Improving Senate Bill 373

There’s been a lot of talk about rolling back parts of SB 373. On Monday, the “Public Water System Supply Study Commission” established by SB 373 issued its first report which contains several recommendations to strengthen protections for our drinking water.

The Commission members were not appointed until late in the summer and the Commission held its first meeting in September. Given this short timeline, the Commission did not thoroughly address all of the issues that it is charged with studying. Nevertheless, the Commission has recommended that the Legislature take several actions, including:

  • Require water utilities to annually update and exercise their source water protection plans to ensure that the plans are up to date and that relevant information is communicated to emergency response partners
  • Appropriate $12.2 million to help water utilities pay for source water protection plans
  • Support the creation of an automated system (bringing together spill reporting hotlines, county 911 systems, etc) to immediately notify public water systems and the Bureau for Public Health in the event of a spill
  • Create tax credits for landowners who engage in source water protection activities

 
Senate Bill 373 does not specify how long this Commission is supposed to continue meeting. But there is real potential with the Commission, which brings together all of the right regulatory agencies (including the Public Service Commission, Bureau for Public Health, and the Department of Environmental Protection). It has a real opportunity to provide the regulatory coordination that was so clearly lacking in the lead-up to January 9th, 2014.

Water company seeks to limit PSC investigation

WV American Water has renewed its attempts to limit the scope of the Public Service Commission’s investigation into the utility’s response to the Freedom chemical leak. Just before Thanksgiving, the company filed a motion asking the Commission to remove all testimony and evidence from the record that doesn’t have to do with the actions and decisions made by the company on and after January 9th. In other words, the company wants to Commission to ignore questions of whether or not WV American Water was prepared for a spill, whether they had the appropriate equipment to monitor and test for chemicals, and whether or not they’d been operating their system with adequate water storage in the days leading up to the spill.

The Commission can take this investigation as an opportunity to learn the lessons from the crisis and order changes of the water company to prevent something like this from happening again. That won’t happen if the Commission refuses to consider the possibility that anything could have been done differently before January 9th.

Members of the public have the opportunity to submit comments to the Commission about this case. How to submit a comment:
1. Go to http://www.psc.state.wv.us/ and “Submit a Comment” on the left menu
2. Click “Formal Case” and agree to the disclaimer
3. Under “Search by Case Number” enter the case number “14-0872″
4. Click on the case number
5. Fill out the form to submit your comment.

Sample comment:
“I thank the Commission for opening an investigation into WV American Water’s response to the Freedom Industries chemical leak. This investigation represents our best opportunity to learn the important lessons that need to be understood about our water system to prevent something like this from happening again. Please consider all of the evidence that has been submitted in this case and order the necessary corrections from WV American Water.”

Freedom Industries’ Gary Southern charged with federal fraud crimes

The US Justice Department and the FBI are charging former president, COO and board member of Freedom Industries, Gary Southern, with criminal fraud for lying under oath about his long standing role in the company.  Through various investigations, including Freedom’s bankruptcy case and federal OSHA investigation, Southern portrayed himself as a part-time consultant who was not responsible for the disaster Freedom created.

The FBI is claiming otherwise, as noted in today’s Charleston Gazette story:

Southern is charged with bankruptcy fraud, false oath in a bankruptcy case and wire fraud, according to a criminal complaint filed Monday in federal court. The complaint was unsealed Monday after it was determined that he had been arrested.

In a sworn affidavit, FBI Special Agent James F. Lafferty II said that Southern’s scheme began shortly after the spill was detected on Jan. 9. Southern allegedly wanted to deflect blame for the spill that contaminated the tap water for 300,000 people and protect himself from lawsuits.

He allegedly engaged in a pattern of deceitful behavior, including making numerous false statements about his role at Freedom, his knowledge about conditions at the Etowah River Terminal, where the MCHM chemical leak originated, and his role in the sale of Freedom to Chemstream on Dec. 6 of 2013, according to the affidavit.

The document lists several occasions when Southern allegedly made false comments about his role at the company.
It says that Southern gave false testimony while under oath at the Jan. 21 hearing in Freedom’s bankruptcy case about his role with Freedom before Chemstream purchased it.

