An Update on Project Sunny and The Water Guzzler Ordinance.

by Don Moniak
March 11, 2024
(Updated March 12, 2024. As suggested in this story yesterday, Project Sunny is indeed a chicken processing plant. As reported by WFXG-Fox News reporter Abby Bradshaw, House of Raeford plans to locate a new plant in Aiken at Verenes Industrial Park. The project still has two public hearings remaining, one Aiken City Council in two weeks and one with Aiken County Council sometime in April.)

Summary

A City of Aiken attempt to amend its water and sewer rate ordinance to provide radical discounts for an unidentified company in an unidentified industry ran into flak from City residents in early February 2024. As a result, Aiken City Council took the ordinance off its meeting agenda, ostensibly due to citizen questions and concerns.

Throughout this time City Council, with the blessing of the City Attorney, refused to divulge any information about plant location, job creation, company investments, or environmental impacts.

One month later, the City has pivoted by abandoning the water and sewer rate amendment and opting for a new, reformulated ordinance that has more palatable language, but very similar results—discounts of 50 percent instead of 67 percent that disincentivize water conservation.

The latest effort coincides with Aiken County Council’s process, now two-thirds complete, for passing an ordinance providing a Fee in Lieu of Taxes (FILOT) arrangement for what is now known to be the same unidentified company in an unidentified industry.

Between the two processes, some information regarding economic benefits has emerged that City Council has asserted, just six weeks ago, must remain confidential: investment, location, and job creation. Information about any negative impacts remains confidential.

The new details about jobs, combined with high water use and sewage production and the presence of an extensive local network of poultry producers in the northeast portion of the county and neighboring Lexington County, suggests the possibility of another potential customer—a labor intensive chicken processing plant that requires high volumes of water and wastewater discharge capacity.

(The new ordinance will face its First Reading of the Public Hearing (1) for the replacement ordinance will take place tonight’s City Council meeting, which begins at 7 p.m. at City Municipal Building, 111 Chesterfield Street. A closed-door, Executive Session regarding Project Sunny is also planned prior to the Regular Meeting.)


Details

The City’s Water and Sewer Rate Incentives

As reported in The Water Guzzler Ordinance, on January 22, 2024, Aiken City Council moved one step forward towards amending its water and sewer rate ordinance in order to provide major discounts to any commercial customer outside of the city limits. At the time, Council claimed it was restricted from providing any details on the “potential customer” for whom the amendment was clearly being tailored.

The amended water rate ordinance proposed discount rates for customers that consumed at least 15 million gallons per month from the City of Aiken’s Northside water supply, and a deeper discount—up to 67 percent—if a customer used more than 30 million gallons per month. The same thresholds and similar rate discounts held true for wastewater discharge. In both cases, the more water used, and the more industrial wastewater produced, the lower the prices.

No other City water and sewer customer even comes close to using this much water, or discharging that much wastewater. The Project Sunny facility, or any other major water user, could consume as much water in one year as the capacity of the City’s spring-fed Mason Branch reservoir. It also has the potential to put a further strain on the County’s Horse Creek Wastewater Plant, which the County is working to upgrade to meet a projected future capacity that seems to keep increasing.

At its January 22nd meeting, only one potential user, referred to only as “the customer,” was identified. Although “the customer” appeared to have a strong link to a Western South Carolina Economic Development Partnership economic development effort for the City’s Verenes Industrial park, described only as “Project Sunny,” Aiken City Council refused to acknowledge the connection—a stonewalling that was encouraged by the City Attorney.

The rate amendment effort stalled after considerable concerns, questions, and outright opposition arose regarding both fairness to other customers and the impact on the water system and supply from a any water guzzling business.

After receiving numerous questions and complaints, City Council took the amended water and sewer rate ordinance off of its February 12, 2024 meeting agenda. Councilman and Mayor Pro Tem Ed Girardeau stated the reason was due to citizen concerns and questions, and a resulting need to consult with experts. He stated that:

“It has been recommended that we amend the agenda to continue item number six under old business to a future meeting.  I know there’s a lot of interest here tonight, it’s the change in the water rate for a bigger industry. This week we’ve received a lot of questions, and they are good questions quite frankly. Some of them think you think you know the answer to, and some of them you don’t know the answer to. We’ve decided to bring in some experts and get some help to give us a little bit of background as we go forward.”

