20070812 Ver 2_Why Perdue's proposed Yadkin River takeover is so flawed_20091008

Dorney, John
From: Massengale, Susan [[e-mail]]
Sent: Thursday, October 08, 2009 10:31 AM
To: [e-mail]
Subject: Why Perdue's proposed Yadkin River takeover is so flawed
Attachments: ATT00001.c
From the Charlotte Observer
Why Perdue's proposed Yadkin River takeover is so
flawed
From Rick Bowen, president of Alcoa Energy:
When Gov. Bev Perdue decided to pursue an unprecedented government takeover of Alcoa Power Generating
Inc.'s hydropower operations along the Yadkin River, she ignored the recommendations of experts in her own
state agency, disregarded the actions of the N.C. General Assembly and refused to listen to the citizens who will
be most impacted by a takeover.
Instead, she asked the Federal Energy Regulatory Commission to toss aside its own rules and regulations and
recommend a government takeover of the Yadkin Project.
Nothing like that has ever been done before... at least not in America.
Gov. Perdue's quest to take our private property stands in stark contrast to the actions of the General Assembly,
which rejected takeover legislation this year, and the N.C. Department of Environment and Natural Resources,
which studied our operations and in 2007 signed the Relicensing Settlement Agreement supporting a new
license for the Yadkin Project.
From the beginning, Gov. Perdue has turned a deaf ear toward the citizens most involved in this process,
including homeowners, recreational users, business groups, environmental groups and others who spent years
negotiating a relicensing settlement agreement with APGI that offers substantial benefits to North Carolina.
She has dismissed the recommendation of FERC staff that our license should be renewed.
And she ignored the concerns of interested citizens, including grassroots groups such as the N.C. Property
Rights Coalition, who have expressed concern that this takeover will set a dangerous precedent that could
impact private citizens and small business owners. You have to believe it will affect the way other business
owners look at North Carolina, too.
I wish I could ask Gov. Perdue why she is so intent on taking our business. But she has refused to meet with me
and others from Alcoa.
So I can't ask her why she conveniently omitted or distorted our history of environmental stewardship and
community support. I can't explain that her actions reflect a clear misinterpretation of the Federal Power Act.
And I can't point out the glaring errors in her filing.
For example, Gov. Perdue's projections estimate $2.8 million a year for operating and maintenance expenses -
but fail to take into account any expenses associated with project land management, depreciation, other
contracted costs, power substation and transmission, and general administrative expenses. Those expenses add
an additional $11 million a year to the operating costs, meaning Gov. Perdue has underestimated operating
expenses by almost 400 percent.
She also estimates it will cost $24.1 million to acquire the Yadkin Project. Even if a government takeover were
possible, the price must reflect the updated cost of Alcoa's net investment ($91 million), plus severance
damages that could add hundreds of millions of dollars to the cost.
Gov. Perdue argues that North Carolina must "secure a greater degree of control over the water supplies within
its own borders." If so, then shouldn't the same rules apply to all rivers in North Carolina and all private hydro
operators?
But this battle isn't about protecting the North Carolina's water supplies; it's about taking government control of
a private business.
Susan Massengale
Public Information Officer
DENR- Division of Water Quality
1617 MSC, Raleigh, NC 27699-1617
[phone]; fax [phone]
Please note: my e-mail address has changed to [e-mail]
E-mail correspondence to and front this address nzav be subject to the
North Carolina Public Records Lmi, and tncty be disclosed to third parties.