20070812 Ver 1_Alcoa Response_20070824

~,I..CC3~
August 24, 2007
Alcoa Power Generating Inc.
Yad#cin Division
PO Box 576
Bailin, Month Carolina 2801)9-0576
Tel: [phone]
Fax: [phone]
www. alcoa.comlyadkin
Mr. John Dorney
North Carolina Department of Environment and Natural Resources
Division of Water Quality
2321 Crabtree Blvd
Raleigh, NC 27604
Re: Proposed Condition in 401 Water Quality Certification for FERC Project No. 2197
Yadkin Hydroelectric Project Na. 21.97
Stanly County
DWQ # 2007-0812
Dear ~Ir. Dorney:
Thank you for your August S, 2007 letter an behalf of the North Carolina Division of Water
Quality (DWQ) regarding Alcoa Power Generating Int.'s {APGI) application for Clean
Water Act (CWA) Section 401 certification of its Yadkin Hydroelectric Project, and for the
opportunity to respond to the points raised therein. APGI appreciates the time and effort that
you and other DWQ staff have invested in the relicensing of the Yadkin Froject and the
negotiation of the Yadkin Relicensing Settlement Agreement (RSA), As you may recall, the
Yadkin RSA was filed with the Federal Energy Regulatory Commission (FERC) on May 7,
2007 as an offer of settlement of the relicensing issues on behalf of APGI and twenty-two
other settling parties, including the North Carolina Department of Environment and Natural
Resources. Qne non-settlar, the City of Salisbury, provided comments to DWQ on APGI's
certification application via a July 1 &, 20071etter urging DWQ to condition APGI's
certification on the implementation of certain flooding and. sediment mitigation measures,
among other things. APGI agrees that many elements of the RSA, such as reservoir levels,
minimum flow releases and water quality improvements, are appropriately addressed in
DWQ's certification. APGI also agrees with DWQ's tentative conclusion that flooding is not
a 401. issue because flooding has never "interrupted water supply use" and the effects of
flooding are a property damage issue and not a water quality issue. However, for the reasons
outlined below, APGT respectfully disagrees with DWQ"S tentative conclusion that
sedimentation is a certification issue far the Yadkin Project.
1. DWQ Lacks Authority under the CWA to Certify Compliance with CWA Standards
at the Salisbury Public Water Supply Intakes
Section 401 of the CWA specifically allows States to certify whether "discharges" from.
federally-licensed projects like the Yadkin Prajeet will comply with State water quality
standards. The Salisbury intakes axe approximately l9 miles upstream ofthe nearest point of
discharge at the Yadkin Pro}ect, i.e., the tailrace afthe High Rock. Dam, and there is no

finding by DWQ that the disch affects that upstream sedimentation. Rather, DWQ cites
a finding by USG5 that posits that the pretence of the dam has "likely" caused an increase in
sedimentation at the upper end of High Rock Reservoir to a degree that the USGS analysis
does not attempt to define. Furthermore, DWQ staff stated at Yadkin relicensing meetings
that they would only address water quality impacts at the tailraces {such as certain dissolved
oxygen issues which were part of the RSA negotiations and are appropriately addressed in a
certification). APGI agrees with that DWQ staff interpretation of DWQ's responsibilities and
concurs that certification conditions for hydroelectric projects should be focused on water
quality issues at the tailraces.
2. DWQ Has Not Identified a Specific State Water Quality Standard That Has Been
Violated
Your letter refers generally to the "water supply use lay the City of Salisbury" without
referring to a particular State standard that DWQ asserts has been violated because of the
operation of the Yadkin Project. Gl has reviewed the water quality standards adopted by
North Carolina pursuant to the CWA and does not believe that they lend themselves to
application against a downstream hydroelectric project that has not added any pollutants to
the waterbody.
3. DWQ Has Not Identified When or How a Specific State Water Quality Standard Has
Been Violated
As in the case of flooding, sedimentation has never "interrupted water supply use". No
evidence is presented in your letter to indicate that the deposit of sediment in the Yadkin
River -whether because of the presence ofthe dam or any other of a number of well-
documented natural processes and manmade obstacles - at ar near the Salisbury's facilities
has actually caused a violation of North Carolina's water supply use standard or standards. ~
Furthermore, neither ofthe USES findings you cite in your letter concludes that the
presence or operation of Yadkin's Project has caused any violation of any standards. Finally,
your letter states that "sediment deposition. resulting, at least in part, from the presence of
High Rack dam can remove the use ofthe water for water supply since the sediment could
make the intake inoperable..." (emphasis added). APGI believes this speculative finding
does not provide the basis far certification conditions.
4. DWQ Is Currently Relying on a Draft Report by the 1.J.S. Geological Survey that
Does Nut Evaluate the Most Current Information to Support a Sedimentation Article
in its Certification
The June 24, 2QQ7 draft l7SGS report does not list APGI's most recent filing addressing
sedimentation, narnety its "Answer and Reply Comments of Alcoa Power Generating Inc to
Comments, Recommendations Ternzs and Conditions, and Prescriptions Filed In Response
to Notice Cif Application Ready For Environmental Analysis" (filed with FERC on June 25,
284`7), in its list of references.
5, DWQ is Currently Relying on a Draft Report. by the U.S. Geological Survey that
includes Technical and Logical Flaws in it Summary and Recommendations to
Support a Sedimentation Article in its Certification
Your letter refers to the "uncertainties in the models used and the analysis thereof', which
APGI believes provides a sufficient justification for the State to forgo proposing
1 AT~GT is unaware of any case in whiclY the City of Salisbury has been unable to provide its eitizea~s with
drinking water meeting State standards because ofthe quantity of sedim+ait near its intakes.

