20070812 Ver 1_Stanly County Comments_20071113

PARKER POE ADAMS & BERNSTEIN LLP
Thomas N. Griffin, III
Para~er
Telephone: [phone]
Direct Pax: 704.335.9567
[e-mail]
Attorneys and Counselors at Law
November 9, 2007
VIA EMAIL AND CERTIFIED MAIL
Mr. John Dorney
401 Development Unit Supervisor
North Carolina Department
of Environment and Natural Resources
Division of Water Quality
Mail Service Center 1650
Raleigh, North Carolina 27699-1650
john. dorney@ncmail. net
Three Wachovia Center
Suite 3000
40I South Tryon Street
Charlotte, NC 28202-1935
Telephone [phone]
Fax [phone]
www.parkerpoe.com
~;~~~ ~i
~~
~ ~ ~ ~ zoo?
~,OV
t~~tVt~ - t~YAI'FR QUA;_I7Y
;N~T'~AN08 rOD 6Tt?!?PA~"!.ITI_R gRAnlCH
Re: Comments by Stanly County to Section 401 Water Quality Certification
Alcoa Power Generating, Inc. FERC Relicensing Project No. P-2197-0000
Dear Mr. Dorney:
Thank you for allowing Stanly County (the "County") the opportunity to submit
comments on Alcoa Power Generating, Inc.'s ("APGI") request for a Section 401 water quality
certification related to its Federal Energy Regulatory Commission ("FERC") relicensing
application. For the reasons outlined below, the County strongly urges the Division of Water
Quality ("DWQ") to take additional time (as permitted under the applicable rules) to gather and
consider important environmental information related to the potential impact on water quality
from APGI's proposed operation of the dam system. Among other things, critical information is
now being gathered, and current data should be assimilated, to understand fully the potential
impact that the proposed activities may have on Badin Lake (the "Lake") and related water
bodies.
The Lake is an approximately 5,000 acre lake that, as part of the Yadkin Pee Dee basin,
serves as a primary drinking water source and is one of the best @d most frequently used)
fishing and swimming lakes in North Carolina. The Lake is bordered by the former Alcoa Badin
Works facility (the "Plant"), which conducted aluminum smelting operations from
approximately 1915 until mid-2007, and both the Lake and the Plant are located in Stanly
County. During the Plant's operations, wastes containing cyanide complexes and potentially
other materials were disposed of at the Plant property. There is no doubt that historic operations
at the Plant have contaminated the Plant property and have potentially impacted the Lake. See
RCRA Facility Investigation Report ("RFI"), Alcoa Badin Works, Badin, North Carolina,
CHARLESTON, SC
COLL7MBIA, SC
MYRTLE BEACH, SC
RALEIGH, NC
SPARTANBURG,SC
CLT 1085104v4

Mr. John Dorney
November 9, 2007
Page 2
prepared by MFG, Inc. (March 2001). These comments focus on the extent to which DWQ has
and should consider the potential that, in light of the current and historical environmental
conditions, APGI's proposed operation of the dam and Lake system has impacted or may
seriously impact water quality, including the biological integrity of the Lake.
The Relicensing Application
As you know, APGI, awholly-owned subsidiary of Alcoa, Inc. ("Alcoa"), is in the
process of relicensing its Yadkin Hydroelectric Project (FERC No. P-2197) located on the
Yadkin River in North Carolina (the "Project"). APGI is seeking a renewal of its 1958 license
fora 50-year term, the maximum time period permitted by law.l
As part of the FERC relicensing process, APGI applied for a Section 401 water quality
certification from DWQ. Although we have not had an opportunity to review the information
that APGI submitted to DWQ, the County believes that APGI has not provided DWQ with
environmental information about how the Plant's operations may have affected the Lake. The
County has attempted to assemble and supply such information to DENR's Solid Waste Division
and has had several conversations with those officials regarding newly discovered waste sites.
However, we are not aware that any of this information has been shared with DWQ for purposes
of the 401 review. Accordingly, we believe that DWQ has not had the opportunity to evaluate
how the continued operation of the dam system may affect or exacerbate any conditions,
including whether any conditions would render the Lake in violation of the applicable water
quality standards.
