Opinion ID: 2629221
Heading Depth: 2
Heading Rank: 3

Heading: The Commission's Final FOFs, COLs, And Decision

Text: The Commission's final decision consisted of 214 FOFs, 46 COLs, and a decision, which set forth the Commission's disposition of the contested case hearing. The following summary highlights the relevant components of the Commission's analysis and decision. In its COLs, the Commission evaluated MR-Wai'ola's application for a water use permit as an application for a new use governed by HRS § 174C-49, which placed the burden on MR-Wai'ola to establish that the proposed water use satisfied the seven conditions set forth in HRS § 174C-49(a) by a preponderance of the evidence. As a preliminary matter, the Commission, citing this court's decision in City Mill Co., Ltd. v. Honolulu Sewer and Water Commission, 30 Haw. 912 (1929), concluded that, inasmuch as MR owned the property overlying an artesian basin, it had correlative rights to make reasonable use of the underlying water with due regard to the rights of adjacent landowners in the same waters and subject to government regulations of water. Based on the evidence adduced at the contested case hearing, the Commission concluded that MR-Wai'ola's water use permit application satisfied the conditions set forth in HRS § 174C-49(a), see supra note 1, and issued an interim water use permit for the Kamiloloa-Wai'ola Well (Well No. 0759-01) for the reasonable-beneficial use of 655,928 gpd, approximately one half of the amount that MR-Wai'ola had requested.
HRS § 174C-49(a)(1) requires that an applicant for a water use permit establish that the proposed use of water ... [c]an be accommodated with the available water source. See supra note 1. Inasmuch as (1) 2.789 mgd of the total 3.0 mgd sustainable yield in the Kamiloloa aquifer system had not been allocated and (2) there were no water reservations in the Kamiloloa aquifer system, the Commission concluded that 1.25 mgd could be allocated from the available water source.
HRS § 174C-49(a)(2) provides that the applicant must establish that the proposed use of water ... [i]s a reasonable-beneficial use as defined in [HRS § ] 174C-3. See supra note 1. The Commission concluded that, inasmuch as the domestic, commercial, industrial, and municipal uses set forth in MR-Wai'ola's water use permit application were consistent with, or more conservative than, the standards utilized by the County, the proposed use, as amended by its decision, was an economic and efficient utilization of water and, therefore, a reasonable-beneficial use. The Commission, however, expressly limited the proposed water use to 655,928 mgd, reasoning that any allocation of water in excess of that granted to Wai'ola under the proposed decision and order would not be an economic or efficient utilization of water because the future developments in question do not have certain land use approvals and therefore do not meet the criteria under sections 174C-49(a)(5) and (6).
HRS § 174C-49(a)(3) requires that an applicant for a water use permit establish that the proposed use of water ... [w]ill not interfere with any existing legal use of water. See supra note 1.
The Commission concluded that a reservation of water was not an existing legal use, for purposes of HRS § 174C-49(a)(3) and HAR § 13-171-63, see supra note 13, for two reasons. First, because HRS § 174C-49(d) separately denotes existing legal uses and reservations, the Commission determined that it was incongruous to equate a reservation with an existing legal use. The Commission further noted that to so interpret the term reservation would render the proviso language of HRS § 174C-49(d) nugatory. Second, the Commission concluded that all lawful reservations were aquifer-specific. See HAR §§ 13-171-61,-62, and-63 (delineating with particularity the aquifer system wherein a reservation is designated). In this regard, DHHL's existing 2.905 mgd reservation was limited to the Kualapu'u aquifer system, pursuant to HAR § 13-171-63, see supra note 13. Therefore, inasmuch as MR-Wai'ola's proposed water use was located in the Kamiloloa aquifer system, the Commission concluded that it did not interfere with DHHL's reservation in the Kualapu'u aquifer system. The Commission further reasoned that, [t]o extend the reservation to an adjacent aquifer, especially where the evidence clearly demonstrates that there will be minimal, if any, impact on the DHHL well in Kualapu'u, does not comport with the intent of section 174C-49(d). To do so, at its most extreme, would result in DHHL having a blanket reservation in all adjacent aquifers without going through the regulatory process required by chapter 13-171, HAR, and chapter 174C, HRS.
