How public water keeps getting cheaper for industry and more costly for residents.

by Don Moniak

February 11, 2024
(Updated with correction on March 21, 2024: Only the November 27th City Council Executive Session contained the reference to Project Sunny being in Verenes Industrial Park).

Aiken City Council is poised to amend the City’s water usage rates to provide financial incentives for new commercial customers by creating two new rates. While two public hearings are being held, little public discussion accompanied the first hearing; whereas deliberations have occurred behind at least two closed-door Executive Sessions.

The ordinance will increase the disparity between residential and commercial rates, as well as pose a threat to regional water supplies.  If passed, the rates of City water customers—who have endured seven rate hikes since 2010–would be sustantially higher than commercial customers who consume more than 30 million gallons per month. Council is poised to provide financial incentives to water-guzzling industrial customers, with little deliberation, except perhaps in secret sessions, as to the impacts of these decisions on local water supplies and stream flow.

City of Aiken Utilities

The City of Aiken Sewer and Water District is the largest provider of essential water and sewer services in Aiken County.  The City’s drinking water system presently serves nearly 21,000 customers, of which approximately five percent are commercial users. More than one-quarter of water customers reside in or operate businesses outside of city limits; their rates are double that of city residents and businesses.

Generally speaking, residential water consumption rates rise with increased consumption, whereas existing commercial rates decline with increased consumption. Currently, rates for commercial customers drop when they use more than 1000 cubic feet per month (748,000 gallons); and there is no special category for using more than 15 million gallons per month (Figure 1).

On Monday, February 12th, City Council will hold its Second Reading of a Public Hearing on an ordinance more accurately described in staff’s supporting memorandum (1) as “Establishing a Major Commercial and Industrial Users Charge for Water and Sewer,” but more simply titled, “AN ORDINANCE ESTABLISHING NEW CHARGES FOR WATER AND SEWER SERVICE.” (caps original).

The ordinance creates two new rate classes for commercial customers that further reduce costs for customers that consume massive amounts of water (Figure 2):

• “Tier One” rates are for customers who would consume 15 to 30 million gallons a month.
• “Tier Two” rates are for customers who would consume more than 30 million gallons a month. 

The proposed disparities between rates includes the following:

• The rates of City residents who consume the least amount of water would be 35 percent higher than commercial customers who consume more than 30 million gallons a month; the rates for lower-volume nonresidents would be 170 percent higher than the rates of newly designated “major” customers.
• The rates of existing and future commercial customers who are outside of the city limits and who consume less than 15 million gallons per month would be 1.5 to 2 times higher than those of “major” new customers.
  
  How Much is 30 Million Galllons Per Month?
  
  According to City Manager Stuart Bedenbaugh, no City of Aiken commercial water customer currently uses more than 15 million gallons per month.
  
  Any future customer north of the City limits will be supplied by the City’s surface water source at Shaws Creek. The City’s existing water treatment plant, and its new planned replacement, are located where Highway 1 North (York Street) crosses Shaws Creek.
  
  Just over six miles upstream from the plant, at the headwaters of Shaws Creek, is the spring-fed Mason Branch drinking water reservoir, which has a reported capacity of 340 million gallons. In recent years, the City of Aiken wisely acted to protect this drinking water reservoir by acquiring most of the surrounding land, a 2,269-acre property known as the “Brunswick Tract.”
  
  The heaviest water user would consume more water in a single year than the reservoir can hold. How many 15, 30 , or 40 million gallons a month customers would it take to leave the protected reservoir chronically below capacity? Would a second reservoir be necessary?
  
  Another point of reference can be found in the City’s Utilities Department monthly reports (Figure 3).  In December 2023, the Shaw Creek plant pumped 32.3 million gallons of water, and the city as a whole pumped 219 million gallons. Any water intensive industry benefitting from the envisioned water rates ordinance could consume the bulk of the city’s surface water production, and 15-20% of the total monthly water supply. Will municipal groundwater wells that could impact private wells eventually be necessary to compensate for the demands?

A third point of reference are big-tech data centers, which routinely use hundreds of millions of gallons a year. For example, a Google data center in Douglas County, Georgia reportedly consumes ~400 million gallons per year; the company’s center in Berkeley County, South Carolina ~550 million gallons per year.

As reported in Is Google Coming to Aiken County, Aiken County Council has an ongoing courtship with a yet-to-be-identified company seeking to build and operate a big-tech Data Center. The volume of water required for that operation has yet to be reported, which in part led to the dissent of one County Council member during the vote to approve a special tax rate for the unidentified company.