For this reason, and the reasons presented below, the County respectfully requests that
DWQ (i) extend its review of APGI's application pursuant to 15A N.C.A.C. 2H .0507(a)(5), and
(ii) seek and evaluate additional information concerning the interaction of environmental
conditions from the Plant and the operation of the Lake and dam systems prior to issuance of any
water quality certification.
' When FERC issued Alcoa the original license in 1958, Alcoa employed over 900 local residents at the Plant and
the electricity generated from the Lake was supposed to be used to power the smelting operations at the Plant. The
situation now is decidedly different -- Alcoa announced the closure of the Plant on or about July 30, 2007, and by
spring 2008, no local residents will be employed by the Plant and the Plant will not require any power to operate.
Rather, Alcoa's request to renew its license is based purely on revenues from the sale of Project electricity (more
than $40 million/year in gross revenues, according to Alcoa's estimates) derived from Alcoa's free use of the
public's waters. The County submits that Alcoa's current relicensing proposal provides little or no benefit to the
citizens of the State of North Carolina that would justify or offset adverse Project impacts to water quality.
CLT 1085104v4

Mr. John Dorney
November 9, 2007
Page 3
The Section 401 Certification
Section 401 of the Clean Water Act (the "CWA") essentially requires that states issue a
"Section 401 water quality certification" for all projects that may involve a discharge to waters
of the United States and that require a Federal permit (including a FERC license). See 33 U.S.C.
§ 1341(a). The Section 401 certification basically verifies that a given project will not degrade
waters of the State or otherwise violate water quality standards. See id. Section 313 of the
CWA, in turn, provides the states with authority to enact water quality standards. See 33 U.S.C.
§1313(a). Finally, the North Carolina Environmental Management Commission has delegated to
the Director of DWQ the authority to issue water quality certifications on behalf of the State of
North Carolina. See 33 U.S.C. § 1341; N.C. Gen. Stat. § 143B-282(1)(u); 15A N.C.A.C. 02H.
0500.
Factors To Be Considered In A Section 401 Certification Determination
In evaluating a Section 401 certification, DWQ must first determine that the proposed
activity does not remove or degrade the existing uses of the surface water and that water quality
standards are met. 15A N.C.A.C. 2H .0506(a) and (b). Following this finding, DWQ must
determine that the proposed activity:
(1) has no practical alternative under the criteria outlined in [the rules];
(2) will minimize adverse impacts to the surface waters based on consideration of
existing topography, vegetation, fish and wildlife resources, and hydrological
conditions under the criteria outlined in [the rules];
(3) does not result in the degradation of groundwater or surface waters;
(4) does not result in cumulative impacts, based upon past or reasonably anticipated
future impacts, that cause or will cause a violation of downstream water quality
standards through the use of on-site stormwater control measures; and
(5) provides for replacement of existing uses through mitigation as described [in the
rules].
See id. at 0506(b). In addition, DWQ's practice, appropriately, is to use the Section 404(b)(1)
guidelines to assist it in evaluating the issuance of a Section 401 water quality certification for
FERC licenses. See Internal DWQ Guidance, "Stream Mitigation for FERC-related 401
Certifications" (January 9, 2007); 33 U.S.C. §1344(b)(1). The United States Environmental
Protection Agency ("EPA") issued such guidelines at 40 C.F.R. 230 et se .
The Section 404(b)(1) guidelines focus on, among other things, the avoidance and
minimization of impacts to waters, and highlight the paramount importance of water quality
CLT 1085104v4

Mr. John Dorney
November 9, 2007
Page 4
standards. They state, for example, that no discharge of dredged or fill material shall be
permitted if it "causes or contributes, after consideration of disposal site dilution and dispersion,
to violations of any applicable state water quality standard." 40 CFR § 230.10(b)(1).2 They also
prohibit the proposed activity if it "cause[s] or contribute[s] to significant degradation of the
waters of the United States." 40 CFR § 230.10(c). "[E]ffects contributing to significant
degradation considered individually or collectively include: (1) [s]ignificantly adverse effects of
the discharge of pollutants on human health or welfare, including but not limited to effects on
municipal water supplies, plankton, fish, shellfish, wildlife, and special aquatic sites; (2)
[s]ignificantly adverse effects of the discharge or pollutants on life stages of aquatic life and
other wildlife dependent on aquatic ecosystems, including the transfer, concentration, and spread
of pollutants or their byproducts outside of the disposal site through biological, physical, and
chemicals processes.... " Id.