Notwithstanding the Commission's conclusion that the proposed water use did not interfere with DHHL's reservation in the Kualapu'u aquifer system, the Commission addressed, in accordance with the mandate of HRS § 174C-49(a)(3), whether the proposed water use would interfere with DHHL's existing uses in Kualapu'u. In so doing, the Commission considered two case studies, the McNulty Model and the United States Geological Survey (USGS) Model, submitted by the parties to assist in evaluating the effect of the proposed well on DHHL's wells located in the Kualapu'u aquifer, as well as the impact of the proposed well on the nearshore environment. Both models predicted a small degree of water-level decline at the Kualapu'u well field and an insignificant reduction of groundwater discharge to the nearshore area.
The McNulty Model, proffered by MR, studied the effect of pumping 1.25 mgd from the Kamiloloa aquifer on the existing wells in Kualapu'u. The McNulty Model predicted that pumping 1.25 mgd from the proposed well in Kamiloloa would result in a water-level decline of 0.17 to 0.32 feet at the existing Kualapu'u well field and a decline of 0.09 to 0.11 feet at the nearshore well. The testimony adduced at the contested case hearing revealed that the foregoing water-level declines were conservative for Kualapu'u and Kawela, because the model did not include the effect of intrusive structures, which could limit water-level declines to the Kamiloloa aquifer system. The McNulty Model essentially predicted the worst case response incident to the proposed pumping and, in fact, predicted a more extreme effect on the existing Kualapu`u wells than the USGS Model. In sum, the McNulty Model concluded that the water-level declines at the predicted levels would have no measurable effect on the quality or quantity of water drawn from the existing wells. With respect to the nearshore environment, the McNulty Model predicted that, by pumping 1.25 mgd of groundwater from the proposed Kamiloloa well, the flux of groundwater at the Kamiloloa shoreline would be reduced by approximately fifteen percent.
The USGS Model, proffered by DHHL, analyzed the long-term effects of current and additional withdrawals on groundwater levels on the entirety of Moloka'i. The USGS Model predicted that pumping 1.326 mgd from the proposed well would cause a drawdown at the Kualapu'u wells of up to 0.5 foot and approximately 1.0 foot in the vicinity of the Kamiloloa well itself. In this connection, the study opined that the largest effects occur in areas nearest the well and effects diminish with distance from the well. The resulting water-level decline was likely to be less than normal seasonal fluctuations of the groundwater level and of the same order of magnitude of normal semi-diurnal water level fluctuations created by varying barometric pressure. In other words, the impact is relatively small. With respect to the nearshore environment, the USGS Model predicted that pumping 1.326 mgd from the proposed well would result in a reduction of coastal discharge by three percent over a thirteen-mile stretch of coastline. Based on the foregoing studies and the actual pumping levels permitted by the Commission ( i.e., 655,928 gpd), the Commission concluded that the proposed use would have a minimal impact, if any, upon DHHL's wells in Kualapu'u and, therefore, would not interfere with any existing legal uses in the Kualapu'u aquifer system.
HRS § 174C-49(a)(4) requires that the applicant establish that the proposed use of water ... [i]s consistent with the public interest. See supra note 1. In evaluating the foregoing, the Commission acknowledged its public trust responsibilities over all waters of the State, citing Robinson v. Ariyoshi, 65 Haw. 641, 658 P.2d 287 (1982). Specifically, the Commission explained that: [t]he State has a duty to protect, control, and regulate water resources and must act with a sense of fiduciary responsibility with regard to the use of water. The [ ] Code embodies the public trust responsibilities over all waters of the State. The Code mandates consideration of the large variety of public interests. The definition of public interest in the Code broadly encompasses the protection of the environment, traditional and customary practices of native Hawaiians, scenic beauty, protection of fish and wildlife, and protection and enhancement of the waters of the State. These values embodied in the Code encompass those values set forth in public trust responsibilities set forth in Robinson. Based on the public interests delineated in HRS § 174C-2, see supra note 21, the Commission concluded that MR-Wai'ola's proposed use, which included municipal, domestic, commercial, and industrial uses, was consistent with the public interest of the State. The Commission further concluded that, based on its minimal effect, if any, on the nearshore environment, fish and wildlife, and the waters of the State, coupled with the conditions set forth in its decision i.e., the monitoring well program, see infra, section I.C.7.c., which the Commission believed would ameliorate any negative effects of the proposed water use, MR-Wai'ola's proposed use satisfied the public trust principles espoused in Robinson and subsequently codified in HRS chapter 174C.
