The state Department of Environment and Natural Resources changed its position on a controversial reservoir project in Cleveland County, shortly before depositions were set to begin in a lawsuit against it.
DENR said Monday that the timing of its decision was not related to the depositions.
The project to build a new dam on the First Broad River, flooding a basin to create a reservoir, has been in the planning stages for more than a decade, with the support of local officials and developers. They've said the project would ensure a stable water supply for Cleveland County. Developers have bought the land surrounding the proposed site.
Environmental groups, however, say the reservoir is a "real estate scheme" that would needlessly harm the environment. The cost of the reservoir would be around $95 million – nearly twice as expensive as purchasing the water from neighboring systems would be.
Under Dee Freeman, who headed DENR for former Gov. Beverly Perdue, the agency opposed the project as unnecessary and overly expensive. But under Gov. Pat McCrory's appointee, Secretary John Skvarla, the agency abruptly waived its requirement for a water quality permit for the project, allowing it to move forward without public scrutiny.
"It's the first time they've ever done that in the history of North Carolina," said Southern Environmental Law Center attorney D.J. Gerkin.
At the time, Division of Water Quality chief Tom Reeder said the project was already under review by the Army Corps of Engineers, so the additional permitting process would be unnecessary. He said he expected the corps would likely disapprove the project.
Gerkin believes the waiver was due to pressure by powerful supporters. "It was very politically connected. Its prospects changed very suddenly."
The powerful state House Rules Chairman Tim Moore, R-Cleveland, supports the project. He also serves as legal counsel to Cleveland County Water, the main proponent of the project.
House Majority Whip Mike Hager, R-Rutherford, who has done engineering work for the project's developers, also supports the reservoir, as do former state Sen. Debbie Clary, R-Cleveland, and former Sen. Wes Westmoreland, R-Cleveland.
The environmental group American Rivers, represented by SELC's Gerkin, took the state to court over the waiver. DENR argued the waiver decision was "above review" and asked an administrative law judge to throw the case out.
In December, Judge Selina Brooks sided with American Rivers and SELC, allowing the case against the waiver to move forward. She instructed both sides to complete discovery by the end of February.
Gerkin had planned to seek testimony from Reeder and DENR Assistant Secretary for the Environment Mitch Gillespie, a former lawmaker who also supported the reservoir waiver.
"We were keyed up for discovery, and we were going to go get documents and depositions to find out what led to the decision," Gerkin said. "Within days, the state abandoned the position and revoked the waiver."
On Jan. 9, DENR sent a letter to Cleveland County Water manager Clyde Smith, notifying him that it was rescinding the waiver and that the water quality permit for the reservoir was pending. It was part of a motion asking the judge to declare the lawsuit moot.
After SELC protested that the permit application itself was incomplete, DENR sent a second letter to the county, informing Smith the project is on hold until the county completes the application.
"DENR determined that the most appropriate course of action [after the judge's decision] was to withdraw the July 2, 2013, notice of waiver," DENR spokeswoman Sarah Young said in an email to WRAL News. "Once we receive a completed Environmental Impact Statement from Cleveland County, we will make a decision regarding the best way to proceed."
Young said the timing of the department's decision to rescind the waiver had "absolutely nothing" to do with the upcoming depositions.
"We didn't want to battle this in court and waste more state resources," she said. "Thus, DENR determined that the most appropriate course of action was to withdraw the July 2, 2013, notice of waiver."