The guidelines explain that the evaluation of the effects of each proposed activity must
include, among other things, an analysis of: contaminant determinations (determination of the
degree to which the material proposed for discharge will introduce, relocate, or increase
contaminants) and aquatic ecosystem and organism determinations (determination of the nature
and degree of the effect that the proposed discharge will have on the structure and function of the
aquatic ecosystem and organisms). See 40 CFR § 230.11(d) and (e). For example, the impacts
of the proposed activity on fish, crustaceans, mollusks and other aquatic organisms in the food
web must be considered. See 40 CFR § 230.31(a). The regulatory authority must in particular
consider whether the requested activity "affect[s] the populations of fish, crustaceans, mollusks
and other food web organisms through the release of contaminants which adversely affect adults,
juveniles, larvae, or eggs ...." Id. at § 230.31(b).
The use of the Section 404(b)(1) guidelines as guidance, and their emphasis on potential
biological/ecological impacts, also makes sense in light of North Carolina's own water quality
standards. Badin Lake is classified as a Class WS-IV water with a Class B designation. Under
North Carolina's water quality standards, the "best usage" of Class WS-IV waters means "a
source of water supply for drinking, culinary, or food-processing purposes for those users where
a more protective WS-I, WS-II or WS-III classification is not feasible and any other best usage
specified for Class C waters." 15A N.C.A.C. 2B .0216(1). The "best usage" of Class C waters,
in turn, provides that "[t]he waters shall be suitable for aquatic life propagation and maintenance
of biological integrity ... [and] sources of water pollution which~reclude any of these uses on
either ashort-term or long=term basis shall be considered to be violating a water Quality
standard." 15A N.C.A.C. 2B .0211(2) (emphasis added). Finally, "biological integrity" is "the
ability of an aquatic ecosystem to support and maintain a balanced and indigenous community of
z As you know, the guidelines focus on the discharge of dredged and fill material, which is governed by Section 404
of the CWA. However, their careful evaluation and explanation of how activities can affect aquatic systems, and
their description of the important aspects of those systems, provides valuable guidance for understanding impacts to
water quality in other circumstances, such as those presented here.
CLT 1085104v4

Mr. John Dorney
November 9, 2007
Page 5
organisms having species composition, diversity, population densities and functional
organization similar to that of reference conditions." Id. at .0202(11).3
We note that ecological factors are decidedly relevant in the evaluation of a request for a
401 certification. When imposing conditions on section 401 certificates, states may take into
account a wide range of factors associated with the impact of a proposed use on water quality.
Specifically, in S.D. Warren Co. v. Maine Bd. of Envt'1 Prot., 126 S.Ct. 1843 (2006), the U.S.
Supreme Court held that, in making 401 certifications, states may take into account the effect
of a proposed use on the chemical composition of the surrounding water and its effect on a
species' habitat or reproductive health and on recreational use. Id. at 1853. The Court's
reasoning was based in the idea that the impact of the changes caused by dams on water
quality is a part of the business of states, and that the Clean Water Act's system is designed with
those state concerns in mind. Id. Similarly, in PUD No. 1 of Jefferson County v. Washington
Dept of Ecolo~y, 511 U.S. 700 (1994), the Supreme Court addressed the broad power of states
in this context, noting that states may "place any conditions on a 401 certificate that are
necessary to assure that the applicant will comply with effluent limitations, water quality
standards, ...and with `any other appropriate requirement of state law. "' Id. at 712.
There is no doubt, therefore, that DWQ should carefully review all environmental
information that relates to potential impacts to biological integrity and ecosystems. For the
APGI project, it is precisely this type of water quality information that DWQ must evaluate
before it can issue a thoughtful decision on the proposed Section 401 certification.
The 401 Certification Must Be Delayed To Provide Time For DENR To Evaluate
New And Important Biological And Water Quality Information
The County's review of available information has revealed sources of existing
environmental information that demonstrate the very real possibility that environmental
conditions exist in the Lake system that may be affected by operation of the dams. That existing
information is described in the next section of these comments. This section addresses critical
information that is now being developed that should be considered in the Section 401 review.