HRS §§ 174C-49(a)(5) and (6) mandate that the applicant establish that the proposed use of water ... [i]s consistent with state and county general plans and land use designations and county land use plans and policies, respectively. The Commission concluded that MR's existing uses were consistent with state and county general plans and land use designations and the county land use plans and policies. The Commission, however, found that several of MR's proposed future uses were not consistent the foregoing conditions and, therefore, did not meet the conditions set forth in HRS §§ 174C-49(a)(5) and (6). In its analysis, the Commission also elaborated on its authority to grant allocations of water beyond a four-year time horizon, pursuant to HRS § 174C-58(4), see infra note 39. More specifically, the Commission explained that the four year non-use limitation... is primarily an enforcement tool. The Commission reasoned that [o]ne of the goals of the [ ] Code is to facilitate long-range planning for the economic and efficient utilization of water and that the circumstances in this case present good and sufficient reasons for authorizing an allocation beyond the four year period where the Applicant has received all land use approvals. Further elaborating, it concluded that, [a]lthough the Commission is not limited by law to allocations based on a four year time frame, the Commission does believe that granting water use permits in excess of the four year time frame must be made on a case by case basis based on the facts of each case. In this case, the fact the applicant had all land use approvals for the water uses granted in this decision and order, the need to facilitate long-range planning, the lack of competition for the water in the Kamiloloa Aquifer System, the small amount of water already allocated, and the determination that the effect of this proposed use, as modified by this decision and order, will be minimal on the Kamiloloa Aquifer, the adjacent Kualapu'u Aquifer, and the nearshore resources, all support the allocation of water beyond the four year time frame. This case should not be considered as a binding precedent for any future case as the Commission shall consider each case on its individual circumstances. Moreover, the Commission reiterated that, in the event that Wai'ola did not effect its four-year projected use, HRS § 174C-58 provides for the revocation of the water use permit.
HRS § 174C-49(a)(7) directs that the applicant establish that the proposed use of water ... [w]ill not interfere with the rights of [DHHL] as provided in [HHCA § 221]. See supra note 1. The Commission expressly rejected two arguments that DHHL asserted with respect to the impact of MR-Wai'ola's proposed water use on DHHL's rights under the HHCA. First, the Commission disagreed that the proposed use would interfere with DHHL's existing wells located in the Kualapu'u aquifer system and noted that DHHL's contentions appeared to be significantly undermined by its plan to file an application for a water use permit to pump an additional 0.905 mgd from the same well that it vehemently maintained would be significantly affected by the proposed well located three miles away from DHHL's well in Kualapu'u. The Commission opined that [a]dditional pumping from DHHL's own well in Kualapu'u would have a much greater impact on the Kualapu'u Aquifer System and the DHHL well than the proposed well. Second, the Commission dismissed DHHL's assertion that the proposed well would render it impossible for DHHL to utilize its full allocation in Kualapu'u because it would be unable to drill a well on the borderline between the Kualapu'u and Kamiloloa aquifer systems. The Commission concluded that [t]here was no evidence presented that DHHL intended ever to place a well at that location or had any current or foreseeable funding to do so and that, therefore, the evidence was too speculative and not credible to establish that this proposed use will leave DHHL unable to fully utilize its current reservation in the Kualapu'u Aquifer. Based on the foregoing reasoning, the Commission ultimately ruled that MR-Wai`ola had satisfied its burden under HRS § 174C-49(a) to obtain a water use permit for 655,928 gpd in the Kamiloloa aquifer system.

