI, HAWAII 96793
(808 244-90V
FAX ~805~244-6775
February 18, 1997
Hon. James Arakaki, Chairperson
and Honorable Members
Hawaii County Council
25 Aupuni Street
Hilo, Hawaii 96720
Re: Bill No. 14
(Second Reading)
Dear Chairperson and Members:
I represent the Geothermal Asset Fund Rules Committee (GAFRC),
an organization consisting of residents elected by the community to be
involved with County officials in the formation and implementation of the
geothermal impact mitigation asset fund (GAF) established by Condition 51 of
the Geothermal Resources Permit (GRP-2) issued to Puna Geothermal
Venture (PGV) by the Hawaii County Planning Commission on October 3,
1989.
GAFRC and county officials met on a weekly basis from June to
September of 1994 to draft GAF administrative rules. GAFRC was the
recipient of $10,000 paid by PGV pursuant to mediation agreements, as
incorporated in Condition 50 of GRP-2, to fund community involvement in
forming and implementing the legally required impact mitigation asset fund.
This letter opposes the use of Geothermal Royalty funds to support a
separate geothermal mitigation procedure. Mayor Stephen K. Yamashiro, an
advocate for PGV, wishes to use the County's Geothermal Royalty funds in a
separate Geothermal Relocation Fund (GRF) that would buy-out and relocate
residents near PGV's plant. Bill No. 14, now before you on its second reading,
proposes to appropriate the $496,192 that has been received from the State as
the County's share of Geothermal Royalties to the Mayor's GRF for relocation
buy-outs.
Appropriating Geothermal Royalties to the Mayor's GRF for
relocation buy-outs is objectionable for several reasons. First, the Mayor's
GRF was created outside of the geothermal regulatory framework as a
political tool to silence community complaints about PGV. Second, the
geothermal regulatory framework that created and funded the GAF as part of
GRP-2 as the legitimate venue for impact mitigation is legally oriented not
towards the silencing of political opposition but toward impact mitigation, as
required by Hawaii Revised Statutes (HRS) X205-5.1 (governing issuance of
geothermal resource permits, such as GRP-2.) Third, in the context of using
a political tool instead of mitigating adverse impacts, the Mayor's GRF places
the County of Hawaii in a position of substantial liability for harm to the
community that maybe caused by PGV. Fourth, as contemplated by the law
that created the geothermal regulatory framework, PGV itself should be paying
for impact mitigation measures, not the County.
The Planning Commission issued GRP-2 to PGV with at least two
legally required expectations: (I) that PGV would not cause substantial
adverse impacts to the community, and (2) that those impacts could be
reasonably mitigated. HRS §205-5.1 allows a county planning commission to
issue a geothermal resource permit only if it is shown that there would not be
"unreasonable adverse health, environmental, or socio-economic effects on
residents or surrounding property" and that "there are reasonable measures
available to mitigate the unreasonable adverse effects..." In other words,
state law prohibits geothermal development where there would be adverse
impacts that cannot be mitigated.
GRP-2 contains several conditions addressing the statutory
prerequisites of HRS §205-5.1, including Condition 29 (requiring PGV to bear
all evacuation costs in the event of an emergency), Condition 38 (requiring
PGV to maintain comprehensive liability insurance for the project's operation)
and Condition 51 (that establishes and requires PGV and the State to
contribute funds for the geothermal impact mitigation asset fund, or GAF.)
The asset fund (GAF) that was required by Condition 51 of GRP-2 is
now available for impact mitigation using contributions paid by PGV and the
State in a sum that exceeds the appropriation amount proposed by Bill No.
14 for the GRF. The pending claims against the GAF already total more than
five million dollars.
The history of PGV shows substantial adverse impacts in Puna. The
lopsided ratio of the amount of claims to the amount in the mitigation asset
fund illustrates the problem. Adverse impacts from geothermal development
have been worse than the Planning Commission expected when it issued
GRP-2.
HRS X182-18 requires PGV to pay the State royalties for the
utilization of the public's geothermal resources. The State in turn has given
Hawaii County to date the total of $496,192 that Bill No. 14 proposes to
place in the Mayor's GRF.
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In 1989, when PGV's application for a geothermal resource permit
was being considered, it was contemplated that geothermal royalties would
supplement the GAF required by Condition 51 as an impact mitigation
measure in compliance with HRS X205-5.1.
