BANGOR – The Board of Environmental Protection held an all-day hearing Wednesday, weighing whether limited ecological harm to an individual pond can be balanced by overall benefit to a watershed.

Specifically, the board conducted Maine’s first “use attainability analysis” hearing, a legal process that gives officials the right to relax some aspects of water quality law if they believe it is to the overall social and environmental benefit to do so.

In this case, Great Lakes Hydro America, the company that purchased a majority of Great Northern Paper’s hydroelectric system, asked the state to allow the company to use its dams to reduce water levels on two western Maine lakes below what Department of Environmental Protection officials considered necessary for survival of the lake’s fish and invertebrate populations.

But despite unrefuted biological evidence that proposed draw-downs of 17 feet on Seboomook Lake and 20 feet on Ragged Lake would be ecologically harmful, the board agreed to consider the request because Great Lakes Hydro America’s proposed draw-downs are part of a precedent-setting deal struck with state and federal resource agencies, environmental groups and the Penobscot and Passamaquoddy tribes.

One board member Tuesday called the deal, which also includes agreements related to Canada Falls, Caucomgomoc and several other lakes, “a miracle of negotiation.”

The groups spent the past two years negotiating a settlement, but must now clear several regulatory hurdles before it can be implemented.

First, the state must grant the company a certification of water quality; but since the proposed water levels violate DEP standards, the approval can only be made through the ongoing use attainability analysis process. If the board chooses to grant the certification, it will then have to be approved by both the federal Environmental Protection Agency and the Maine Legislature. Finally, the deal hinges on the company getting regulatory approval from the Federal Energy Regulatory Commission.

Wednesday, the board heard the arguments of the company and 10 other groups that signed on to the settlement as to why this first step, the permit certifying reduced water quality requirements for the next 50 years, should be granted. Essentially, they were asked to prove that it would be impossible to meet the state’s criteria.

The company argued that following DEP rules, which would limit draw-downs to a maximum of 5.4 feet on Seboomook Lake and 4.5 feet on Ragged Lake, is not economically sustainable and would cost the company more than $2 million annually, said David Preble, speaking for Great Lakes Hydro America.

State policy requires that the “structure and function” of natural communities be maintained, which the state typically defines as 75 percent of existing habitat. Presently, none of the shallow-water habitat known as the littoral zone remains when Seboomook Lake is at its lowest level, and 52 percent remains at Ragged Lake, said David Courtemanch of the Maine DEP.

Under the settlement, Ragged Lake would remain the same while Seboomook’s littoral zone at low water would increase to 19 percent of what’s natural – hardly ideal, but a distinct improvement, he said.

However, if DEP takes a hard line on water levels, the company would likely just remove the gates of its dams, allowing the lakes to return to their natural state – just a trickle through the dry lake bed, Preble said.

Following DEP policy to the letter would require the loss of 44 percent of the company’s water storage capacity, while the settlement agreement would take away just 3.3 percent, he said. The more storage is lost, the less electricity could be produced, and the greater the chances of flooding downstream.

Tim Obrey, a state fisheries biologist, added that native trout and landlocked salmon fisheries could not survive the loss of the dams, and that although they need more water, that would be provided by the settlement deal that his agency signed.

And without the dams at Seboomook and Canada falls, introduced white and yellow perch could migrate up the East Branch of the Penobscot to compete with native fish, Courtemanch said, calling the invasives “the worst kind of pollution.”

In addition to the lake levels, the settlement sets a schedule for water releases, designed to protect the shore during loon and duck nesting periods and to provide sufficient water for fish spawning and migration.

“It would be a balancing act,” Preble said.

No one formally opposed the settlement Wednesday, but a coalition of environmental groups and spokesmen from the federal Environmental Protection Agency asked the board not to consider the process as a rubber-stamp of the settlement.

As the first UAA case, this will set precedent, and that precedent should not be that a company can avoid meeting water quality rules based only on a claim that following the law is not “economically feasible,” argued Nick Bennett of the Natural Resources of Maine.

The board likely will take a vote at its Nov. 18 meeting – an extremely truncated process that the board agreed to because the option on a conservation easement that is part of the proposed settlement expires at the end of the year.