According to a transcript of his testimony in the affidavit, Southern said that before being appointed president in late December of 2013, he did not work for Freedom but served as a “part-time, financial type consultant to help [Freedom’s owners] get their finances and systems kind of back on track.”

In actuality, he started serving as Freedom’s Chief Operating Officer around May of 2009, and served on Freedom’s board of directors from March 2010 until October 2013, the document says.

The transcript also shows Southern said he was only “superficially” involved in the purchase of Freedom.

“In fact, and as Southern then and there well knew, Southern played a key role in the negotiations leading up to the closing of the sale, as he provided information about Freedom to Chemstream, and assisted in negotiating the amount of money that would be placed in escrow for repairs to be made to the Etowah Facility,” Lafferty wrote.

Southern is charged with bankruptcy fraud, false oath in a bankruptcy case and wire fraud, according to a criminal complaint filed Monday in federal court. The complaint was unsealed Monday after it was determined that he had been arrested.

Criminal fraud is often difficult to prove, because most statutes require that prosecutors show evidence of deliberate intent to deceive on the part of the accused.  The fact that federal prosecutors have filed these charges as criminal fraud indicates that they have strong evidence of Mr. Southern’s intent to deceive both federal officials and the public.

In a sworn affidavit, FBI Special Agent James F. Lafferty II said that Southern’s scheme began shortly after the spill was detected on Jan. 9. Southern allegedly wanted to deflect blame for the spill that contaminated the tap water for 300,000 people and protect himself from lawsuits.

He allegedly engaged in a pattern of deceitful behavior, including making numerous false statements about his role at Freedom, his knowledge about conditions at the Etowah River Terminal, where the MCHM chemical leak originated, and his role in the sale of Freedom to Chemstream on Dec. 6 of 2013, according to the affidavit.

The document lists several occasions when Southern allegedly made false comments about his role at the company.

It says that Southern gave false testimony while under oath at the Jan. 21 hearing in Freedom’s bankruptcy case about his role with Freedom before Chemstream purchased it.

According to a transcript of his testimony in the affidavit, Southern said that before being appointed president in late December of 2013, he did not work for Freedom but served as a “part-time, financial type consultant to help [Freedom’s owners] get their finances and systems kind of back on track.”

In actuality, he started serving as Freedom’s Chief Operating Officer around May of 2009, and served on Freedom’s board of directors from March 2010 until October 2013, the document says.

The transcript also shows Southern said he was only “superficially” involved in the purchase of Freedom.

“In fact, and as Southern then and there well knew, Southern played a key role in the negotiations leading up to the closing of the sale, as he provided information about Freedom to Chemstream, and assisted in negotiating the amount of money that would be placed in escrow for repairs to be made to the Etowah Facility,” Lafferty wrote.

- See more at: http://www.wvgazette.com/article/20141208/GZ01/141209252/1419#sthash.AkAJdWBg.dpuf

Southern is charged with bankruptcy fraud, false oath in a bankruptcy case and wire fraud, according to a criminal complaint filed Monday in federal court. The complaint was unsealed Monday after it was determined that he had been arrested.

In a sworn affidavit, FBI Special Agent James F. Lafferty II said that Southern’s scheme began shortly after the spill was detected on Jan. 9. Southern allegedly wanted to deflect blame for the spill that contaminated the tap water for 300,000 people and protect himself from lawsuits.

He allegedly engaged in a pattern of deceitful behavior, including making numerous false statements about his role at Freedom, his knowledge about conditions at the Etowah River Terminal, where the MCHM chemical leak originated, and his role in the sale of Freedom to Chemstream on Dec. 6 of 2013, according to the affidavit.

The document lists several occasions when Southern allegedly made false comments about his role at the company.

It says that Southern gave false testimony while under oath at the Jan. 21 hearing in Freedom’s bankruptcy case about his role with Freedom before Chemstream purchased it.

According to a transcript of his testimony in the affidavit, Southern said that before being appointed president in late December of 2013, he did not work for Freedom but served as a “part-time, financial type consultant to help [Freedom’s owners] get their finances and systems kind of back on track.”

