The Old Knoxville Highway Utility District has filed a lawsuit that seeks to halt the Industrial Development Board of the Town of Greeneville and Greene County and US Nitrogen's proposed double pipeline connecting the plant to the Nolichucky River.
The lawsuit, filed in Greene County Chancery Court Tuesday, alleges that the pipelines infringe on the utility district's right to supply water to any entities in its boundaries.
US Nitrogen, whose plant is currently under construction off Pottertown Road in Midway, has planned to build the pipelines to draw as much as 1.9 million gallons per day from the Nolichucky River to use in its cooling processes.
The plant will produce liquid ammonium nitrate to be used later in parent company Austin Powder's manufacturing of explosives.
A second pipeline would take water from the plant to river and discharge as much as 500,000 gallons per day back into the Nolichucky.
The Tennessee Department of Environment and Conservation has granted US Nitrogen permits for drawing water from and discharging water back into the river.
The Tennessee Department of Transportation has also approved right-of-way permits allowing for the Industrial Development Board to construct the 12-mile pipelines along state highways 340 and 348.
TDOT cannot grant the permits to a private company such as US Nitrogen, so the IDB and US Nitrogen have agreed the company would be responsible for the upkeep of the pipelines and paying for construction costs.
TDOT's granting of the permits was also contingent on other companies being able to use the pipeline for water needs.
"The IDB resubmitted the permit application and certified that they (IDB) will own and control the pipelines, making them available to other businesses in addition to US Nitrogen,"
TDOT spokesman Mark Nagi said after TDOT granted the permits.
Old Knox's lawsuit says such a pipeline would put the IDB and US Nitrogen in competition with Old Knox and cause the utility district to lose revenue.
The lawsuit asks for a halt to the pipeline and that US Nitrogen and the IDB pay for Old Knox's attorney's fees. It also asks that the IDB and US Nitrogen pay Old Knox for "all damages sustained as a result of the defendant's wrongful actions."
The suit does not ask for a specific dollar amount in damages.
Neither Greene County Mayor Alan Broyles nor Jerry Laughlin, attorney for the IDB, had been informed of the lawsuit before Friday. Both declined to comment on the suit itself.
Broyles, whose term is about to end, chairs the IDB. Incoming County Mayor David Crum will chair the board until Jan. 1, 2015, at which time Greeneville Mayor W.T. Daniels will chair the board.
Laughlin said the chair of the joint board alternates between the Greene County and Greeneville mayors from year to year.
Old Knoxville Highway Utility District Interim Manager Jonathan Stepp declined comment Friday morning.
US Nitrogen Plant Manaer Justin Freeark issued the following statement in response to the lawsuit:
"US Nitrogen recently received notice that the Old Knoxville Highway Water Utility District has filed a lawsuit against US Nitrogen and the Industrial Development Board of the Town of Greeneville and Greene County, Tennessee (IDB), in the Chancery Court of Greene County. US Nitrogen has not yet had an opportunity to analyze the complaint, has not conferred with the IDB, and therefore, is not in a position to comment on the merits of the lawsuit.
"US Nitrogen is surprised and disappointed that Old Knox felt it had to pursue this course of action. We have been in discussions with Old Knox and other local utilities for two years to attempt to find a complete solution for both a guaranteed high-volume, consistent water supply and an outlet for the outflow from our facility.
"Old Knox provides only potable water, or drinking water. Non-potable, untreated water is better suited for US Nitrogen's industrial purposes. US Nitrogen needs significant volumes of water to operate its facility around the clock, year-round. US Nitrogen will continue to obtain all potable water from Old Knox.
"US Nitrogen remains committed to the pipeline project, which will be a community asset owned by the IDB to attract new industry, jobs and economic impact to Greene County."