Water Usage & Leases

Links to understand the Port Townsend Paper Corp’s water usage, their leases with the City of Port Townsend from whom they purchase water, and related ordinances; payment schedule; other related data and documents.

Blog entries, category Water Usage

Background on City-PTPC Water Leases 1926-March 2020

Chart: PTPC Water Payment Schedule 1928-2020 pdf

Water Leases between Lessor City of Port Townsend and Lessee Port Townsend Paper Corp, 1926 through 03/2020

4. 1983. Water Lease 4. 1983 Modification PT City and Mill pdf

3. 1956. Water Lease 3. 1956 PT City and Mill pdf

2. 1944. Water Lease 2, 08-07-1944 PT City and Mill pdf

1. 1928. Water lease 1 03-03-1926 PT City and Mill pdf

For related City ordinances, resolutions and meeting minutes, go to weblink.cityofpt.us/WebLink/Search.aspx  and search on “national paper” “crown” “mill”  and/or contact the Jefferson County Records Department in the Courthouse.

July 2007 Goal Setting for Water Use Efficiency. Elements of Port Townsend’s water system a/o 2007, supply, treatment, distribution, construction history, volume, etc. Relates year-by-year overall use of PT water system, promises made, etc.

PTPC Water Use

Gallons of water used by Mill
Year Annual Monthly Daily
2017 4,800,000,000 400,000,000 13,150,684
2016 4,600,000,000 383,333,333 12,602,739
**2015 4,000,000,000 333,333,333 10,958,904

*source: City of Port Townsend

**drought year


City & PTPC water leases, 1928, 1944, 1956/1983-2020 http://ptairwatchers.org/data/documents/

Upshot: By agreement, PTPC has paid no money to City for 400,000,000 gallons per month of water since 1986. Before that it was a relative pittance.

Friday 2019-03-29 Breaking news peninsuladailynews: city-of-port-townsend-paper-company-need-updated-water-lease/

Key files:

WA Dept of Ecology PARIS/water Permitting And Reporting Information System database

PARIS provides self-reported monthly production and water inflow/outflow quantities. Somewhat challenging to use.

Contract: WATER-LEASE-PT-and-Mill-1956-1983 through March 2020

At-a-Glance:

  • The City owns all water rights from the OGWS/Olympic Gravity Water System. Municipalities, as opposed to individuals or businesses, do not lose water rights if they don’t use them and cannot assign them away.
  • PTPC did NOT pay to build the water system
    • The City issued bonds for the OGWS system, which PTPC (Crown) covered. The City paid the mill back in full 
    • PTPC and the City have shared engineering expertise then and subsequently. The relative responsibilities are set out in the Contract, but we don’t know the actuality, given the next paragraph here.
  • PTPC does NOT maintain the system. They do a certain amount of regular maintenance that pertains to parts that they use, but as we saw in the 20-teens, they wielded potential legal action to reduce that obligation. The City does all new building, “repairs” and major maintenance.
    • A water department official ca. 2012 estimated the value of PTPC’s maintenance contribution at about $186,000/year, vs. some millions of dollars worth of water that they use.

Water Agreement between PTPC and City

  • Contract: WATER-LEASE-PT-and-Mill-1956-1983 through March 2020
  • PTPC typically has used 12-15 million gallons of water DAILY  for (almost) free from the City of Port Townsend! or 360-420,000,000 gallons per month.
    • Recently, they have been using about 10 million gallons per day (gpd), which is still 300,000,000 gallons per month, 10x
    • compare to usage by all other users of less than 900,000 gallons per day for all of the other approximately 4700 individuals, farms and businesses together.
    • Even at 10 million gallons per day (rough 2019 volume), that is still 10x as much as all other users combined.
    • Appendix W contains a good timeline of the evolving payment arrangements and gifts to PTPC over the near-century.
    • The mill used to have requirements for a nominal amount of fees plus a certain amount of maintenance. In the last contract extension the fees quietly went away a few decades ago.
  • Maintenance Agreement:
    • The City maintains most of the OGWS.
    • PTPC maintains some of the OGWS portion that serves the mill.
    • Value of the water: at commercial rates, estimated value of PTPC’s water use plus commercial base rate fees would be well in excess of $4 million per year!
    • Value of the maintenance: estimated at $186,000 annually by a city official.
    • PTPC negotiates to reduce maintenance they actually have to carry out. c.f. PT Leader articles from last major system upgrade
  • Pictures and maps  
  • 2013 PT Water Customer Overview

How much water does PTPC use?