In actuality, he started serving as Freedom’s Chief Operating Officer around May of 2009, and served on Freedom’s board of directors from March 2010 until October 2013, the document says.

The transcript also shows Southern said he was only “superficially” involved in the purchase of Freedom.

“In fact, and as Southern then and there well knew, Southern played a key role in the negotiations leading up to the closing of the sale, as he provided information about Freedom to Chemstream, and assisted in negotiating the amount of money that would be placed in escrow for repairs to be made to the Etowah Facility,” Lafferty wrote.

- See more at: http://www.wvgazette.com/article/20141208/GZ01/141209252/1419#sthash.AkAJdWBg.dpufSouthern is charged with bankruptcy fraud, false oath in a bankruptcy case and wire fraud, according to a criminal complaint filed Monday in federal court. The complaint was unsealed Monday after it was determined that he had been arrested.

In a sworn affidavit, FBI Special Agent James F. Lafferty II said that Southern’s scheme began shortly after the spill was detected on Jan. 9. Southern allegedly wanted to deflect blame for the spill that contaminated the tap water for 300,000 people and protect himself from lawsuits.

He allegedly engaged in a pattern of deceitful behavior, including making numerous false statements about his role at Freedom, his knowledge about conditions at the Etowah River Terminal, where the MCHM chemical leak originated, and his role in the sale of Freedom to Chemstream on Dec. 6 of 2013, according to the affidavit.

The document lists several occasions when Southern allegedly made false comments about his role at the company.

It says that Southern gave false testimony while under oath at the Jan. 21 hearing in Freedom’s bankruptcy case about his role with Freedom before Chemstream purchased it.

According to a transcript of his testimony in the affidavit, Southern said that before being appointed president in late December of 2013, he did not work for Freedom but served as a “part-time, financial type consultant to help [Freedom’s owners] get their finances and systems kind of back on track.”

In actuality, he started serving as Freedom’s Chief Operating Officer around May of 2009, and served on Freedom’s board of directors from March 2010 until October 2013, the document says.

The transcript also shows Southern said he was only “superficially” involved in the purchase of Freedom.

“In fact, and as Southern then and there well knew, Southern played a key role in the negotiations leading up to the closing of the sale, as he provided information about Freedom to Chemstream, and assisted in negotiating the amount of money that would be placed in escrow for repairs to be made to the Etowah Facility,” Lafferty wrote.
- See more at: http://www.wvgazette.com/article/20141208/GZ01/141209252/1419#sthash.AkAJdWBg.dpuf

Dr. Gupta appointed to head Bureau for Public Health

From the Gazette:

Dr. Rahul Gupta, director of the Kanawha-Charleston Health Department, will become West Virginia’s top health officer when he takes charge of the state Bureau for Public Health at the end of the year, the Department of Health and Human Resources announced Thursday.

Gupta will become commissioner of the Bureau for Public Health on Jan. 1. He will replace Dr. Letitia Tierney, who is resigning effective Dec. 31.

Dr. Gupta emerged as one of the few trusted public officials in the water crisis. He pushed for medical monitoring and provided the public with real data on public health impacts of the crisis. He has also advocated for a Hazardous Chemical Release Prevention Program, as recommended by the US Chemical Safety Board.

His new role will make Dr. Gupta less directly involved in the Kanawha Valley. But he will now be in charge of the agency that will be reviewing WV American Water’s source water protection plan (due July 1, 2016). And he will be in a position to work for stronger coordination between the regulatory agencies involved in ensuring safe drinking water, including the Bureau for Public Health and the Public Service Commission.

Public Service Commission hearing delayed – again

The Public Service Commission issued an order last week delaying the hearing in their investigation of WV American Water’s response to the water crisis. The February hearing (which had previously been scheduled for October) is now postponed again; the Commission will issue a future order with the new date.

The Commission cited the ongoing dispute about confidentiality as the reason for delay.