That information consists of a new study that will bear directly on whether and how
environmental conditions could impact biological integrity, including important and sensitive
species. The new study will be directly relevant to your decision-making process.
Some consideration of the project's impacts on sensitive species is included in the April
22, 2007 Relicensing Settlement Agreement ("RSA") between APGI and various parties
(including the North Carolina Department of Environment and Natural Resources ("DENR")).
The RSA imposes certain obligations on APGI for the "protection, mitigation and enhancement
of ecological, environmental, recreational and cultural resources affected by the Project under a
s The other affected waters are designated as Class WS-IV, except for a certain portion of Little Mountain Creek,
which has a Class C designation.
CLT ] 085104v4

Mr. John Dorney
November 9, 2007
Page 6
New License." Id. at Section 1.1. For example, one of the proposed license articles in the RSA
requires APGI to develop and implement an approved Rare, Threatened and Endangered Species
Management Plan. See Section 3.6.1. The Plan is required to address the impact of the Project
operations on the bald eagle (Haliaeetus leucocephalus), as well as two other plant species. See
id. Our concern is that this study schedule, to which the County did not agree, will be too late to
allow a proper water quality determination under Section 401, and to allow the imposition of
appropriate conditions in the final certification.
The bald eagle provides a prime example.4 Bald eagles are primarily fish eaters. They
generally can catch fish 6-12 inches under the surface, and they often select dead or floating fish.
See http://www.carolinaraptorcenter.org/b_eagle.php. Usually, they catch fish that have come
through the turbines at a dam; these fish are dazed, dead, or injured and make easy prey for the
eagles. This phenomenon has been noted at the Badin Dam (Narrows Dam) in particular. See
http://www.ncnatural.com/NCUSFS/Uwharrie. In general, bald eagles consume approximately
1-2 pounds offish per day. See http://www/greatriverroad.com/Eagles/eagleSciFacts.htm.
These facts are important for two reasons. First, there is no doubt that the operation of
the dam system can have a critical impact on how the bald eagle gathers its primary food, given
that dams are a favorite hunting ground. Indeed, one source suggests that the Badin Dam
provides a prime location to view the bald eagle for just that reason. See
http://www.ncnatural. com/NCUSFS/LTwharrie.
Second, and critically, planning is now underway to gather vital information about the
Plant's potential impact on fish populations, the same fish that will be affected by the dams and
eaten by the bald eagles. This information is forthcoming, but not yet available. Approximately
two years after the County raised environmental and health concerns about the conditions of the
Lake to Alcoa, and after a recent meeting with DENR to require Alcoa to perform additional
studies of the Lake impacts, Alcoa has apparently agreed to perform a "fish study" of the
potential environmental impacts to the Lake from the Plant's operations. The County
understands that the design and parameters for this "fish study" will be available by November
16, 2007. Once the work plan is approved, Alcoa will presumably conduct the work outlined in
the work plan and make this information available to the EPA, the North Carolina Department of
° Although it was recently "delisted" under the Endangered Species Act, the bald eagle is still a critically important
and protected species. For example, the bald eagle remains protected by the Bald and Golden Eagle Protection Act,
which prohibits the taking of bald eagles within the United States. See 16 U.S.C. 668. Under that Act, "taking" also
prohibits "disturbance," a term that was defined by the Fish and Wildlife Service in June 2007 to mean "to agitate or
bother a bald or golden eagle to a degree that causes, or is likely to cause, based on the best scientific information
available, (1) injury to an eagle, (2) a decrease in its productivity, by substantially interfering with normal breeding,
feeding, or sheltering behavior, or (3) nest abandonment, by substantially interfering with normal breeding, feeding,
or sheltering behavior." 50 C.F.R. 22.3. The term "disturb" is also broad enough to include adverse habitat
modification. 72 Fed. Reg. 31133 (June 5, 2007); Contoski v. Scarlett, 2006 WL 2331180 at * 3 (D. Minn. Aug. 10,
2006). Therefore, although the bald eagle is delisted, the Bald and Golden Eagle Protection Act provides analogous
protection to that afforded under the Endangered Species Act.