Other manufacturing industries that consume disproportionate amounts of water include beverage producers. For example, the Nestle Company’s Arrowhead Water Plant in California withdrew 45 million gallons of water in one year, a much smaller volume that still raised a public outcry. This paled in comparison to a 2021 approval for Nestle to withdraw up to 1 million gallons of water a day, up to 400 million gallons per year, from Florida aquifers.

Another Secretive Process Drives Decision-Making

What water-intensive industry is being enticed with the allure of cheap water?

During its public meeting on January 22, 2024, Aiken City Council spent nearly fifteen minutes deliberating a request to increase the height of two signs for the Parker’s Kitchen gas station and convenience store being constructed on West Richland Avenue. By comparison, after hearing a single public comment (2), Council declined any deliberation on the commercial water rate ordinance. 

Council also refused to divulge who might be the recipient of these consumption subsidies that are labeled as incentives, nor would it even identify examples of high-volume water consumption industries that are interested in, or demanding, cheaper water in return for establishing their presence in Aiken County. (That discussion can be viewed, beginning the 2:28:00 mark of the City’s archived livestream of the meeting.)

City staff’s supporting memorandum for the ordinance cites both “the customer” and “customers”(3) as potential beneficiaries of heavily discounted commercial water rates.

The “customer” being enticed through cheaper water rates is an unidentified business that the City hopes will move into its Verenes Business and Industrial Park next to the Aiken Regional Airport, along Highway 1 North. There, the City of Aiken owns an undeveloped, forested 142-acre parcel within the park, adjacent to Interstate 20; as well as ~45 acres across four parcels south of the airport.

The vehicle for this enticement currently goes under the moniker of “Project Sunny,” and is led by the Western South Carolina Economic Development Partnership—which may also be negotiating special utility rates along with other financial incentives for an unidentified major business at Exit 18 (widely rumored as a new Buc-cee’s location) in negotiations privately referred to as “Project Unicorn.”

City Council has held two closed-door Executive Sessions to discuss Project Sunny; first on November 27, 2023 and again on January 8, 2024 (Figure 4).  Both public notices for the sessions stated:

“Council will go into Executive Session pursuant to Section 30-4-70(a)(2) and (5) of the South Carolina Code for the discussion of negotiations incident to proposed contractual arrangements and the provision of City services to encourage the location of a new business. Specifically, City Council will discuss the following items:

A discussion regarding the provision of City services to a new business to encourage the location of that business in Aiken. This project is currently known as ‘Project Sunny.’”

(Update and Correction: The November 27, 2023 Executive Session memo stated “A discussion regarding the provision of City services to a new business to encourage the location of that business in the City owned Verenes Industrial Park. This project is currently known as “Project Sunny.” The January 8, 2024 memo contained no mention of Verenes Industrial Park).

Attending these meetings were Council members (with the exception of Councilwoman Andrea Gregory on November 27th), City staff, and Economic Development Partnership Director Will Williams.  No representatives from the company were identified as attending either meeting, and it is unknown whether City Council has even met any representatives of the unidentified Project Sunny company.

At the January 22nd meeting, Aiken City Council claimed that it could not reveal any details about Project Sunny. But in fact Council could choose to divulge some information unless members have signed a confidentiality agreement—as is the case between Aiken County Council and the unidentified company seeking to build a Data Center in Sage Mill Industrial Park, aka as “Project Sabal.”

The South Carolina Freedom of Information Act does not require secrecy, it only allows for it under specified conditions. No aspect of the law that prevents City Council from providing any information, as long as it would not compromise contractual negotiations. This is not a tax break being negotiated, it is a water usage rate discount that could have a substantial impact on our water supplies and potentially on the streamflow of Shaws Creek (Figures 5, 6); a major tributary of the South Edisto River.

Ironically, and in spite of Council’s silence, the public hearing process for the proposed discounted rates does inadvertently provide insights into the nuts and bolts of the Project Sunny incentives.

If current water consumption rates are compared to the newly proposed rates, a new industrial customer using more than 30 million gallons a month could save $83,000 a month; more than $1 million per year. Thus, the very act of proposing new water consumption rates divulges estimates of the financial incentive being offered behind closed doors, but not publicly disclosed.

No Discussion of Impacts on Shaw Creek, Groundwater, Existing Water Customers, and Water System Revenues.

Aiken City Council’s reticence in discussing, except in closed-door meetings, any aspect of an ordinance that incentivizes a business to use more water in one year than its protected drinking water reservoir can hold is inexplicable because questions unrelated to the courtship of a new business can be discussed.

Four issues stand out:

First, existing large water users would continue to pay higher prices unless they pass the Tier 1 (15 million gallon) threshold. Customers who would be considered relatively low volume users under the proposed ordinance include long-time manufacturers and major employers such as Hubbell, AGY, Owens Corning, Zeus, and Autoneum. Unless they already receive discounted rates, what is to prevent these and other well-established businesses from rightfully demanding their own rate discounts?