In spite of the deferral of the second public hearing, three citizens (1) still spoke up to raise concerns and objections to the ordinance. The issues were similar to those described in Water Welfare on Tap in City Council: water is a renewable, but finite resource; Aiken’s water supply is threatened by the proposed ordinance; the ordinance disincentives conservation; the discounts are unfair to existing residential and commercial users; the incentives will result in lost revenues that could be used for infrastructure maintenance; Aiken should not trade its water resources for unknown economic benefits.

Meet the New Discounts, Almost the Same as old Discounts.

If City Council sought anything more than expert legal and policy advice, it is certainly not evident in its latest Project Sunny incentives drive.

Instead of continuing with the troubled amended water and sewer rate ordinance, the City of Aiken has pivoted to a new strategy—abandoning its rate ordinance amendment, and substituting it with an ordinance for a specific agreement with the single unidentified company in an unidentified industry.

In doing so, the City revealed information that just six weeks ago it claimed was confidential. The supporting memorandum (Figure 1) for the lightly modified approach indirectly describes the location (Verenes Industrial Park) by naming the company as “Project Sunny.” The memo also identifies an economic benefit of 900 jobs at a starting wage of $18 per hour and benefits; but not the economic investment itself; estimated by Aiken County to be $185 million.

The difference between the two approaches is minimal—a 50 percent discount for any water consumption above 15 million gallons per month. The previous offer ranged from 60 to 67 percent. (Table 1) In both scenarios, the more water use, the lower the price; disincentivizing water conservation.

Alongside the water rate discounts, the City is also offering discounts on wastewater discharges into the City’s sewer system—that eventually are treated by the Horse Creek Plant—that range from 30 to 45 percent. The discount proposed in the abandoned water and sewer rate ordinance was 58 percent. As with water use, more wastewater production means lower costs for the company; disincentivizing any wastewater reduction efforts.

Water Service	1/22/24 Proposed Rate per 750 gallons	3/11/24 Proposed Rate per 750 gallons	Out-of-Town Commercial Rate
15-30 Million Gallons/Month	$1.31	$1.64	$3.27
> 30 Million Gallons/Month	$1.07	$1.64	$3.27
Monthly Bill 30M Gallons	$43,610	$65,616	$130,810
% Discount 30M Gallons	67 percent	50 percent	N/A.

“The Sponsor;” Aiken County’s Parallel Project Sunny Process

The City is also proceeding in tandem with Aiken County Council, which has already tentatively approved a Fee in Lieu of Taxes (FILOT) agreement with the Project Sunny company, only referred to in the County ordinance as “the sponsor.” The process is two-thirds complete, as Council approved the FILOT agreement during its Second Reading of the Ordinance in early February. All that is left is a Public Hearing, probably to be held in April once the City finishes its incentives business.

In the process, another detail emerged that City Council originally refused to disclose; that the Project Sunny “sponsor” company intends to invest up to $185 million over a thirteen-year period. Yet, the County inexplicably did not divulge the job creation numbers, opting only to state that the FILOT incentive agreement required that 125 jobs be created in the first four years of operation.

Both the City and the County predictably refuse to divulge the name of the company for fear of jeopardizing the deal and/or breaking any existing nondisclosure agreements. However, both entities also refuse to identify even the the industry that is involved, or any other pertinent information regarding potential adverse impacts.

The situation is both similar and dissimilar to Project Sabal. As reported in Is Google Coming to Aiken County, Aiken County Council passed a FILOT ordinance for an unidentified company hiding behind a another shadowy, shell holding company; another business with a tremendous appetite for water and a propensity for enormous wastewater production.

Although the County’s Project Sabal ordinance identified investment benefits while withholding environmental costs; it did at least name the industry: water intensive, hi-tech data storage centers.

