After hearing from S.C. Attorney General Henry McMaster, the board of the state’s environmental protection agency denied a permit Duke Energy needs to operate hydropower dams along the Catawba River in South Carolina.

The 4-0 vote by board members of the Department of Health and Environmental Control is a temporary setback for the North Carolina-based power company, which can appeal or renegotiate new permit terms and reapply.

But the decision is a big win for McMaster and conservation groups that had appealed a DHEC staff decision to the board.

McMaster said the decision averts a potential roadblock in a U.S. Supreme Court case he has brought against North Carolina over water rights to the Catawba River. In making that case, he took the unusual step of appearing before the DHEC board and challenging Duke, one of the Carolinas’ most influential companies.

“This is an excellent decision,” McMaster said afterward. “I thought the board members listened intently, asked a lot of questions, gave it great consideration, and they did the right thing.

“This could have been disastrous for our case in the Supreme Court.”

While McMaster’s office was not directly involved in the appeal, board members Steven Kisner and Glenn McCall said it was hard to ignore the attorney general’s arguments.

“It’s strictly a water quality issue,” Kisner said, but added that, “I’d be lying to you if I said we didn’t listen to what he had to say.”

McCall said during the hearing that South Carolina needs to ensure it maintains adequate water levels as the Catawba enters the state near Rock Hill, where he lives.

McMaster wants the U.S. Supreme Court to give South Carolina an equal share of the river water with North Carolina to prevent the Tarheel State from siphoning much of the water away before it flows south, he said.

In May, DHEC’s staff issued a water quality permit to Duke that did not require the company to maintain as much water in the river below its dams as he might be able to get through his Supreme Court case, McMaster said. He said the staff’s decision relied on flawed information supplied by Duke, a charge the company denied.

Had the permit gone forward as it is, it could have looked to the Supreme Court like South Carolina was divided in its arguments for higher river levels, McMaster said.

Whether it appeals the decision or renegotiates terms of a new permit, Duke is expected to receive permission eventually to keep running the dams between Charlotte and Congaree National Park southeast of Columbia.

Duke spokesman Andy Thompson said the company has a plan to protect the river separate from the permit application. It was developed, in part, with DHEC staff members and dozens of other government agencies and interest groups, he said.

The plan would maintain plenty of water in the Catawba-Wateree river basin below Duke’s hydropower dams, Thompson said. The agreement was reached as part of its effort to obtain a new, 50-year federal operating license for the dams at Lake Wylie, Lake Wateree and other spots.

“It is robust, meets the needs of water users up and down the Catawba-Wateree river chain,” industries and municipal users alike, Thompson said.

His company will consider appealing the board’s decision to the state Administrative Law Court, Thompson said. It has 60 days to decide.

Maintaining adequate levels in the Catawba-Wateree system is important because the river basin supplies drinking water to more than 1 million Carolinas residents, gives dozens of industries a place to discharge treated wastewater, and provides recreational opportunities for outdoors enthusiasts.

When water levels drop, pollution levels can increase because there isn’t enough water to dilute contaminants. Lower levels also can kill fish and make it more difficult to draw drinking water.

McMaster thinks his case could set a precedent for other rivers and other Southeastern states. The S.C. General Assembly, despite tough budget times, has approved spending up to $2.25 million on the legal case in the next year.

During the hearing, the S.C. Coastal Conservation League and American Rivers, which had filed the appeal, criticized DHEC’s staff for not requiring Duke to keep higher flows in the river below its dams at certain times of the year.

They also blasted DHEC staffers for failing to consider the impact on McMaster’s case and for relying on a decision by the S.C. Department of Natural Resources.

The natural resources agency agreed to endorse lower flows than conservationists want on the Catawba in exchange for $1 million from Duke and Duke’s donation of land along the riverbanks for preservation, lawyers for both environmental groups said.

DNR representatives at the meeting did not dispute that.

Attorneys said exchanging lower water levels for money and land would set a bad precedent.

But Duke said the agreement actually requires higher river flows than are required currently.

McMaster, a likely Republican candidate for governor next year, said he had no qualms about challenging Duke before the board.

“We have to protect this state and its future,” he said. “I’m not concerned about anyone except the state of South Carolina and its people.”

The State, July 10, 2009.

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