Secondly, as pointed out in Water Welfare For Industry On Tap For City Council, “by selling our water at a cut-rate price, the City is missing out on potentially millions in revenue over the lifespan of this project. That will be a bitter pill for customers who have been putting up with decaying pipes and broken valves for years.”

Third, the City’s surface water supply derives from a shallow, low-flow, blackwater stream called Shaws Creek, beginning with spring water, stored in a 90-acre reservoir (Figure 7)along a headwater tributary called Mason Branch of Shaws Creek. As is typical of local government ordinances, no assessment of environmental costs and impacts has been made.

To our knowledge, the increased impact on Shaws Creek stream flow, which has been reduced by City water use for more than half a century, has not been addressed. The impact on the South Fork of the Edisto River, which is already heavily impacted by new agricultural enterprises, is also unknown and unaddressed. 

Finally, unlike our County Council’s discussion about the Sage Mill Data Center, the discussion in Aiken City Council’s process contains no mention of wastewater issues or even the economic benefits—number of jobs and total investment. The City is even more secretive in its deliberations and presentation of Project Sunny than Aiken County is with Project Sabal.

The increasing scarcity of water, along with increasing regulation of its use, is motivating corporations in water intensive industries to seek out locations with fewer and less rigorous restrictions on use; generally more humid locations that have yet to realize the impact of massive water usage. 

Aiken County is clearly one such target (4). Our elected officials are willing to peddle our water at discounted rates without question—at least in an open forum. How much more inviting can a local government be than one whose leaders decline to reward water conservation except for residential use, pursue sustainable water policies, or truly consider water a common resource?

Footnotes:

(1) City staff memorandum for the water rate ordinance.

(2) The author was the only person to comment during the January 22nd public hearing. The draft meeting minutes reads as follows:

“Don Moniak stated he had some questions. He asked which commercial or industrial customers are currently in Tier 1. Mr. Bedenbaugh stated there currently are none in Tier 1. Mr. Moniak noted that Tier 2 usage is really high. He reviewed usage of some customers in other areas for comparison of usage. He also noted that Aiken County was considering a data center last year which would have used an enormous amount of water to cool their service. He asked if Project Sunny was a data center that was considering coming in the City of Aiken’s water district and was the reason for a change in rate for water service for a major user. What other industry would use that much water?

Councilman Girardeau stated Council was not at liberty to discuss Mr. Moniak’s questions.

Gary Smith, City Attorney, stated discussions that the City has had with Will Williams have all been confidential. No decision has been made yet by the company who would use this water and they don’t want the public to know about it yet.

Mr. Moniak stated he wanted to go on the record that these data centers use an enormous amount of water. They wanted to move into Aiken County by Bridgestone. There were issues about water accessibility from Breezy Hill. He noted that the City of Aiken’s water system is the largest in the County. Maybe they are looking at the City of Aiken. He said he was trying to get some answers.”

(3) A second longer-range possibility is the new Industrial Park being planned by Aiken County north of I-20, 4.5 miles north of Exit 29 along Wire Road; 2.5 miles from Exit 33.

 The Western South Carolina Economic Development Partnership purchased a 400-acre parcel there in 2022 for the purpose of a new County industrial park. In 2023, Aiken County received a $10 million allocation from the State’s plutonium settlement fund to purchase the land and begin redeveloping the rural site for industrial use.

The new industrial park site has no water supplier from an established water and sewer district.

The City of Aiken has expressed interest in developing its water and sewer system beyond its present boundaries, all the way to Exit 29. 
Add another 4.5 miles and the Wire Road Industrial Park would have a supplier of cheap water for heavy users.

(4) The new “megafarms” in the Windsor area are another example. While coverage in the Aiken Standard was due mostly to letters and guest columns, the water controversy there has been reported in detail for more than seven years by The State newspaper reporter Sammy Fretwell.

For example, in his January 2018 article “Will Rivers Run Dry, Weak state law helps mega-farms but hurts public, court told, he wrote, “without a stronger water law, South Carolina could become the home to more large-scale farms, like those that have transformed parts of eastern Aiken County in the past five years.”

The threat to the South Fork of the Edisto River from these new farms incited the formation of Friends of the Edisto River and other citizen groups.

Local resistance to massive, unregulated surface and groundwater withdrawals helped lead to the establishment in 2018 of the Western Capacity Use Area that provides some protections against excessive, unregulated water use in this area. The City’s proposed water rate ordinance fails to address how it fits within the new Capacity Use area.