The new wastewater treatment operator estimates repairs to the plant will cost at least $1 million.

The North Carolina Utilities Commission appointed Carolina Water Service Inc. as the emergency operator for the Kinnakeet Shores Wastewater Treatment Plant in Avon. Carolina Water Service began operations on Aug. 17.

The homeowners in Kinnakeet Shores are “jubilant” at the news that the Utilities Commission appointed an emergency operator.

“I was just overjoyed, and everyone is,” said Pat Weston, president of Greater Kinnakeet Shores Homeowners. “We just feel like we can see the light at the end of the tunnel.”

Ray Hollowell, the managing member of Outer Banks/Kinnakeet Associates and a former developer of Kinnakeet Shores, (a resort community in Avon), allowed the wastewater treatment plant to fall into disrepair, per multiple reports. The treatment plant services about 180 properties in Kinnakeet Shores, as well as the Hatteras Island Plaza, the Avon Post Office, and other nearby commercial buildings.

On Oct. 13, 2021, North Carolina Department of Environmental Quality placed a sewer moratorium on the wastewater treatment plant. The wastewater treatment plant cannot accept new sewer taps or extensions while the moratorium is in effect, which has held up residential and commercial development connected to the plant.

When the moratorium was implemented, more than a dozen owners and contractors in Kinnakeet Shores were in the process of obtaining building permits for construction immediately or by Jan. 1, Weston said.

Carolina Water Service estimated that the wastewater treatment plant will require at least $1 million of upgrades and renovations, including immediate repairs to the irrigation system, critical pumps, electrical systems, the emergency generator, and the UV disinfection system, according to the appointment order from the North Carolina Utilities Commission Public Staff, published on Aug. 3.

Carolina Water Service will increase the service rate for residential houses with three bedrooms or fewer from $37.44 per month to $85.12 per month. Rate increases for commercial buildings, including the Hatteras Plaza, the Hatteras Realty Complex, the Avon Post Office, and the Kinnakeet Shores Clubhouse will vary, according to the appointment order.

The rate increase will start to offset some of the beginning repairs and replacements to the wastewater treatment plant, Weston said.

After the North Carolina Utilities Commission declared an emergency concerning the Kinnakeet Shores Wastewater Treatment Plant on July 22, it released its report advising Outer Banks/Kinnakeet Associates, which owns the wastewater plant, to turn over operations of the wastewater plant to Carolina Water Service.

Hollowell did not appear at the North Carolina Utilities Commission hearing on July 22. He drove to Virginia but turned around to return to Cleveland, Ohio, for a heart catheterization procedure, according to the appointment order. Hollowell informed the North Carolina Utilities Commission that day that he planned to sell the wastewater treatment plant to Carolina Water Service.

Three days later, Outer Banks/Kinnakeet Associates announced it would not consent to the appointment of Carolina Water Service as emergency operator because it entered an agreement with Currituck Water & Sewer, Hollowell wrote, in a July 25 email to Charles Junis, director of the Public Staff.

The North Carolina Utilities Commission needed Hollowell’s consent to appoint an emergency operator. However, Hollowell could not direct which emergency operator the commission would appoint, according to the appointment order.

“Hollowell’s actions have stalled and thwarted the provision of adequate sewer service to the residents and property owners of Kinnakeet Shores subdivision,” the Public Staff wrote in its appointment order.

Hollowell did not respond to a request for comment.

At the July 22 hearing, Junis testified that he investigated the wastewater treatment plant on July 19 and found the plant in “very poor condition.” Junis documented and photographed the damage and disrepair of the plant’s tanks, clarifiers, filters, the back-up generator, blowers, and other essential components.

The wastewater treatment plant is not complying with permits. For instance, the plant is not fully treating wastewater before discharging it.

The Kinnakeet Shores Wastewater Treatment Plant was designed to discharge wastewater that did not meet permit standards to the five-day upset pond, a lined pond, and run back through the treatment plant. However, because many of the treatment plant’s components were not operational, the plant discharged untreated and partially-treated wastewater into the irrigation infiltration storage pond, an unlined five-hundred-gallon pond, Junis said. This will lead to leaching and infiltration from partially-treated sewage, and could create a health and environmental hazard.

“Hollowell is a writer of fiction in the genre of fantasy when he talks about what will happen with this plant and has repeated numerous times that ‘this will happen’ and then it doesn’t,” Junis said, in his testimony. “It strings along both the regulators, his operators, and this community, repeatedly.”

Weston also testified at the July 22 hearing about the sewer moratorium and the environmental impact of the wastewater treatment plant.

Weston did not hear about the sewer moratorium until Oct. 26, 2021, almost two weeks after the moratorium went into effect, she testified.

“We were totally blindsided,” Weston testified. “I spent the next few days just grasping at straws, calling people — Mr. [Robert] Tankard, anyone I could get information from.”

Weston is optimistic that the Department of Environmental Quality will lift the moratorium soon.

“The commission and water quality, I think, will work with this operator to get things back up and running so that they can at least start issuing building permits,” Weston said.

Carolina Water Service will need to begin repairing the wastewater treatment plant before a decision will be made about lifting the moratorium, wrote Anna Gurney, a spokesperson for the Department of Environmental Quality, in an email to the Island Free Press. Currently, there is no timeline for when the moratorium will be lifted.

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