The similar, but slightly different, Project Sunny approval process was subjected to objections and questioning by two county residents during the open public comment period at County Council’s March 5th public meeting; who reside less than six miles north of the proposed Project Sunny,

During a three-minute speech to Council, Vicki Simons cited the intent of South Carolina’s Freedom of Information Act to promote openness in government; the State Constitution’s provision that “all political power is vested and derived from the people only,” and the fact that “Aiken County Voters are at the top of Aiken County’s 2024 Organizational Chart, meaning that we are your bosses”

She then described a plant in Saluda County , one that the Western Carolina Economic Development Partnership touts in its promotional materials, with serious wastewater issues:

“An August 17, 2023, article in The State newspaper reported a pet food plant (SC Pet Solutions) was polluting a popular clear-running creek into a slimy, foul-smelling stream with unsafe levels of bacteria. This was causing Saluda County residents to be distraught.
We absolutely must not have a repeat of this situation in Aiken County!”

She concluded by saying:

“Because this is our backyard, Aiken County voters and taxpayers deserve to know regarding ‘Project Sunny:’

• the true name of the company;
• the nature of the proposed business;
• why it could consume more than 15 million gallons of water per month; 
• and what effect this company’s business will have on air and water quality in our county.

It is imperative that before Council has any further ‘readings’ or a Public Hearing on ‘Project Sunny,’ that Council reveals the company name, the nature and scope of the business, and its true projected impact on natural resources.”

Do you have any questions?”

In typical fashion, no County Council member commented or asked a question.

Michael Simons then raised further objections, asking in part:

“What kind of business would require having access to that much water? It’s unheard of here in Aiken County.
Why would we want to have a business in our county that requires such an amount?”

Again, there were no answers, no comments, no questions.

What Industry? Another Possiblity.

What industry is associated with Project Sunny? Unlike the Sage Mill Industrial Park, one likely location (Figure 2) in Verenes Industrial Park is only a third of a mile from numerous residents along Shiloh Church Road, an area that has also experienced steady residential growth; where another large subdivision is planned near Shiloh Church and Highway 19. North.

As reported in The Water Guzzler Ordinance, two water intensive industries are hi-tech data centers and beverage producers.

Given the combined information provided by the County and City, a third possibility is a chicken processing plant. The meat processing and packing industry remains a labor-intensive industry that requires high volumes of water and produces high volumes of wastewater.

One example can be found about fifty miles away from Aiken. According to a November 2017 article in The State newspaper, the long-embattled, odorous House of Raeford chicken processing plant in West Columbia (Figure 3), which at that time had about 800 employees—just 100 fewer than the projections for Project Sunny—was a major water user:

“The plant is also a moneymaker for West Columbia because processing chickens for supermarkets uses lots of water. City officials say the plant paid $1.2 million for water last year, about 10 percent of the city’s utility revenue.”

West Columbia’s existing water rate for in-town commercial customers is currently $3.70 per thousand gallons—considerably higher than that proposed for Project Sunny. Generating a $1.2 million dollar water bill would require approximately 324 million gallons per year—close to 30 million gallons per month.

Another factor to consider is the considerable network of poultry producers in north central Aiken County and neighboring Lexington County. Any chicken processing plant would have a local supply, although it would be competing with other area processors for that supply.

Whether it is a chicken processor, beverage producer, data center, or other industry, Aiken County residents have the right to know what water intensive, waste producing, and possibly odor emitting industry is being incentivized by their elected officials through tax incentives and discounted water and sewage service and tax incentives to locate here.

The City of Aiken, Aiken County, and the Economic Partnership group could reveal the Project Sunny industry without revealing the company; just as it did with Project Sabal. They just choose not to, putting the confidentiality demands of the “sponsor” over the concerns of county residents.

Figure 3: The House of Raeford Chicken Processing Plant in West Columbia. Although area residents complain about powerful odors from the plant, it remains a major employer and West Columbia water customer; there are no rumors or reports of it moving. However, a similar, more modern plant is a possiblity in Aiken County.

Footnotes:

(1) Technically, a City of Aiken public hearing consists of two “readings.” The proper phrasing is “First Reading of the Public Hearing,” followed by “Second Reading of the Public Hearing.”

In contrast, Aiken County conducts three readings for each new ordinance, but only one public hearing.

(2) From the Feburary 12, 2024 Aiken City Council meeting minutes:

Laura Bagwell.

Laura Bagwell stated she wanted to speak about the item that was removed from the agenda. She said she wanted to talk about why it is a bad idea to create a discount water rate for major commercial and industrial users. The science for this region does not support that idea. The city’s water comes from both ground water and surface water. These are renewable resources, but they are not unlimited resources.