The Commission discussed at length its conclusion that MR-Wai'ola's proposed water use would not abridge or deny traditional and customary gathering rights of native Hawaiians. In particular, the Commission reviewed its obligation to protect native Hawaiians' rights secured by article XII, section 7 of the Hawai`i Constitution and this court's decision in Public Access Shoreline Hawai`i (PASH) v. Hawai`i County Planning Commission, 79 Hawai`i 425, 903 P.2d 1246 (1995). The Commission considered the following three questions in determining whether the proposed water use interfered with native Hawaiian rights: (1) whether traditional and customary native Hawaiian rights were exercised in the project area; (2) the extent to which, if such rights were being exercised, they would be affected by the proposed action; and (3) the feasible measures, if any, that could be undertaken by the Commission to protect these rights. Based on the evidence adduced at the contested case hearing, the Commission determined that the Intervenors had sufficiently demonstrated that native Hawaiians were actually exercising traditional and customary practices on the shoreline and nearshore area makai [22] of the proposed well site in Kamiloloa. The Commission, however, concluded that no evidence was presented that the drilling of the well would affect the exercise of traditional and customary native Hawaiian rights and, therefore, that the decision to grant a water use permit for the proposed well was consistent with article XII, section 7 of the Hawai`i Constitution and the relevant case law. With respect to the protection of native Hawaiian rights under HRS § 174C-101, see supra note 4, the Commission similarly concluded that MR-Wai`ola's proposed water use would have a minimal impact, if any, on the limu, fish, and other marine species traditionally and customarily gathered and consumed by native Hawaiians. Although the Commission rejected the Intervenors' argument that the withdrawal of groundwater in the Kamiloloa aquifer would reduce the amount of groundwater discharge into the nearshore area makai of the project area, thereby adversely affecting the marine life traditionally and customarily gathered by native Hawaiians, the Commission nevertheless acknowledged its legal mandate to protect the reasonable exercise of traditional and customary native Hawaiian practices: Because the project may have an impact, albeit minimal, if any, on the traditional and customary native Hawaiian practices, the Commission imposes[,] as a condition of this permit[,] a well monitoring program as set forth in the decision and order. The well monitoring program will provide data to calibrate the ground-water models presented as to the possible effect of the well pumping on the reduction and resulting distribution of groundwater in the Kamiloloa Aquifer, which could possibly affect the marine life in question. Subject to the foregoing, the Commission concluded that MR-Wai'ola's proposed water use, as amended by its decision, would not abridge or deny traditional or customary Hawaiian rights, customs, practices, or appurtenant water rights, or any other rights referred to in or protected by Part IX of the state Water Code, the common law, or the Constitution of the State of Hawai`i.
Inasmuch as MR-Wai`ola's water use application involved the integration of land use planning and water resource management, the Commission's decision emphasized that the availability of water was critical to the success of MR's plans for economic development. As such, the Commission invoked its authority under HRS § 174C-49(d), see supra note 1, to provide for a municipal reservation in the Kamiloloa aquifer system in order to insure the proper utilization and allocation of water on Moloka'i. The Commission concluded that the reservation of water would not be limited to any one user but would be set up for municipal uses as defined in the Water Code. The Commission maintained that a municipal reservation would effectuate one of the express purposes of the Code, which was to facilitate longrange planning as a means of facilitating proper water resources management.
Inasmuch as the evidence adduced at the contested case hearing indicated that the proposed use might have an effect on Moloka'i's water resources, the Commission imposed a condition on MR-Wai`ola's water use permit to protect these water resources, pursuant HAR § 13-171-20(e) (1996). [23] Specifically, the decision provided for the installation of an observation well in Kakalahale, which is located between the proposed well site and the Kamiloloa shoreline, to monitor (1) the effect of the additional pumping in the Kamiloloa aquifer system and (2) the reduction of groundwater discharge into the nearshore environment by logging water-level data. The data would be used to extrapolate tidal functions in order to establish long-term water-level trends. The Commission believed that the well monitoring program ... [was] reasonable and proportional to the effect that the proposed use of 655,928 gpd ... [would] have on the water resources. Moreover, the Commission expressly retained jurisdiction over MR-Wai`ola's water use permit and reserved the right to modify the operation of the Kamiloloa-Wai'ola well in the event of a significant and unexpected drawdown in the well, thereby causing a reduction in groundwater discharge into the nearshore environment. Additional contested FOF and COL appear in the relevant discussion sections of this opinion.