American Water Works’ shareholders are still doing fine

Earlier this month, American Water Works, WV American Water’s NJ-based parent company, had its third quarter 2014 earnings call with investors. The company’s presentation is available here. The company’s dividend payout to shareholders is still going up – from $0.28 cents/share in 2013 to $0.31 cents/share in 2014. With 179.3 million shares of stock outstanding, that’s another $5.3 million per quarter ($21 million per year) that American Water Works is paying to its shareholders instead of reinvesting in infrastructure.
AWKdividends

The shareholder presentation also gives a pretty clear picture of why the parent company isn’t all that interested in making investments in West Virginia. Slide 5 says that American Water Work’s return on equity (profit rate) for the 12 months ending September 2014 was 8.8%. Looking back for the past few years, here’s a comparison of the profit rate of the parent company versus it’s WV subsidiary:
ROEs

Clearly, WV American Water does not stack up too well against the parent company average. This means that American Water Works has little financial incentive to invest money in its West Virginia operations – a fact clearly reflected in our leaky distribution system and ill-equipped chemical testing facilities.
 

*Sources for table: American Water Works 4Q 2013 investor presentation; WV American Water 2012 rate case; and WV American Water 4Q 2013 metrics reported to WV PSC Continue reading ‘American Water Works’ shareholders are still doing fine’

Brooks McCabe appointed to Public Service Commission

This past Monday, Brooks McCabe started his job as the newest Commissioner of the Public Service Commission. McCabe was appointed by Governor Tomblin to fill the vacancy left by Ryan Palmer, who resigned from the Commission in September. McCabe will serve out the remainder of Palmer’s term, which ends June 30, 2015.

McCabe is a surprising pick, given that he is not a lawyer and does not have much of a background in utility regulation. (For more on his recent statements relating to electric utility regulation, see here). One relevant piece of experience that he does bring, however, is his leadership in cutting corporate taxes in West Virginia, including the phase out of the business franchise tax and the reduction in the corporate net income tax.

These and other tax cuts that have gone into effect over the past few years have very real effects – including for the small water utilities that McCabe will now be regulating. Throughout the various debates in the legislature around the chemical leak and SB 373, we have frequently heard legislators complain that there’s no money. This meant, among other things, that the legislature ended up passing a requirement in SB 373 that all water utilities develop detailed source water protection plans without providing any funding to help the smaller, rural water utilities. The Rural Water Association estimates that this will cost water utilities $12.2 million, and the Public Water System Supply Study Commission established by 373 has said that it will likely recommend that the legislature provide this money. That money may be hard to come by at the legislature – but it’s really not a lot of money compared to the $205 million that the state won’t get in 2015, thanks to reductions in the corporate net income and business franchise taxes.

The good news is that the Public Service Commission’s investigation of WV American Water’s response to the Freedom spill can now move forward. The case has been on hold for the past couple months; when Commissioner Palmer resigned and Chairman Albert recused himself from the case (due to perceived conflicts of interest from having been WV American Water’s attorney for thirty years), the Commission lacked a quorum to continue with the case. The Commission can now be expected to rule on motions filed in September by Advocates for a Safe Water System, the Consumer Advocate Division, the Commission Staff, and the WV Sustainable Business Council arguing that WV American Water failed to turn over documents that the Commission had ordered them to disclose; and that WV American Water had designated information as “confidential” that should be made publicly available.

Broken sewer line above WVAW water plant

This account is from last Friday’s Charleston Gazette:

A yellow stain in the Elk River on Friday was caused by water-based paint that burst from a pressurized sewer line in the river, state and city officials said. The stain originated about half a mile upriver from West Virginia American Water’s treatment plant in Charleston.

Mike Dorsey, chief of homeland security for the state Department of Environmental Protection, said the liquid that spewed from a small geyser in the river was paint. Workers at the city’s paint shop across the river had been washing out a paint truck.

“They were allowed to discharge that stuff into the sewer, but the sewer line broke,” he said. “Therein lies the problem.”

The paint is OK in the sewer system, Dorsey said, “It’s just not supposed to be in the river.”

He said the city estimates that about three to five gallons of paint was discharged.

And this time, WVAW appears to have responded appropriately to the threat to its intake:

West Virginia American shut down its Elk River treatment plant at about noon, after being notified by Kanawha County Metro 911 and assessing how much water was available in the water company’s system, spokeswoman Laura Jordan said in a statement around 2 p.m.