Recent studies show that if this region continues to grow at a rapid pace, and when we experience another drought like 2002 that we are going to experience real shortages in ground water and surface water. This is likely to happen in the next two generations. Shaws Creek, which supplies 20% of our water, may have insufficient volumes for one or two months. Projections indicate that Groundwater levels may drop below the top of the aquifer near Shaws Creek. This poses a real risk of the ground sinking, dry wells and maybe permanent irreversible damage to our aquifer.

The new water treatment plant will not matter. It is like when a check account is overdrawn, it does not matter if you still have checks. The science is telling us that our water resources could soon be stretched very thin.

Financially this is a losing proposition. She asked if the city had really analyzed the true cost of supplying cheap water for big users. She noted that residential rates go up and up as more water is used. Our existing commercial rates already include a provision for a price break with increased use. In other words, the city already rewards commercial users when they use more water and now decide to give them an even bigger price break. She asked if this would be a permanent discount for the operational life span of this mystery business. She asked how many millions of dollars will the city miss out on by promising cheap water in exchange for coming here.

She asked how many permanent full time jobs will the new business provide. How can Council guarantee that this corporate give away will not place an additional burden on regular water customers who have already endured 7 rate increases in 14 years. She noted that the city has better tools to attract investment—infrastructure lines, tax breaks, a discount rate that sunsets, ideas but it is not permanent. Don’t use incentives to be over allocated resources.

Peter Kleinhenz.

Peter Kleinhenz, Executive Director of the Aiken Land Conservancy, stated the Land Trust’s mission is to serve Aiken’s character for present and future generations through advocacy and land protection. He said he was present to speak about the proposed tier water rate ordinance that Laura Bagwell spoke about. This ordinance, which as proposed incentivizes industrial and commercial development by offering reduced water rates seems, to attract both, presumably to foster greater economic development to our community.

He said he decided to look at what some of the fastest growing cities in South Carolina were doing. Charleston, Hilton Head, Columbia, Rock Hill and Myrtle Beach all charge industrial and commercial users more for increased water usage. The more water you use, the more you pay. They all do the opposite of what is being proposed. No one would argue that those communities are not economically viable for attracting development.

However, those communities likely understand that safeguarding a finite resource such as water avoids significant taxpayer incurred costs down the road. There are plenty of examples of water depletion leading to avoidable costs that taxpayers may get stuck with, including here in the Southeastern United States. Aiken Land Conservancy is pro-growth.

However, protecting one of Aiken’s most important natural resources from exploitive use is more important than that. We believe there are better means with which to attract growth the City of Aiken wants to see that does not involve the depletion of a resource that could become scarce and that everyone of us depends upon.

Meg Adams.

Meg Adams stated she wanted to provide her opinion from the perspective of someone who works in a local law firm that specializes in commercial transactions, specifically commercial real estate. She said she works every day in development. She said she is pro-development and understands the need for it, but she also understands the need for sustainable development.

She said she is also a conservationist. She said she had worked with a local non-profit water conservation agency, for about 7 years. She said she was here to tell Council there is a better solution to this than the major water rate tier for large water users. She said she understood the need to bring in new industry and to provide incentives for new businesses to come, and understands the need to bring in new jobs, but not giving away a natural resource that is already under extreme threat.

She noted this is not just environmentalists screaming that we need to hug more trees. The State of South Carolina has been under threat as far as our water resources for a long time. This is really a nation-wide issue. Giving away a resource that is already highly threatened is not a good idea. She said she just wanted to point out a few things that she found a little humorous when she was reading through the proposed ordinance as well as scanning through some stuff on the city’s website as far as water utilities go.

The city’s website says that water services provided by the city and residential rates are structured to encourage conservation and the more water one uses the higher the cost. She asked why this standard does not apply to commercial users. Commercial users already have a discount.

She asked if we would give them a second discount to use even more water, to use even more of the resource that is already under threat. It incentivizes them to use more water. She asked why the same standard did not apply to commercial users as to residential users. Also, on the city’s website and on the water bill is a list of ways for residential users to conserve water. There are several other things she could point out.