OLYMPIA, Washington (From news reports) -- The state Department of Ecology has fined the Port Townsend Paper Corporation $734,000 for improperly operating its onsite wastewater treatment system since fall 2025 and violating other water quality requirements, resulting in increased pollution going into Port Townsend Bay.

Since 2021, Ecology has issued five water quality penalties to Port Townsend Paper for releasing tens of thousands of gallons of improper or inadequately treated wastewater into the bay.

"Unfortunately, Port Townsend Paper has struggled to meet the requirements of its water quality permit and properly operate its wastewater treatment system," Peter Lyon, who oversees Ecology's Industrial Section, stated in a news release. "A well-maintained, fully operational treatment system is critical to protecting the environment and the public."

These latest violations occurred at a lagoon system known as the "aerated stabilization basin." In the lagoon, oxygen is added to the wastewater to promote growth of aerobic microorganisms that help clean the water before it is released into Port Townsend Bay.

During an inspection in October 2025, Ecology warned the facility that the treatment system was not being properly operated and maintained, and staff documented the problems in the associated February 2026 inspection report. Sludge was filling up the ponds and vegetation was growing on the banks, reducing their effectiveness, while portions of the aeration system were malfunctioning or had been removed.

Those issues came to a head in April 2026, when two spills totaling 9,000 gallons of black liquor -- a corrosive product of the pulping process -- were sent to the wastewater lagoon, compromising the system's ability to fully treat the wastewater, Ecology stated in the news release.

The black liquor was diluted and partially treated in the lagoon, but it led to the mill violating discharge limits in its water quality permit six times in April, Ecology said. The spills were the result of process upsets, resulting in black liquor being released into the treatment system, the agency added.

"Port Townsend Paper is disappointed by Ecology's Notice of Penalty and will appeal," said Brian Peterson, senior vice president of manufacturing for the Crown Paper Group, owner of Port Townsend Paper. "Protecting the environment is a core responsibility of our company. Over the past several years, we have invested more than $8 million in wastewater treatment and environmental improvements to strengthen operations, protect the environment, and support the long-term sustainability of the mill and the community it serves."

The company has 30 days to pay the penalty or appeal it to the state Pollution Control Hearings Board.