“Ongoing testing at the treatment [plant] shows no change in water quality,” Jordan said.

A spokeswoman from the West Virginia Department of Health and Human Resources said the Bureau for Public Health was monitoring the situation and that the water company was taking extra samples of raw water.

In a later statement, Jordan said the treatment plant had returned to regular service at 4:30 p.m. and was using additional powdered activated carbon for treatment

“No water use restrictions are necessary,” Jordan said. “Water treatment plants are designed to treat water sources with the potential for sewage outfalls, and proper disinfection levels are effective in killing harmful bacteria.”
She said the plant was doing more testing for bacteria, pH and conductivity.

The paint was not a threat, because, while it was very visible, not very much had leaked.  WVAW’s focus was, correctly, on the bacteria that was in the sewage water.  But there is a question here, just as there was with the Freedom Industries spill.  How long was the pipe leaking before the paint revealed the leak on the surface of the Elk River?

The sewage line leak also revealed something about source water protection planning on the Elk River.  Most analysts look at source water protection in terms of land based sources of chemical contamination.  None of the reports on source water protection in the Elk River Valley, including the WV Bureau for Public Health’s pathetic 2002 Source Water Assessment Report, identified pipes, sewage and otherwise, that cross the river as possible sources of contamination.  Is there an inventory of underwater pipes across the Elk River?  What is their condition?  What do they contain?

It seems that pipelines actually in the river are as much as a threat to WVAW’s water intake as chemical threats further up the watershed.  The yellow paint incident is another wake up call about threats to our water supply that needs to be addressed.

West Virginia American shut down its Elk River treatment plant at about noon, after being notified by Kanawha County Metro 911 and assessing how much water was available in the water company’s system, spokeswoman Laura Jordan said in a statement around 2 p.m.

“Ongoing testing at the treatment [plant] shows no change in water quality,” Jordan said.

A spokeswoman from the West Virginia Department of Health and Human Resources said the Bureau for Public Health was monitoring the situation and that the water company was taking extra samples of raw water.

In a later statement, Jordan said the treatment plant had returned to regular service at 4:30 p.m. and was using additional powdered activated carbon for treatment

“No water use restrictions are necessary,” Jordan said. “Water treatment plants are designed to treat water sources with the potential for sewage outfalls, and proper disinfection levels are effective in killing harmful bacteria.”

She said the plant was doing more testing for bacteria, pH and conductivity.

- See more at: http://www.wvgazette.com/article/20141114/GZ01/141119537#sthash.4BF3s5sK.dpuf

A yellow stain in the Elk River on Friday was caused by water-based paint that burst from a pressurized sewer line in the river, state and city officials said. The stain originated about half a mile upriver from West Virginia American Water’s treatment plant in Charleston.
Mike Dorsey, chief of homeland security for the state Department of Environmental Protection, said the liquid that spewed from a small geyser in the river was paint. Workers at the city’s paint shop across the river had been washing out a paint truck.
“They were allowed to discharge that stuff into the sewer, but the sewer line broke,” he said. “Therein lies the problem.”
The paint is OK in the sewer system, Dorsey said, “It’s just not supposed to be in the river.”
He said the city estimates that about three to five gallons of paint was discharged.
A yellow stain in the Elk River on Friday was caused by water-based paint that burst from a pressurized sewer line in the river, state and city officials said. The stain originated about half a mile upriver from West Virginia American Water’s treatment plant in Charleston.
Mike Dorsey, chief of homeland security for the state Department of Environmental Protection, said the liquid that spewed from a small geyser in the river was paint. Workers at the city’s paint shop across the river had been washing out a paint truck.
“They were allowed to discharge that stuff into the sewer, but the sewer line broke,” he said. “Therein lies the problem.”
The paint is OK in the sewer system, Dorsey said, “It’s just not supposed to be in the river.”
He said the city estimates that about three to five gallons of paint was discharged.
A yellow stain in the Elk River on Friday was caused by water-based paint that burst from a pressurized sewer line in the river, state and city officials said. The stain originated about half a mile upriver from West Virginia American Water’s treatment plant in Charleston.

