El Paso Water officials are making the case that New Mexico environmental regulators have no business fining the utility over a decision to divert sewage into the Rio Grande for months.

Attorneys representing El Paso Water said the New Mexico Environment Department has no power to fine a Texas water utility, according to filings requesting a hearing before the New Mexico Water Quality Control Commission. The commission regulates New Mexico’s water pollution, and hears appeals of fines or other enforcement actions from state environment officials.

NMED issued a $1.2 million fine to El Paso Water in June, alleging the utility violated New Mexico’s water quality laws and failed to give proper notice regarding the sewage spill, which started after heavy rains burst corroded pipelines in August 2021.

Between August 2021 and January 2022, the utility diverted more than 1.1 billion gallons of untreated sewage into the Rio Grande, saying there was no other option until a replacement fiberglass pipeline was completed.

The severity of the fine was based primarily on “the egregiousness of the discharge, namely the duration and volume of untreated wastewater released into the Rio Grande,” and potential risks to health, Matthew Maez, a spokesperson for NMED, said in an email.

A seven-figure fine is a significant cost. For comparison, the Texas Commission on Environmental Quality issued $2.4 million in water quality fines in fiscal year 2021 across 205 administrative orders.

El Paso Water vowed publicly in mid-June to fight the action. The utility is disputing NMED allegations of both surface water and groundwater violations, requesting hearings on each.

Attorneys for both sides will have a 15-minute slot at the upcoming Aug. 9 WQCC meeting in Santa Fe, according to a draft agenda.

El Paso Water officials declined interviews, citing pending litigation.

In the filings, attorneys representing El Paso Water said that NMED failed to meet its own standards for issuing violations, ignored that federal agencies are the sole authority on the Rio Grande, and called the fines excessive.

“It is a Clean Water Act matter, under which the federal government has exclusive jurisdiction and (so does) the state of Texas because the release occurred in the state of Texas,” attorney Thomas Hnasko said in an interview. “The New Mexico Environment Department, however, has been informed every step of the way on El Paso’s response to this very unfortunate and uncontrollable situation.”

Representing the utility out of Santa Fe firm Hinkle Shanor LLP, Hnasko said hearings and additional document submissions will occur. A final decision could be handed down in a few months.

The filings for El Paso Water deny those allegations, saying that the utility voluntarily gave information to New Mexico officials by copying them on reports and emails sent to Texas and federal authorities.

One of the key issues for NMED is the clean-up phase of the project, saying that the storing and stockpiling of contaminated sediments where there was a “reasonable probability” pollution could leach back into the Rio Grande violates state law. The utility contested that it followed the remediation plan approved by the U.S. Army Corps of Engineers in its response. 

Each side holds conflicting accounts about communication around the spill. 

Maez, the NMED spokesperson, said the utility’s email did not match requirements under New Mexico laws, and that the department was first notified indirectly by the International Boundary and Water Commission. The utility failed to submit follow-up information required by state law, Maez said.  

Attorneys for the utility said in the filings that NMED cannot enforce rules outside New Mexico’s borders. They also argue that the utility “voluntarily kept NMED apprised” about the discharge and the utility’s remediation and removal efforts. 

In its response and filings to the letters, the utility attached an Aug. 27, 2021, email from Denise Parra, a spokesperson from the utility and NMED officials. The filings also said the remediation plans were shared with NMED officials.

Emails obtained by El Paso Matters through open records requests show utility officials have been considering legal action since February.

The New Mexico Environment Department sent a letter Feb. 4, called a notice of noncompliance, that the utility violated New Mexico laws for unreported discharge into the Rio Grande and failure to take action to contain and cease the discharge and for disposing of refuse in the Rio Grande. The letter went on to say NMED was exploring enforcement actions, such as fines. 

NMED Bureau Chief Susan Lucas Kamat sent an electronic version of the letter to the utility in a Feb. 7 email.

El Paso Water CEO John Balliew forwarded information to Dan Pearson at HillCo Partners, an Austin-based crisis management, communications and regulatory consulting firm, according to the emails. 

Pearson formerly headed the Texas Natural Resources Conservation Commission, the precursor to TCEQ, from 1994 to 1998. 

Pearson asked Balliew on Feb. 8: “John you need to let us know how you want us involved in this. Obviously, we are not practitioners in NM.”

Balliew responded the same day: “Dan — I just sent this for your information. We will likely hire some NM attorneys.”