CLT 1085104v4

Mr. John Dorney
November 9, 2007
Page 7
Environment and Natural Resources ("DENR") and other interested parties. The "fish study" is
vital to understanding the potential impact of managing the Lake system on species, including
the bald eagle, given that fish movement and management may depend on whether and how fish
populations are impacted by the contamination conditions.
The County submits that DWQ must consider the results of the new fish study in its
evaluation of water quality and its consideration of appropriate conditions for a Section 401
certification. In fact, while evaluating DWQ's decision on certain stormwater permits and how
those permits might affect the Carolina Heelsplitter (an endangered species), a North Carolina
Administrative Law Judge recently held that DENR's:
legal obligation to protect biological integrity necessarily includes the
protection of the most sensitive species within a watershed. Therefore, in
the Goose Creek watershed, biological integrity encompasses the ability of
the watershed to maintain the federally endangered Carolina Heelsplitter
population.
North Carolina Wildlife Fed'n et al v North Carolina Dept of Env't & Natural Res., Div. of
Water Quality, OS EHR 2055 and 06 EHR 0164 at 27-28 (consolidated cases)(March 7, 2002).
Preservation of biological integrity would certainly include protection of the bald eagle and other
species, and the study is therefore essential to evaluating whether the Project will affect water
quality standards.
It also goes without saying that the fish study, and information related to biological
integrity in general, is critical to understanding potential impacts on the human population. The
water quality standards applicable to the Lake require, among other things, protection of uses for
fish consumption and for primary recreational activities involving human body contact with
water on a frequent basis. Given the potential for environmental impacts in the Lake, certainly
these uses could be seriously impacted by operation of the dam system. Indeed, DENR itself
argued in its February 22, 2007 Notice of Intervention and Alternative Motion to Intervene, filed
in APGI's FERC license renewal process, that "[t]he operation of this project may change the
quantity and quality of fish habitat in the river, alter the chemical and physical properties of the
river, affect the recreational opportunities in the river, affect submerged lands to which the State
retains title, etc." DENR Notice at 4. Based on DENR's own beliefs on the potential impact of
the dam, it should certainly wait to review all available information, including the upcoming
"fish study."
In sum, the County submits that the Section 401 certification process must be extended to
permit a review of all environmental information. The outstanding fish study is "information
necessary to the Director's decision" that is "unavailable," thus justifying a delay in the process
beyond the 60 day decision-making requirement. 15A N.C.A.C. 2H .0507(a)(5).
CLT 1085104v4

Mr. John Dorney
November 9, 2007
Page 8
The 401 Certification Also Must Be Delayed To Provide Time For DENR To
Evaluate Existing Information Concerning Potential Contamination Of The Lake
And Its Organisms, And To Evaluate The Need To Gather New Water Quality Data
Moreover, the process must also evaluate other current environmental information that
(we believe) has yet to be considered. As discussed in more detail below, we do not believe that
DWQ has been presented with environmental impacts that the contamination at the Plant and
Lake may have on water quality standards, including the protection of the biological integrity of
the Lake and the safety of the waters for the best uses of the Lake. Again, the potential for
adverse impacts to the Lake and water system from the dam operation, and the appropriate
conditions in a water quality certification, cannot be properly evaluated until this information is
reviewed.
We have provided below a brief summary of the information collected to date, and
presented to DENR in other contexts, that demonstrate potential impacts to the Lake and its
ecosystems. As you will see, the information both identifies current impacts and highlights the
need for additional studies.
A. The Screening Site Investigation of the Alcoa Badin Landfill by the Superfund
Division of DENR in 1991 included an assessment of the aboveground waste pile for the
disposal of spent potliners, furnace bricks and construction debris. Although the investigation
identified only elevated levels of acetone in soil and groundwater, the report noted that the foot
of the landfill ended in an area of seeping water. This water apparently flowed along the path of
an intermittent creek leading to the Lake. The report further explained that the Lake is an
"excellent fishery" for both sport and commercial fishing and "one of the best and heaviest used"
in North Carolina. The Lake reportedly supported approximately 398.26 pounds per acre of fish
and, as of 1980, approximately 69,408 pounds of fish were harvested and consumed per year.
The County estimates that the volume of fish from the Lake consumed by humans has
dramatically increased since the 1980 figures.