Mike Dorsey, chief of homeland security for the state Department of Environmental Protection, said the liquid that spewed from a small geyser in the river was paint. Workers at the city’s paint shop across the river had been washing out a paint truck.

“They were allowed to discharge that stuff into the sewer, but the sewer line broke,” he said. “Therein lies the problem.”

The paint is OK in the sewer system, Dorsey said, “It’s just not supposed to be in the river.”

He said the city estimates that about three to five gallons of paint was discharged.
- See more at: http://www.wvgazette.com/article/20141114/GZ01/141119537#sthash.4BF3s5sK.dpuf

A yellow stain in the Elk River on Friday was caused by water-based paint that burst from a pressurized sewer line in the river, state and city officials said. The stain originated about half a mile upriver from West Virginia American Water’s treatment plant in Charleston.

Mike Dorsey, chief of homeland security for the state Department of Environmental Protection, said the liquid that spewed from a small geyser in the river was paint. Workers at the city’s paint shop across the river had been washing out a paint truck.

“They were allowed to discharge that stuff into the sewer, but the sewer line broke,” he said. “Therein lies the problem.”

The paint is OK in the sewer system, Dorsey said, “It’s just not supposed to be in the river.”

He said the city estimates that about three to five gallons of paint was discharged.
- See more at: http://www.wvgazette.com/article/20141114/GZ01/141119537#sthash.4BF3s5sK.dpuf

A yellow stain in the Elk River on Friday was caused by water-based paint that burst from a pressurized sewer line in the river, state and city officials said. The stain originated about half a mile upriver from West Virginia American Water’s treatment plant in Charleston.

Mike Dorsey, chief of homeland security for the state Department of Environmental Protection, said the liquid that spewed from a small geyser in the river was paint. Workers at the city’s paint shop across the river had been washing out a paint truck.

“They were allowed to discharge that stuff into the sewer, but the sewer line broke,” he said. “Therein lies the problem.”

The paint is OK in the sewer system, Dorsey said, “It’s just not supposed to be in the river.”

He said the city estimates that about three to five gallons of paint was discharged.

- See more at: http://www.wvgazette.com/article/20141114/GZ01/141119537#sthash.4BF3s5sK.dpuf

Now We Know

A lot of us pushed for a general investigation at the WV PSC last spring, because we thought that a PSC investigation was the best way for the public to get independent analysis of WV American Water’s role in the Kanawha Valley’s 2014 drinking water crisis.

Last week, the intervenor parties in the PSC general investigation case filed testimony by their expert witnesses. Expert testimony was also provided by the staff of the WV PSC, which operates independently from the three PSC commissioners and plays a key role in general investigations by providing independent technical and legal information.  Taken together, the testimony provides a clear picture of mistakes made by WVAW’s managers. This is a picture of WVAW’s failures that we have not seen anywhere else.

Here is what we have learned from the experts’ testimony.

  • In 2004, WVAW, eliminated from the Charleston plant monitoring equipment that could have detected, in real time, the presence of organic compounds, including MCHM, in its intake water.  Because it had no monitoring equipment in place, WVAW had to depend on Freedom Industries officials, who were trying to minimize the danger of their negligence, instead of having hard evidence on which to act.
  • WVAW has no backup source of raw water, either in the form of a reservoir or a second intake on the Elk or Kanawha Rivers.  The connections to neighboring water systems are not large enough to support any backup from those sources.
  • In the weeks leading up to Jan. 9, 2014, WVAW failed to produce enough clean water to maintain storage capacity within its existing system to provide a reserve in the case of an emergency.  Just before Jan. 9, 2014, WVAW was maintaining only about 35% of capacity in its system.  WVAW managers had no backup source and failed to maintain even the backup capacity that already existed in their existing system.
  • In 2002, WVAW learned that the Etowah Terminal (the tank farm later bought by Freedom Industries) was a possible threat to the company’s raw water intake.  WVAW took little or no action to identify chemicals stored in the tank farm or to plan response to leaks and spills that company managers knew were a possibility.
  • The highest concentration plume of MCHM/PPA in the Elk River took several hours to pass the WVAW water intake.  If WVAW had been prepared for the contamination with monitoring equipment, a source water protection plan and had maintained required reserves in its existing system, it is quite possible that after closing the Elk River intake for part of a day, the WVAW’s plant filters could have handled the lower concentrations of MCHM/PPH after the initial plume had passed.
  • After being notified in the morning of Jan. 9 that MCHM was in the Elk River, and after smelling it in their own system, WVAW failed to issue a “do not use” notice to the public until 6 pm that evening.  The company’s response to the crisis was chaotic, ineffective and irresponsible.

