20070812 Ver 2_NC House rejects government takeover_20090811

Dorney, John
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From the Yadkin Report
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Massengale, Susan [[e-mail]]
Tuesday, August 11, 2009 3:15 PM
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NC House rejects government takeover of Alcoa property in decisive vote
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N''C I louse rejects go%ernment takeover of Alcoa property in decisive note
RALEIGH - The N.C. House voted in overwhelming numbers to reject an unprecedented and costly government takeover
of Alcoa's hydroelectric business along the Yadkin River in central North Carolina. Senate Bill 967, sponsored by Sen.
Fletcher Hartsell, failed in a floor vote by a wide margin, 66-39, with bipartisan support.
"Legislators sent a clear message that they do not support the taking of private business. The more they learned about this
issue, it became evident that passing this legislation would set a dangerous precedent for North Carolina," said Gene Ellis,
an Alcoa spokesman. "We appreciate the strong support of the N.C. House and remain committed to fighting any future
efforts by Gov. Perdue to take our business against our will."
The bill would have established a state trust with the authority to seize the Yadkin Hydroelectric Project, a privately-
owned business that has been generating clean renewable energy in North Carolina since 1915.
Legislators tried to quickly maneuver the bill through the General Assembly this week after the House Water Resources
Committee reversed itself and voted the bill out of committee. The bill was heard twice Thursday by the House Public
Utilities Committee, which passed the bill at a hastily called afternoon meeting. The bill then bypassed the House Finance
Committee and was sent straight to the House floor.
Opponents of a state takeover - including lakefront homeowners, property rights advocates and local officials in Stanly
County - expressed serious concerns about the proposed takeover this week. Their concerns included the potential cost to
North Carolina taxpayers of $500 million or more; the fundamental violation of Alcoa's private property rights; and the
need to support the federal licensing process and the Relicensing Settlement Agreement that Alcoa reached with
stakeholders.
The Federal Energy Regulatory Commission (FERC), the federal agency that regulates hydroelectric projects in the United
States, has all of the information it needs to issue a new long-term license for the Yadkin Project. FERC staff has already
recommended issuing a new license to Alcoa.
"We remain eager for a new license and look forward to implementing the many positive benefits included in the
Relicensing Settlement Agreement," Ellis said.
Under the terms of the relicensing agreement, Alcoa will continue to improve water quality in the Yadkin River; allow for
increased water withdrawals by local municipalities; better protect the water supply when drought conditions are present;
set aside thousands of acres for long-term land protection; create new parks, public swim areas and other recreation
opportunities; provide more stable lake levels and a consistent downstream flow of water; and give homeowners more
flexibility regarding shoreline development.
Another Viewpoint
Nit state takeover here
High Point Enterprise
August 9, 2009
Thursday's defeat in the N.C. House of a bill to create the innocent enough sounding Yadkin River Trust was not just a
victory for Alcoa Power Generating Inc., it was a victory for every business owner and operator in North Carolina.
In effect, the bipartisan majority of the House said businesses in this state should not have to fear a hostile takeover of
their operations by state government because some state leaders covet the business' profits and operational successes.
Under the guise of protecting and preserving water resources of the Yadkin River - a noble goal for sure - a cadre of local
politicians, property owners and developers and some rabid environmentalists in Stanly and other counties along the river
wanted to use state government's desire for revenue to force a hostile takeover of a private business that had operated here
for nearly loo years.
This plan simply was wrong. That's not to say, however, that Alcoa should have free run to do as it wishes in operating its
series of lakes and hydroelectric dams along the Yadkin, including High Rock Lake and dam in Davidson County.
Alcoa does have a responsibility in seeing that environmental concerns stemming from its closed aluminum smelting plant
in Badin are addressed. Alcoa and others along the river must cooperate in solving water control and environmental issues
that can impact the company as well as people along the river and lakes. And perhaps, it's time for Alcoa Power Generating
to face regulation by the N.C. Utilities Commission - just as Duke Energy and Progress Energy are - and pay higher taxes
and fees to the state for the right to use the public waterways.