B. The March 2001 RCRA Facility Investigation Report ("RFI") prepared by MFG
Inc. for Alcoa provides the sampling data related to environmental impacts to sediment and
surface waters at the Lake. Specifically, the RFI identified the following contaminants in the
sediment in the areas of the Boat Launch and Swimming Cove in the Lake above the EPA
Region III Industrial Soil Risk-Based Concentration: benzo(a)pyrene, benzo(a)anthracene,
benzo(a)flouranthene, dibenzo(a,h)anthracene, indeno(1,2,3-cd)pyrene, Aroclor 1242 and 1260,
and arsenics See RFI at 100 and Table 4-58. No contaminants were detected in surface water
s Alcoa concluded that the concentration of arsenic in the sediments in these areas is not a constituent of concern
because the detected levels were below the levels Alcoa determined to be "background" at the Plant. The County
CLT 1085104v4

Mr. John Dorney
November 9, 2007
Page 9
above the North Carolina 2B standards. The RFI also concluded that benzo(a)pyrene was
detected in the Swimming Cove area sediments at concentrations higher than the screening
values for human health. See RFI at 101 and Table 4-59. Despite the elevated levels of
contaminants in sediments, Alcoa concluded that the impacted sediments would yield acceptable
results regarding human health risk exposure in the swimming area, and (for areas of shallow
impacts in the Boat Launch area) Alcoa basically concluded that the time of contact would be
brief because of the rocky floor bottom and the water washing off sediment. Even if Alcoa is
correct, however, the County submits that potential human exposure is only one piece of a large,
vital puzzle. We are not aware of any review of the information in light of the overall
ecosystem, whether other components of the ecosystem are impacted, and how the operation of
the dam and water system might affect the distribution of those impacts through movement of
organisms or otherwise.6
Moreover, in this time of severe drought, sediments that were at one time at depth are
now undoubtedly much closer to the surface. Other sediments may have migrated to deeper
areas that have not been sampled or otherwise studied. Understanding exposure scenarios related
to the current condition of sediments contaminated by the Plant's operations is critical to
management of the Lake system and the maintenance of water quality/biological integrity.
Finally, the sampling data utilized in the RFI was collected in 1996 and 1997, over ten
years ago. The possible presence of additional impacts to the Lake system since that time must
also be evaluated. The County understands, for example, that Alcoa has been unable to meet the
parameters of its NPDES permit (N00004308) for the Plant. Indeed, DENR recently granted
Alcoa an extension of time (ranging from 18 to 36 months) for Alcoa to meet the discharge
standards in its current NPDES permit for the following parameters: chlorine, cyanide and
fluoride. Accordingly, it appears that the Plant continues to discharge pollutants to the Lake in
excess of its NPDES permit, including for parameters that -based on 10-year old sampling data
- exceed industrial standards in the Lake.
C. The recent Characterization of the Toxicity and Bioavailability of Polycyclic
Aromatic Hydrocarbons in Aquatic Sediments from Badin Lake prepared by Retec (February
2007) assessed the Bioavailability and toxicity of Polycyclic Aromatic Hydrocarbons ("PAHs")
in the sediments of the Lake adjacent to the Plant. The report identified PAHs in sediment that
ranged from 0.23 ppm to 1,690 ppm, and stated that the carbon identified in the samples was
consistent with the emissions from a smelter and carbon plant, and the use of coal at the smelter.
does not know how DENR views either this conclusion or the appropriate standards against which to measure the
results.
s The RFI also identified elevated levels of contaminants in groundwater that the County believes may lead to
adverse impacts on the Lake water quality. Indeed, the five (5) groundwater monitoring wells located downgradient
from the Plant and near the Lake all identified elevated levels of contaminants. The following contaminants were
identified above the applicable North Carolina 2L standards: total cyanide (MW-16, MW-25 and MW-25A);
fluoride (MW-16, MW-25, MW-25A and MW-26) and trichloroethene (MW-16). See RFI at Table 4-59.