  • 2017 – 4.8 billion gallons, or 13.3 million gallons per day. 
  • 2016 – 4.64 billion gallons, or 12.9 million gallons per day.
  • 2015 – 4 billion gallons, or 11 million gallons per day. 
  • Potable (treated by City) vs. Process Water (untreated by City)
    • PTPC’s total water is not metered directly, but estimated by total system draw minus all other users.
    • As of 2017, potable is now metered and billed at “commercial rates”. Does the rate plan sufficiently reflect the resources allocated and used by PTPC?
    • Process water, what PTPC uses for manufacturing and the bulk of their water use, remains unmetered and unbilled.
    • What portion of their total water is metered and at what rate? How much of their resource usage do they get to offset by doing good works?
  • For comparison, all other users combined use around 0.9-1.5 million gallons per day, about 12% of the total. (source: PT Leader, Aug 25, 2015)

Water Rights

  • The City of Port Townsend owns the water rights for all water from the Olympic Gravity Water System. Usage by the mill is detailed in the water contract, above.
    • Municipal water rights are permanent and unlike private water rights, never “go away” for non- or diminished usage. (Source: realtors’ water rights workshop, ca. 2010)

Port Townsend’s Water System

  • The Olympic Gravity Water System, or OGWS, lets water flow from the Olympic Mountains. At a split just outside of town, 12-14 million gallons per day goes to PT Paper
    • After the split, the City of Port Townsend and all other users currently pull about 1,000,000 gallons per day, with a potential maximum of up to 4 million gallons per day.
    • The City’s new (2017) water treatment plant is after the split so we might not be (or might no longer be) paying to treat their potable water. Have the water department verify this.
    • The rest of Jefferson County used to also pull from the OGWS but as of Fall 2017, they now pull from an aquifer near Circle & Square Automotive out in the County. (source: Jefferson County PUD)
    • Historically, PTPC has estimated their water usage and reports it.
      • The City Water Engineer says that they also have a way to estimate the amount, although the two amounts can differ by 10-20%.
      • The water was supposed to start being metered. Has it been? If not, why not? And when? Ask your city council.
      • PTPC’s estimated water usage tracks their production.
    • During the last drought in this area, PTPC reportedly reduced their water consumption to 9 million gallons per day, but popped it back up as soon as the drought was declared “over.”

Who Built the System? Who Paid for It?

  • In 1929, the City floated bonds to build the OGWS. PTPC funded the bonds and the City paid them back in full over the next few decades. As consideration, the City gave PTPC free use of the water for about 25 years in the above-linked water usage contract.
  • In the 1950’s, a schedule of fees was delineated, but much of that was waived “in consideration” of PTPC’s early backing of the City’s initial construction bond.
  • The consideration (i.e., basically free water) was extended to March 2020, when it is now due to expire.
  • Source: The above water usage agreement, especially Appendix W.
  • In a City Council “work session” meeting ca. 2010, the City Manager stated that the city would not make such a bad deal in the future. But in the next breath, mentioned potentially offering offsets to the mill for anything they might be charged! Would that the rest of us were offered such a deal!

Other considerations

  • Sufficient water for healthy flow of the source stream is much better understood than when the present agreement was made and needs to be accommodated in the agreement. Although we theoretically don’t come close to the amount of available water, judging from annual stream flow warnings, we seem to be breaching that point more closely and more often.

More detail —

By contract agreement with the City of Port Townsend, Port Townsend Paper uses as much water as they want from the City’s Olympic Gravity Water System, or OGWS, and the City “leases back” up to 4 million gallons per day for use by all other customers, although currently about 1,300,000 gallons is used. You’ll have to read the contract or speak with Ian Jablonski to learn the financial side of the lease-back.

PTPC pulls an estimated 12-14 million gallons daily. They take pristine mountain water from the OGWS, run it multiple times through their system, treat the now-dirty process water with enzymes in a 35-acre ASB/”aerated stabilization basin” (aka “the pond”), and from there, dump the heated water plus about 80-130,000 pounds of toxins annually  into the eelgrass beds of Port Townsend Bay. Those toxins include mercury, ammonia, hydrogen sulfides, organic compounds (source: US EPA’s “ECHO” online database).

The rest of us, residents and business owners, are expected to pay for the water that we use (and would be fined mightily for such levels of pollution). Port Townsend Paper should be paying their fair share. The City claimed in 2015 that not continuing to charge a handful — fewer than a dozen at any time — of poor customers $50-100/month even when their water was shut off would bankrupt the system (they since backed off from that stance). Yet at the time the City expressed little concern for $300,000 in monthly losses for water that’s given to the mill for free.

It is time for PT Paper, which uses more than all of us combined, to step up and pay for the water that they use.

Begin talking with our City Councillors now, and support them in writing a lease that requires PT Paper to pay for their water use, just like any other business in town.