On the second anniversary of a toxic fuel release that sickened families, the Honolulu Board of Water Supply announced Tuesday it filed a $1.2 billion claim with the Navy to recover costs of the agency’s response to that catastrophic event.

On Oct. 28, BWS said, it filed its claim under the Federal Tort Claims Act over massive leaks of jet fuel that occurred at Red Hill Bulk Fuel Storage Facility in 2021.

That includes the Nov. 20, 2021, incident in which 20,000 gallons of fuel leaked into the Navy’s water system, which serves 93,000 people on Oahu, including military families and civilians in former military housing areas.

“The filing under the FTCA is the first step in the cost recovery process and essential to preserving the BWS’ legal rights,” Ernest Lau, BWS manager and chief engineer, said during a news conference. “The Navy is responsible for the massive environmental and human health crisis caused by releases of petroleum and other hazardous substances that occurred at the Red Hill Facility.”

He added, “This emergency is ongoing and unresolved.”

“The Navy’s failure to prevent or timely and appropriately respond to these releases at Red Hill has inflicted devastating injuries upon the people of Hawaii, including the BWS, which is compensable under the FTCA,” Lau said.

He stressed that the claim — filed with the Navy’s Judge Advocate General’s Corps in Norfolk, Va. — was not a formal legal action like a lawsuit.

“At this time we have not filed a lawsuit,” Lau said during reporters’ questions. “The Navy now has about six months to respond or reject our filing of the claim.”

He added that the claim’s filing was done within a two-year statute of limitations period, with regard to the 2021 fuel spills.

“So if we didn’t make this filing … we wouldn’t have this option to pursue cost recovery in the future,” Lau said. “So we felt this is absolutely necessary; we need to exercise this option on behalf of our customers.”

Still, he said if the Navy denies the claim, “the next step would be the filing of a lawsuit in federal court.”

“Until then we don’t actually have any money coming back from the Navy to the Board of Water Supply,” he added.

On Tuesday, Patricia Babb, a spokesperson for the Navy’s Judge Advocate General, told the Honolulu Star-Advertiser it was in receipt of BWS’ claim and “conducting an evaluation of it.”

“Per the Federal Tort Claims Act, the Department of the Navy has six months to adjudicate the claim,” Babb said via email.

Likewise, the Navy here provided a brief comment on the BWS claim.

“Navy Region Hawaii remains committed to protecting the environment and the community, and we want to focus on collaborating with key partners like BWS in this endeavor,” a Navy Region Hawaii spokesperson said via email. “It would be inappropriate to comment on ongoing legal matters.”

According to Lau, the $1.2 billion figure stems from BWS’ 2021 response to “the ensuing drinking water contamination crisis” due to the Red Hill fuel leaks.

BWS involvement included permanently shutting down one of Oahu’s four main water supply shafts — among the largest of the agency’s more than 90 underground water sources.

“The BWS has no choice but to shut down its Halawa Shaft as well as certain Aiea and Halawa drinking water wells to prevent fuel contamination from entering our own water system,” Lau said.

To deal with this crisis, he said, BWS was “‘forced to implement enhanced water quality testing and protocols, install additional groundwater monitoring wells (and) temporarily increase its reliance upon other water sources to replace the lost water production, develop alternative water supply wells to make up for the lost water production, and evaluate drinking water treatment technology.”

He added that the “$1.2 billion claim is to recover the costs for these response actions.”

“The Navy has publicly stated that it is taking accountability for its leadership failings at Red Hill, and we expect the Navy to reimburse the Board of Water Supply for these damages,” Lau said.

He added much of that $1.2 billion figure comes with developing “an equivalent Halawa Shaft at another location.”

“Remember, Halawa Shaft was built in the 1940s, and I think at a fraction of that cost,” Lau said.

Meanwhile, BWS’ claim comes at a time when the agency is looking to increase its water rates for Oahu’s residential and nonresidential customers. The agency says the cost to deal with the Red Hill fuel leaks necessitates new water rate hikes for its customers.

The proposed water rate increases — in some cases, particularly for nonresidential users, rising up to 10% each year over the next 5-1/2 years — are scheduled for a BWS board of directors vote on Monday.

“If approved on Monday, the first increase is scheduled for Feb. 1, 2024,” BWS spokesperson Kathleen Elliott-Pahinui told the Star-Advertiser via email.

Although it was Secretary of Defense Lloyd Austin who in March 2022 made the decision to defuel and permanently close the Red Hill fuel storage facility, the BWS says, outside of the Navy, it has not reached out directly to the Pentagon over potential cost recovery.

“I have not spoken to the secretary of defense,” Lau said. “Perhaps because of the filing of this claim, he’d be willing to come to the table and talk to us.”

Over the weekend, the Joint Task Force-Red Hill reported it had safely removed about 103,458,180 gallons of fuel, or 99.5% of the fuel previously stored at Red Hill, officials said.

The next stage in defueling, expected to begin Dec. 4, is removing the remaining usable fuel in the “flowable tank bottoms,” which refers to the liquid fuel in the last seven feet of the tanks, the task force said.

Draining the massive fuel tanks, which sit 100 feet above a critical aquifer most of Honolulu relies on for drinking water, began in October.

Although BWS filed its claim in late October, it waited until Nov. 21 to announce that it had done so.

On the same day as its news conference, Department of Defense officials — namely Navy personnel — were expected to provide information to the state Commission on Water Resource Management over Red Hill “defueling operations, remediation and closure of Red Hill” as well as on “Red Hill Shaft recovery and monitoring, and monitoring well development and water data,” the meeting agenda states.

More leaks, Navy texts

Vice Adm. John Wade, the officer overseeing the Red Hill defueling effort, said Nov. 15 during a public Fuel Tank Advisory Committee meeting that three gallons of fuel leaked during two incidents in October.

The first was on Oct. 16, the day defueling began at Red Hill.

According to Wade, as pressure built up in the system, a valve in the facility’s underground pump house began to leak. The second time was on Oct. 26, just outside the pump house, he said.

Wade said that in both instances on-site personnel quickly contained and disposed of the fuel and that “there was absolutely no release to the environment.”

But the military continues to face heightened scrutiny.

On Thursday, text conversations between two senior Navy officials became exhibits in a lawsuit brought against the government by families that were exposed to the tainted water.

Kristina Baehr, an attorney representing the families, had sought the text messages from former Naval Facilities Engineering Command Hawaii commander Capt. James “Gordie” Mayer and former Joint Base Pearl Harbor-Hickam commander Capt. Erik Spitzer.

However, both officers’ issued work phones were erased by the Navy in summer 2022 when they left their positions so they could be reassigned to their successors.

After Baehr charged that the Navy “recklessly destroyed” evidence, the service provided copies of text threads involving Meyer and Spitzer that were preserved on other leaders’ phones.

In a legal brief with the filing, Baehr argued that the texts demonstrate that Meyer — whose performance was heavily scrutinized in an investigation by the Pacific Fleet — had far more Red Hill-related conversations than he had disclosed to military investigators.

In June 2021, Meyer received a text from a fellow officer that stated members of his staff were “sounding alarm bells” about groundwater quality.

After the November 2021 spill, he consistently downplayed the scope of the contamination, insisted it was limited in scope and expressed his frustration with local officials.

On Dec. 3, 2021, days after the state Department of Health issued an advisory for people on the Navy’s waterlines to not use that water, Meyer texted a fellow Navy official that he wanted local officials to rescind the warning.

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Honolulu Star-Advertiser staff writer Kevin Knodell contributed to this report.