CLT 1085104v4

Mr. John Dorney
November 9, 2007
Page 10
The report concluded that the samples collected did not exceed the concentrations at which
benthic aquatic invertebrate would be expected to have reduced survival, and that the toxicity
and bioavailability of PAHs in sediment did not represent a significant source of toxicity to
benthic aquatic organisms. We are not aware of DENR's reaction to this study, and whether
DWQ has considered its bases and agrees with its conclusions. We do note, however, that the
report apparently did not include any sampling or analysis of the potential impacts to the fish
population in the Lake and/or on individuals (including children) who frequently swim and
conduct other water activities in the Lake.
D. There are numerous other Sources of Information that we believe would contain
information relevant to evaluating environmental and water quality impacts to the Lake system
deriving from the Plant. For example, among others, APGI's compliance history with its
NPDES permit (No. N00081947), water quality reports for the Plant, monitoring data for the
Plant, the impaired water status of Little Mountain Creek (which is part of the proposed Yadkin
Hydroelectric Project), litigation records from a suit initiated by Alcoa with respect to insurance
coverage for environmental contamination at the Plant, and the Toxic Release Inventory Reports
for the Plant.
The County's position is well known: Alcoa's record of waste contamination at the
Plant, and its minimal and delayed responses to address such contamination, are directly relevant
to the issue of whether Alcoa (and its wholly-owned subsidiary APGI) would be a fit
environmental steward for the Yadkin Project and would conduct its operations without negative
impacts to the water quality standards of the Lake. The County intends to press its position in
the FERC proceedings, and to ask FERC to assert its full authority to mitigate and improve
environmental conditions at the Project, including Badin Lake.
For the current purposes, it is apparent that there is a lack of a comprehensive (or current)
environmental assessment of the environmental impacts to the Lake from the Plant's historic
operations, and that the absence of complete and adequate information directly impacts DWQ's
Section 401 certification decision. Indeed, the County's view is that, while the situation at the
Plant may have improved (due largely to the shutdown of the facility), the documents already
show an inextricable link between prior operations at the Plant and impacts to the Lake's water
quality that would dictate that the Section 401 certification be conditioned to assure protection of
water quality and biological integrity. Those conditions cannot be properly understood until all
information is considered. Importantly, they also cannot be evaluated until additional
information is gathered concerning impacts to the Lake and the resulting consequences for Lake
management. See 15 A N.C.A.C. 2H .0502(c) and (d) (allowing DWQ to request additional
information and conduct investigations necessary for the proper consideration of the application).
Indeed, it appears that significant remedial work remains to be performed at the Plant. Alcoa disclosed in a lawsuit
against its insurance company in Washington State that the estimated cleanup costs at the Plant would be $50
million. However, to date, it appears that Alcoa has spent only $8 million to investigate and implement remedial
measures at the Plant.
CLT 1085104v4

Mr. John Dorney
November 9, 2007
Page 11
Conclusion
In sum, the County believes it is premature for DWQ to issue a Section 401 water quality
certification based on the current information it has been provided and without fully evaluating
the environmental impacts to the Lake from the Plant's historic operations, including information
from the impending "fish study." Indeed, DENR must review this information to determine if
the identified impacts to the Lake, its aquatic life and/or related species and ecosystems will be
exacerbated by the operation of the dam system APGI is proposing to operate for another 50
years. We would therefore submit that DENR should deny certification at this time or otherwise
hold APGI's application in abeyance, pursuant to 15A N.C.A.C. 2H .0507(a)(5), to allow DENR
additional time to receive and review information necessary to its decision.
The County therefore respectfully requests that DWQ not grant the 401 water quality
certification, and that the process continue as necessary to consider the past and impending
environmental studies and to gather adequate new information related to the agency's decision.
Thank you again for your attention to this matter. Please feel free to contact me if you
have any questions or require any additional information from the County along these lines.
Very truly yours,
l
Tho ~ Griffin, III
Attorne for Stanly County
TNG/cmh
cc: Mr. Jerry D. Myers, County Manager, Stanly County (via email only)
[e-mail]. nc. us
Tom Reeder, Chief, Division of Water Quality (via email only)
tom. reeder@ncmail. net
Paul Rawls, Division of Water Quality (via email only)
paul, yawls@ncmail. net
David. R. Poe, Esq., LeBoeuf, Lamb, Greene & MacRae LLP (via email only)
Counsel for APGI
davidpoe@llgm. com
CLT 1085104v4