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December 18, 2012

Chobani to pay $130K for water use

The Daily Star

---- — Chobani has agreed to pay a $130,000 negotiated settlement to the Susquehanna River Basin Commission after the agency determined the firm’s yogurt plant in Columbus withdrew aquifer water without the required permits, officials said Monday.

Chobani communications manager Lindsay Kos said the settlement represents “another step in the positive process of working closely with SRBC on handling the matter.”

The public first became aware of the SRBC investigation in February when The Daily Star reported that several residents of South Edmeston — just across the Unadilla River from the Chobani plant — indicated they were getting insufficient water from the wells connected to their homes. Those residents said they suspected that Chobani’s own water usage was having a significant impact on the aquifer supplying their wells.

At the time SRBC revealed that Chobani had self-reported in August 2011 that it had been taking water without the required permit from the agency. Last September, SRBC spokeswoman Susan Obleski said Chobani was using approximately 800,000 gallons a day of groundwater.

Obleski said Monday that water usage level has not appreciably changed, and since then Chobani has filed applications for the permit it needs to draw the groundwater it continues to use.

In response to questions, Obleski said, “Chobani is authorized to continue, but not to increase, its withdrawal and consumptive use of water until the time when SRBC acts on the applications, which are currently still pending.”

SRBC had indicated last winter that it was going to have Chobani undertake aquifer testing to determine whether its withdrawal of water was responsible for the water shortages being reported by some South Edmeston residents. Initial plans called for that testing to be performed last summer. However, the SRBC has only recently approved the aquifer test plan and the company has begun the testing, Obleski said.

Kos said in a statement: “Background testing continues and all the monitoring and control systems are working well. We will continue to work closely with SRBC after receiving final test results, and look forward to continuing our positive working relationship with them to ensure our compliance.”

On Monday, many of Chobani’s top executives, including founder and chief executive officer Hamdi Ulukaya, were in Twin Falls, Idaho, for the opening of its new 1 million-square-foot yogurt processing factory. Work on the $450 million complex had begun just a year ago.

“Twin Falls is our second home, but will not replace our central New York plant, which will continue to operate at full capacity,” Ulukaya said in a statement. “In fact, we will continue to grow and invest in our New York operations.”

In recent months, Chobani has expanded its Columbus plant, as part of a $134 million project. That effort was made possible, in part, by way of a $3.8 million assistance package approved by the Chenango County Industrial Development Agency.

Jennifer Tavares, Chenango County’s director of economic development, said the expansion project at Columbus “has not been 100 percent completed.”

As for the fact Chobani did not seek the required SRBC permit before withdrawing groundwater for its plant needs, Tavares said the uptake of the water was “not directly related” to the project for which the company was receiving IDA assistance.

“We are not the permitting authority, so it’s not our role to direct them as to what SRBC permits they may need,” Tavares said.

In September, approximately five years after Chobani yogurt was first introduced to consumers, Ulukaya was identified by the Bloomberg Billionaires Index as having a net worth of $1.1 billion.

Given Chobani’s explosive growth in recent years, Tavares said: “It’s logical that they need more than one location to make their product.”

The company employs more than 1,000 people at its Columbus plant.