This attempt to use Geothermal Royalties for the Mayor's GRF is
simply another in a long series of disappointments for a community that once
felt it could rely on government to protect its environmental well-being.
GAFRC was compelled to sue Mayor Yamashiro and the County
because of the administration's refusal to provide GAFRC, as the
community's chosen representatives, with the $10,000 paid by PGV pursuant
to mediation agreements and GRP-2 to enable community involvement in the
formation and implementation of GAF rules. GAFRC was required to use up
part of the $10,000 just to get it, and even then the money set aside for
community participation in the GAF rulemaking was withheld until after the
work of drafting the rules was finished.
Community input in the rulemaking process for the GAF was
essentially ignored in the final GAF rules as promulgated by the Planning
Commission. Most of the community recommendations were not
implemented when the final rules were adopted.
To date, no activity has been seen in an effort to apply the GAF to its
intended purpose of mitigating PGV impacts. In other words, more than eight
years after GRP-2 was issued, there have been no community impact
mitigation payments from the GAF.
An important and real issue is not on your agenda. That important
item is the big picture of geothermal development, PGV in particular. PGV
has had continual problems in operating its geothermal plant, from blowouts
requiring community evacuations to continual low level toxic emissions and
maintenance problems. The Council needs to see more details of the big
picture if it wants to responsibly consider the question presented by Bill No.
14. In fact, the Council should look at the big picture with minds open to the
need for remedial action and policy making.
For example, on July 12, 1994, Deputy Corporation Counsel
Frederick Giannini wrote a memorandum to GAFRC with regard to PGV's
liability insurance, stating that maybe PGV's liability coverage should be
increased and also saying that under PGV's permit condition 29, evacuation
costs for PGV emergencies should be repaid by the developer. These are
matters pertaining to the County's fiscal responsibility and liability. Yet to
date we are not aware of any steps having been taken to require PGV to meet
its genuine liability insurance obligation or to require PGV to repay
government evacuation costs for past PGV emergencies.
As you may know, many residents of the Puna community feel that
they have been the victims of geothermal development. The State's HGP-A
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plant operated for years with continual leaks and open ventings of toxic
hydrogen sulfide gas (H2S). PGV operates on an adjacent site and has proven
beyond any doubt its potential to disrupt and harm the community. Dr.
Marvin Legator, Director of the Division of Environmental Toxicity in the
Department of Preventative Medicine and Community Health at the
University of Texas Medical Branch in Galveston, Texas, conducted a
preliminary health study in Puna last year that found evidence of potential
toxic impacts from low level geothermal emissions. As a result he is
continuing his study of Puna community health impacts and will publish his
report in a national scientific journal.
The history of geothermal development shows that the past points of
view expressed by community members in objecting to the continuation of
geothermal development have been well-founded and accurate. Puna
residents have lived with the reality of health impacts, major disasters and
nuisance. Their complaints have been well-founded, albeit annoying to
geothermal advocates.
Mayor Yamashiro's advocacy of geothermal development, with PGV in
particular, indicates that he is one of those likely to be offended by
community's complaints about geothermal impacts. So when Mayor
Yamashiro established his GRF, outside of the legal regulatory structure, it
was (and still is) perceived by many Puna residents as a political tool to move
out those residents complaining about PGV. That is not what HRS §205-5.1
refers to when it requires impact mitigation. The problem is not that the
residents are complaining, the problem is the adverse impacts that the
residents are complaining about.
The reality of geothermal development has gotten to the point where
even PGV's most confirmed proponents should admit to serious past and
present problems. Community victims have shown patience, even in their
most aggressive demonstrations against geothermal. They also have acquired
detailed knowledge of the problems, from personal experience and from
technical study. If the County gets into the business of buying and then
reselling or renting out the homes of residents near PGV, it should be aware
of and prepared for substantial potential liability.
County administrations have for political reasons not yet responded
to geothermal development problems in a manner that is calculated to end
the adverse impacts. Community harm is still likely being caused by toxic
exposure from PGV. The real risk of further emergency situations at PGV is
an on-going threat. A major upset condition at PGV, such as has been
experienced in the past, could result from corrosion exceeding PGV's
maintenance activity and has the potential to cause serious injury and loss of
life in the Puna community. Continual low level emissions.of H2S seem to be
a regular occurrence in the experience of many members of the Puna
community. The adverse impacts of chronic low level H2S exposure will soon
4
be reported by Dr. Legator in national scientific literature. What the
scientific community is about to recognize has been a life experience in Puna.