Maybe such matters now can be settled more easily because Alcoa doesn't have to fear a hostile takeover attempt by North
Carolina state government.
\i ?)und thc
t I'might Management tot
The Yadkin River has been fortunate to avoid the drought conditions that plagued much of North Carolina last year, but
many homeowners and recreational users want to learn more about how the Yadkin lakes will be managed if and when the
next drought hits.
Background - The Low Inflow Protocol
As part of the Relicensing Settlement Agreement for the Yadkin Project, a new plan for managing water levels during
drought conditions was developed by stakeholders. This plan - known as the Low Inflow Protocol (LIP) - outlines specific
steps designed to minimize the impact of drought.
The Low Inflow Protocol (LIP) is designed to keep as much water as possible in the lakes, while continuing to provide a
steady flow of water to the communities located downstream. Here is an overview of some of the ways the LIP protects the
water supply in the Yadkin River:
• By requiring Alcoa-Yadkin to adjust its operations, reduce its power generation and send only a minimum amount
of water downstream.

• By relying on High Rock Lake, Badin Lake and other large storage reservoirs along the Yadkin-Pee Dee River to
share the responsibility for sending water downstream. If a drought causes water levels at High Rock Lake to drop
below its normal level, water will then be pulled from other reservoirs that are still at or above their normal level.
This concept of proportional drawdowns - where water levels are drawn down equally at multiple lakes - is
designed to share the burden caused by drought and prevent any single reservoir from being unfairly impacted.
• By encouraging voluntary water conservation or requiring mandatory water conservation among municipal and
industrial water users. Conservation requirements will vary based on the severity of the drought.
• By bringing together state and federal agencies, hydropower operators, industrial users, local homeowners and
others to regularly assess and respond to drought conditions. The LIP requires weekly or monthly meetings of the
Yadkin-Pee Dee Drought Management Advisory Group, depending on the severity of the drought.
Managing Drought Conditions Until A New License Is Issued
Alcoa-Yadkin has agreed to adopt many elements of the Low Inflow Protocol to protect our water resources, even though
the LIP will not officially become effective until the company receives a new license from the Federal Energy Regulatory
Commission. Here is a general description of how Alcoa-Yadkin intends to manage water levels at the Yadkin lakes until a
new license is issued:
High Rock Lake: If drought conditions cause water levels at High Rock Lake drop more than six inches below
the "normal minimum elevation" - which is currently 5 feet below full during the summer recreation season -
Alcoa-Yadkin will begin implementing its drought management plan. If drought conditions persist and water
levels at High Rock Lake drop more than 1 foot below the normal minimum elevation, Alcoa-Yadkin will begin to
draw down Badin Lake until the water level at both lakes is roughly equal. From that point forward, water levels at
the two lakes will be drawn down equally on a foot-by-foot basis.
Badin Lake: Water levels at Badin Lake will typically remain in the normal operating range (within 3 feet of full)
until High Rock Lake falls 6 feet below full. If that happens, water levels at Badin Lake will be drawn down until it
is roughly equal to High Rock Lake. From that point forward, water levels at the two lakes will be drawn down
equally on a foot-by-foot basis.
Tuckertown and Falls: These are smaller reservoirs with limited storage capacity. Reducing water levels at
these reservoirs by three feet is equivalent to drawing down High Rock Lake by about nine inches. Therefore, the
water in these reservoirs is typically used only during extreme drought conditions.
You will notice some changes in lake operations after a new license is issued. For instance, one notable difference will be a
change in the "normal minimum elevation" at High Rock Lake from 5 feet below full to 4 feet below full.
Susan Massengale
Public Information Officer
DENR- Division of Water Quality
1617 MSC, Raleigh, NC 27699-1617
[phone]; fax [phone]
Please note: m}v e-mail address has changed to susan.massengale (ii`nedenr.gov
F_-mail corresI)ondence to and fr-orrr this address rrray he sur ject to the
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