WV PSC managing engineer David Dove testified that WVAW violated more than 20 PSC rules for the operation of a water utility in WV.  Mr. Dove also listed 9 ways that WVAW failed to meet the standards for “reasonable and sufficient” operation of a water utility as required in Chapter 24 of the WV Code of Statutes.

With the testimony in the PSC General Investigation, we have a clear picture of WVAW’s role in the Jan. 9 water crisis, and it’s not a pretty picture.

PSC Staff “struggles to understand” some of WV American Water’s decisions on Jan 9

This is our third and final post on the direct testimony filed last week in the Public Service Commission’s investigation of West Virginia American Water’s response to the Freedom Industries chemical leak. Here we’re looking at what different parties had to say about the Company’s response on the day of the spill.

The Staff’s testimony provides a good timeline of the events of January 9th. The Company states that they were notified of the spill just before noon. They obtained the material safety data sheet for the chemical from Freedom Industries and began modifying the treatment process (adding potassium permanganate and powdered activated carbon). They did not notice the presence of MCHM in their finished water until 4pm. At that time they consulted with the Bureau for Public Health and decided to issue a Do Not Use order. The Do Not Use order was released to the press at 5:50pm, and the Company began automated phone calls to customers at 8pm.

According to Sustainable Business Council witness Mazyck, the modified treatment process that the company embarked on may not have been particularly effective because the chemicals added offset each other: “the WVAWWC apparently does not understand that chlorine and KMN04 [potassium permanganate], strong oxidants, are deleterious to PAC making it far less effective than if added alone.” However, the Company was apparently confident that its treatment process would prevent the chemical from entering the finished water.

The Company also issued a press statement in the afternoon in which, according to Staff witness David Dove,

it claimed that the contaminant was not harmful to human health … Staff has struggled to understand how the Company could make this statement to the public, considering that the Company had no knowledge of the concentration levels that initially the public may have ingested or been exposed to or the long term health effects, and that the MSDS [material safety data sheet] clearly stated that the chemicals were in fact harmful to human health.

The Staff notes that the company has the authority to issue a Do Not Use order on its own, without consulting the Bureau for Public Health, and should have done so immediately upon being notified of the spill, at noon. This would have reduced demand on the system and given themselves more time to respond, as well as reducing public exposure to the chemical.

The Company didn’t notify the public of the possible danger of the chemical for hours after the Company became aware of the spill, while misleading the public with its press releases stating that it was not harmful to human health. This is inconceivable, in light of the fact that the MSDS clearly state that the chemical is harmful if swallowed and harmful to human health. Staff believes that public health as it relates to ingestion, exposure, or inhalation of a toxic substance is more critical than public sanitation or fire protection. For these reasons the public must be afforded notice at earliest possible moment when an event like this occurs.

Staff argues that, in the future, the company should “[a]lways immediately issue a “Do Not Use” public notice so as to afford the public as much warning time as possible in the event of the discovery of any contaminant, toxin or substance that is or may be dangerous to human health.” It should also “[d]evelop, implement, distribute and practice emergency response plans that include immediate notification of “Do Not Use” orders to prevent possible public exposure to contaminants that may be harmful to the public health.”

In summary, the testimony provided by the various parties to the Public Service Commission’s general investigation show that the Company’s response was severely hampered by its lack of planning, lack of proper monitoring and testing equipment, and poorly maintained and operated infrastructure. Poor judgement calls on the day of the spill further exacerbated the situation.