The first priority for the distribution of money from the geothermal
asset fund (GAF) created in compliance with HRS §205-5.1 is described by
Condition 51 of GRP-2 as the "temporary or permanent relocation of those
property owners who are found, in accordance with criteria established in the
rules, to be adversely impacted by the activities authorized" by GRP-2.
The Mayor's GRF directly duplicates the relocation purpose that was
explicitly provided for in establishing the GAF as a PGV permit requirement.
Why does the Mayor wish to co-opt the idea of relocation, placing his GRF
outside of the legal geothermal regulatory framework? The existing GAF, if it
would be used, is apart of the requirements of State law and County
regulations and the permit that govern PGV activities.
The geothermal impact mitigation asset fund required by Condition
51 of GRP-2 needs more contributions to make the fund viable. The State
made one contribution, then stopped (although its representations to the
Planning Commission were that State contributions would be on-going.)
Instead of looking at an appropriation for a separate fund to use Geothermal
Royalties, the Council should look at ways to increase the amount of funds
for intended mitigation purposes established within the legal regulatory
framework that has allowed PGV to operate.
PGV is required by condition 29 of GRP-2 to pay emergency
evacuation costs, yet substantial emergency response costs of State, County
and private agencies related PGV's blowout have not been repaid by PGV. In
other words, the taxpayers and private agencies are subsidizing PGV's
failures, contrary to the terms of the permit. Condition 51 of GRP-2
contemplates payments from PGV sufficient to pay the costs of mitigating
adverse impacts. Why is PGV not being required to pay the funds really
necessary to accomplish impact mitigation? Why, instead, does the Mayor's
GRP use funds from the County's share of Geothermal Royalties in an
apparent effort to silence PGV's opponents (rather than address the
underlying problems)?
The Mayor's GRP is designed to permanently relocate PGV's present
neighbors by purchasing their property and then selling or renting that same
property, replacing the former complaining residents with new landowners or
tenants (perhaps with a gag provision to prevent the new residents from
expressing their concerns, once they have experienced the problems.)
HRS Chapter 508D requires that a seller of real property, and the
seller's agents, must in good faith and with due care investigate, research and
disclose to a prospective purchaser of the property all material facts and
information about conditions that may affect the value of the property. A
seller neglecting the disclosure requirements may be liable for a buyer's
resulting actual damages.
5
This letter and a multitude of additional information about the risks
of living near PGV should be a part of the County's disclosure statement to
any potential buyers of property obtained and disposed of under the Mayor's
relocation fund.
This illustrates the lack of wisdom associated with an effort to cover
over instead of resolve the underlying problems. As long as PGV operates in a
manner where adverse impacts require mitigation, a risk to the community
will be acknowledged as part of that activity. State law requires impact
mitigation measures. GRP-2 established an impact mitigation fund to obtain
mitigation measures that are required by State law. Mitigation does not
mean concealing, it means resolving or diminishing. The County does not
diminish PGV's adverse impacts by replacing complaining neighbors with new
residents. PGV is required to pay the costs of mitigating adverse impacts.
Why not really do it?
Bill No. 14's proposed appropriation of the Geothermal Royalties to
the Mayor's GRF for relocation buy-outs should not be enacted. The GRF
exists outside of the geothermal regulatory framework as a political tool to
silence community complaints about PGV. The geothermal regulatory
framework that created and funded the GAF as part of GRP-2 is the only
legitimate venue for impact mitigation. The GAF is legally part of impact
mitigation required by HRS X205-5.1.
The use of a separate political tool instead of actually mitigating
adverse impacts would place the County of Hawaii in a position of
substantial liability for harm to community residents that may be caused by
PGV. The law and the permit that regulate geothermal development
anticipated that PGV would be paying for impact mitigation measures. Mayor
Yamashiro seems willing to shift that burden away from PGV to the County.
The Council should not go along with that approach to PGV's problems.
Thank you for considering these comments.
S cerely,
~ l~
aac Hall
~ttorney for GAFRC
6