certification conditions for upstream sedimentation issues. The State has an affirmative
obligation to find conclusively that a certification condition for sediment is technically
warranted before applying license conditions that will impose costs on APGI.
While the USGS study is generally well presented, its conclusions do not seem to follow the
analysis in the body of the report. Gur specific concerns with USGS's findings include the
following:
{a} Under Purpose and Scope (USGS p. l }, USGS states that the objective of the
study was to "clearly demonstrate that the presence of High Rock Dam has led to an
increase in water levels at Salisbury facilities.... [or] has not had an effect...". USGS later
states (USGS p.12, bullet 1) that the "actual increase in sediment deposition in the reach of
the Yadkin River between High Rock Dam and RM 19.4 attributed to the presence of the
darn cannot be determined from Copeland's results." Also, in its Summary and
Recommendations, USGS states that "the degree to which the dam and changes to the
bathymetry have affected flood levels... relative to the pre-impoundment conditions is open
to dispute..."(page 14, bullet 3). Taken together, these USGS statements mean that it is not
clear that the Dam has led to an increase in water levels, therefore the objective of the USGS
study has not been ar could not be achieved.
(b) USGS found that the Stone and Webster conclusion that "the water level at RM
19.4 was independent of the lake level at High Rock Darn," was "reasonably supported"
(USGS p. 5). USGS also found that F>?RC"s modeling conclusions "'were essentially the
same as far Starve and Webster" (USGS p. 9). However, in its Sunnmary and
Recommendations (USGS p.14, bullet 2), USGS only cites the results of the Hazen and
Sawyer report, which found an increase in the water levels due to the presence of the dam,
without referring to the contrary findings of the Stone and Webster or FERC report results.
(c) USGS found that the Hazen and Sawyer report was "poorly documented" (USGS
p. 14) and not "calibrated ar compared to observed conditions", but then concludes that it
"seems to indicate ... increased water elevations" (USGS p. 14, bullet 2). Such a conclusion
can not be reached without fully understanding how the model was put together, what
assumptions were rrzade, and without confirming the validity of the model in comparison to
observed data.
(d) Throughout the report, USGS emphasizes that there has not been a no-darn
condition modeled to determine the effects of High Rack Dam. vez-sus what could have
happened under natural conditions. Yet later USGS states (USGS p. 14, bullet 5) that the
Copeland report "provides a good understanding of the expected growth. of the sediment
delta in the upper end of High Rock Lake". Without "no-darn" modeling this expected
growth cannot all be attributed to the presence of the Dam-in fact, the size of the sediment
delta may be no different than what would have occurred had the Dam never been built.
If DWQ elects to propose certification conditions for sedimentation in spite of the legal and
technical problems summarized above, APGI notes that it is a matter of public record that
APGI and the City of Salisbury have entered into a series of binding carnracts that define
our respective responsibilities with regard to dredging and sedimentation around the City's
drinking water intakes. In those comracts, the City has agreed to forego holding APGI
responsible for any sedimentation around its intakes. Yet, notwithstanding the lack. of any
legal obligation to do sa, as DWQ Hates in its letter, APGI, through a contract with Carolina

Sand Inc., a local dredging operation, has arranged to keep the area around the intakes
clear.2 To the extent that DWQ chooses to propose sedimentation language in its
certification, it should be consistent with those existing contracts in order not to frustrate
those agreements or otherwise interfere with the private arrangements between. the parties
regarding sedimentation issues. Those agreements are attached as Attachments 1 and 2.
'Dank. you again for your willingness to solicit APGI's thoughts on DWQ's tentative
certification findings far the Yadkin Project. APGI is willing to continue to work with DWQ
on a certification that is grounded in good science, reflects the findings in the Yadkin
relicensing record and is consistent with the RSA. 3
Sincerely,
~,~~ -
William Bunker
V.P. APGI Hydra Operations
Attachment 1: Alcoa Salisbury Agreement October 1927
Attachment 2: Alcoa Salisbury Agreement July 1969
cc without attachments:
Gene EIlis, APGI
D. Randall Benn, LLGIvI
Jim Mead, DWR
Marc Bernstein, NC AG
Darlene Kucken, DWQ
Matt Berhardt, SRU
Randall Tinsley, Brooks, Pierce
2 To our knowledge there has only been one instance in We seventy-year history of the Yadkin Project when
the intakes were suflcentiy clogged to require additional cleaning, and that event required only a few hours of
City employee tune to remedy and did not cause a failure by floe City to provide potable water meeting all Slate
standards to its citizens. (Personal. commamication betweeaa Salisbury Regional Utilities staff and APGI stain.
'In the alternative, it appears that DWQ may have already waived its certificatioaa authority in this proceeding.
APGI filed its application for CWA 441 certification with DWQ on May !t), ZOb7, and your letter is dated
August 8, 2447. DWQ`s regulations are clear that, subject to certain exceptions which do not appear io be
applicable here, all applications far certification shall be ganted or denied within 60 days after receipt at the
offices of the Director in Raleigh (see iSA NGAC 42H .450?'). APGI reserves its right to raise any and all legal
arguments in the evetat that. it deems an appeal of a final certification is necessary.