Michelle Galimba relies on underground water that runs through a two-inch pipe set along mountainous terrain in Kau on Hawaii island to provide for about 1,500 cattle on her family-owned Kuahiwi Ranch.

The ranch is one of about a dozen water users, including Alexander & Baldwin, the electric utilities and farming operations throughout the state, that are facing an end-of-the-year deadline to convert state water permits into long-term leases — or risk losing access to water.

But the process for gaining a long-term lease isn’t all that clear and the state Department of Land and Natural Resources, which oversees the permitting and leasing processes, hasn’t come up with criteria to help move the process along despite having three years to do so.

“I am worried about it if I did lose access,” said Galimba. “It is not just me, it’s a whole bunch of people out here who would be severely impacted. It’s people’s livelihoods.”

Galimba and other water users contacted by the Honolulu Star-Advertiser seemed unsure of some of the requirements, including a public auction process. Meanwhile, DLNR didn’t respond to requests for the procedures for converting a permit to a lease, despite saying they existed.

Asked to discuss the process with DLNR Chairwoman Suzanne Case, the Star-Advertiser was told that she woudn’t be available for interviews until after the end of the legislative session — two months from now.

“Chair Case is extremely tied up with legislative matters so we’re not scheduling any interviews with her until the end of the session,” said DLNR spokesman Dan Dennison by email.

Land Division administrator Russell Tsuji also declined an interview request.

Public water users may get a reprieve from the year-end deadline. The Legislature is considering a bill that would give them another seven years to complete the lease process. But there’s no guarantee it will pass. House Bill 1326 has angered environmentalists, Native Hawaiian taro farmers and environmental attorneys. Their criticism has been aimed at the larger water users, Alexander & Baldwin in particular, which for years diverted large amounts of stream water in East Maui for its sugarcane fields.

Deja vu

For years, and sometimes decades, Hawaii’s Board of Land and Natural Resources, which oversees the department, has allowed companies to use millions of gallons of water annually for sugarcane fields, hydroelectric plants, cattle operations and other purposes under temporary permits that by statute are not supposed to be extended beyond a year. The practice allowed public water users to sidestep stringent requirements for obtaining a water lease, including conducting an environmental review, watershed conservation plan, consulting with Native Hawaiians as to their potential water needs and bidding on the water at a public auction. As a result, there has been limited oversight over the years as to the environmental effects of water diversions, while permit holders have been allowed to use public water at rock-bottom prices. The water has never been appraised for cost.

That all looked like it was coming to an end three years ago after a judge ruled that the Board of Land and Natural Resources shouldn’t have been extending for years temporary permits that allowed Alexander & Baldwin to divert stream water. The ruling was narrowly focused on Alexander & Baldwin, but it highlighted problems with all of DLNR’s water permits.

In 2016, Alexander & Baldwin and other water users successfully lobbied legislators to pass Act 126, which gave them three years to convert their water permits into leases. The measure was approved by the Legislature and signed into law by Gov. David Ige amid heated protests from longstanding opponents of Alexander & Baldwin’s water diversions, including East Maui taro farmers.

Opponents of the measure have expressed dismay that they are back before the Legislature this year fighting the same fight.

“We’re not a banana republic. We need enforceable laws. This bill 1326 doesn’t enforce nothing. It doesn’t monitor nothing. It doesn’t put any conditions in. It is just a license to take and steal,” said Lucienne de Naie, an East Maui resident during a protest at the state Capitol last week.

The Hawaii Sierra Club, which has led opposition, has referred to the measure as the “water theft bill.”

Hawaii Sierra Club Executive Director Marti Townsend stressed that the focus of their opposition isn’t small water users such as Galimba and other Kau ranchers who are struggling to comply with the state’s water laws, but rather the large users that are diverting stream water. Still, small users such as Kuahiwi Ranch have become ensnared in the regulatory mess.

Galimba and other area ranchers have been using about 12 million to 45 million gallons of underground water annually under a state revocable permit, according DLNR documents. The amount is minuscule when compared to Alexander & Baldwin, which until recently was allowed to divert as much as 450 million gallons a day of stream water on Maui. State officials recently set the limit at 80 million gallons a day. Despite the disparity, the two users must adhere to the same statutory requirements, according to DLNR.

Regulatory quagmire

Alexander & Baldwin, which first began seeking a long-term lease for its water use in 2001, says it’s near completing the process, including conducting an environmental impact statement. But the company still must go through a public auction for the water. In order for this to happen, DLNR needs to conduct an appraisal of the water source, draft a lease document and develop minimum criteria for a watershed management plan, according to Alexander & Baldwin.

DLNR says it hasn’t finalized criteria for doing a watershed management plan. And as of late last year, documents indicate that the department was still struggling with how to appraise water sources.

Hawaii Electric Light on Hawaii island needs to convert its revocable permit into a lease for hydroelectric power generation at the Waiau and Puueo plants on the Wailuku River in South Hilo. The power facilities have existed for decades. The company says it’s still not clear how the water would be appraised or if it would be reimbursed for the costs of its environmental review if it’s not the winning bidder.

“There have been some cursory discussions with DLNR but no decision has been made,” said Jim Kelly, a spokesman for the electric utility’s parent company, Hawaiian Electric.

State statute allows the company to bypass the public auction process and directly negotiate a lease with DLNR because it’s a hydroelectric plant. But because of confusion over the lease process, Kelly said it seemed easier to go through the auction process.

“Because there were so many unresolved matters having to do with water leases, we didn’t think the process would be shorter going through the legislative/negotiated process,” Kelly said by email.

The Kauai Island Utility Cooperative has been using stream water for a hydroelectric plant under a revocable permit since it became a co-op in 2002. The company actually did obtain approval from the Legislature to directly negotiate a lease — in 2004. But since then, DLNR has indicated that KIUC needs to go through a public auction because the stream water isn’t returned to the same location.

For Galimba and other ranchers in Kau the process is all the more daunting because of the potential cost, which may include an environmental impact statement that could run hundreds of thousands of dollars. It’s also not clear if each rancher who uses water would be responsible for doing their own watershed management plan.

“Honestly, I think (DLNR) is trying to figure out how to do it at the same time we are because it’s really complicated and there are different scales of water use going on and really different water use and sources,” said Galimba.

“It’s kind of crazy because you have to do all of this permitting and then you go out for public auction. So that was a question a lot of us had was ‘OK, you do all of this and then somebody else can bid against you because you have already done it. How does that work? How is that fair?’” she said. “They didn’t really have an answer.”