20070812 Ver 2_Alcoa faces more hurdles_20101203

Dorney, John
From: Hennessy, John
Sent: Friday, December 03, 2010 1:11 PM
To: Dorney, John
Subject: FW: And More Alcoa ...
Attachments: ATT00001..c
So according to these articles, it was Duke students who helped reveal the emails. Huh...... nuff said.
From: Massengale, Susan [mailto:[e-mail]]
Sent: Friday, December 03, 2010 12:39 PM
To: [e-mail]
Subject: And More Alcoa ...
From the Davidson Co. Dispatch
Alcoa faces more hurdles for relicensing
Published: Thursday, December 2,201o at 3: o6 p.m.
The decision by the N.C. Division of Water Quality to revoke Alcoa Power Generating's water quality
certification muddies the water on the company's efforts to gain a new 5o-year license from the
federal government. Alcoa's license expired two years ago, but the Federal Energy Regulatory
Commission has issued yearly contracts as the relicense application has been delayed. First, FERC
was awaiting the state's approval of a water quality certificate. Although the certificate was issued,
legal challenges ensued. Then the state challenged Alcoa's relicense attempt and sought to regain
control of the Yadkin River, its lakes, including High Rock and Badin, and four dams.
Reaction to the Division of Water Quality's decision was predictable. Alcoa opponents, including the
Yadkin Riverkeeper and Davidson County elected officials, expressed support for the state's decision.
Alcoa officials promised to contest the revocation. So the latest chapter in the continuing saga really
provided more of the same, another step in the legal process and split reactions from proponents and
opponents of Alcoa.
The state's charge is certainly a serious one: that Alcoa deliberately fudged data in an attempt to gain
the water quality certificate. DWQ officials cite a-mails that were submitted as evidence before an
administrative law judge, who is hearing Stanly County's challenge to the initial issuance of the water
quality certification. The issue in question involves how much dissolved oxygen was present in the
water. The state's interest is justified, since too little dissolved oxygen can be disastrous to aquatic life.
Alcoa responded by saying the a-mails were taken out of context, a typical defense when supposedly
smoking-gun a-mails surface in controversial cases (such as global warming). Company officials also
cited efforts that are under way to improve water quality and said those efforts weren't given enough
time to measure their success.
The situation touches on many issues that produce strong reactions: Should a private company have '
control of public waters? Can the state take away a private company's assets? Have past Alcoa
practices (it ran an aluminum smelter on Badin Lake for many years) polluted the water? Is the
company a good corporate citizen or a large business simply attempting to maximize its profits?
One thing is for certain: All the various state parties now appear to be in alignment against Alcoa,
where previously some division seemed to be present between the different parties. This could make
gaining the water quality certification even more difficult for Alcoa. The final decision may still rest
with the courts, but a resolution to the ongoing uncertainty seems as distant as ever.
Copyright © 201o The-Dispatch.com - All rights reserved. Restricted use only.
Winston Salem Journal
Alcoa lawyers study options after loss of certificate
By Travis Fain I SPECIAL TO THE JOURNAL
Published: December 03, 2010
» 0 Comments I Post a Comment
nowBUZZ Up!
RALEIGH
The next move in the permitting saga surrounding Alcoa Inc.'s push to keep operating power-generating dams
along the Yadkin River belongs to the industrial giant. It must decide how to proceed now that the North
Carolinahas yanked the company's water-quality certificate.
And though the company is likely to appeal the state's decision, the details of how it will do so remained
unclear yesterday.
The state on Wednesday revoked the water-quality certificate it granted to Alcoa in 2009. The company needs
the certificate if it wants to win a new, 50-year federal license to operate the four dams along the Yadkin. The
certificate was pulled after the N.C. Division of Water Quality regulators saw several a-mails to and from a
company consultant that led them to believe Alcoa hasn't told the whole truth about its water-quality
operations.
State officials said that based upon the e-mails, they fear that Alcoa's operations might result in lower oxygen
levels downstream, a potential problem for fish and other wildlife. Alcoa officials said yesterday the a-mails
were not material to the final series of agreements that led the state to issue the certificate. They also said they
were dealing with concerns about levels of oxygen in the river.
The certificate the state had issued already was in question. Stanly County and the Yadkin Riverkeeper have
been trying to block Alcoa from moving forward with its effort to win a new federal permit. They have
questioned the company's commitment to keeping the river clean, noting that Alcoa makes millions of dollars
from power generation while no longer providing the jobs it used to. The company's aluminum-smelting plant in
Badin closed in 2002.
A hearing on the water-quality certificate that had been moving through the N.C. Office of Administrative
Hearings will be put on hiatus and will likely be combined with Alcoa's eventual appeal, Senior Administrative
Law Judge Fred Morrison Jr. said yesterday.
Alcoa's lawyers are studying the issue and its legal options, and verifying whether the state accurately laid out
the company's options this week in a formal revocation letter, company spokesman Mike Belwood said
yesterday.
That letter said Alcoa can request a new water certificate - starting a new review that could take up to a year
- or appeal the repeal of the existing certificate through the Office of Administrative Hearings.
The state's decision is a blow to Alcoa's relicensing push, a federal process that hinges in part on getting the
state water-quality certificate.
"They misrepresented the performance of the turbine improvements they proposed," Susan Massengale, a
spokeswoman with the water-quality division, said in an e-mail.
"We and other programs don't have the resources to engineer every solution and perform all monitoring," she
said. "We rely on the permitted entities conducting business in a straightforward way."
To regain its certificate, Massengale said, Alcoa needs to provide "an accurate presentation of the capabilities
of a proposed system that would meet water- quality standards."
ctfain(cD-vahoo.com
Duke Law News
Judge suspends hearings after favorable development for clinic client
Dec 01, 2010 1 Duke Law News
Print 1 Fac,bcx* I Twitter 1 Share
Testimony has been suspended in a long-running court case in light of a major development favorable to a Duke Law
clinic client: revocation of the certification the client had sued to overturn.
On Dec. 1, the North Carolina Department of Environment and Natural Resources (DENR) revoked a certification
essential to Alcoa Power Generating, Inc.'s renewal of a 50-year license to operate dams on the Yadkin River.Duke's
Environmental Law & Policy Clinic has been working for two years on behalf of their client, Yadkin Riverkeeper, to
convince the state to deny Alcoa the certification.
Testimony and a-mails introduced by Clinic Director Ryke Longest and the other lawyers working on the case
persuaded DENR to issue the Dec. 1 letterofficially revoking the certification they granted in May 2009, over the
objections of Yadkin Riverkeeper and others. In the letter, DENR Division of Water Quality Director Coleen Sullins cites
testimony that, she writes, clearly shows that Alcoa "intentionally withheld information material to determining the
project's ability to meet the state's water quality standards for dissolved oxygen."
Administrative Law Judge Joe Webster has been presiding over hearings regarding the certification since September.
Longest and clinic students from the Law School and Duke's Nicholas School of the Environment have prepared and
presented legal and scientific arguments to show that the state violated the Clean Water Act and the North Carolina
Environmental Policy Act and the state's rules in granting the certificate.
"Under the Clean Water Act, the State of North Carolina has a responsibility to restore degraded waters, such as those
found in the Yadkin River basin," said Longest.
Longest told clinic students about the letter during their last class of the semester.
"I'm excited the students have had the opportunity to participate in these hearings and see how that process can
bring the truth to the fore," Longest said. "We've been working on the issue for two years, but I'm especially excited
for the eight students who worked on this case for Yadkin Riverkeeper this semester. They all had an opportunity to
do meaningful work, and to have a favorable development like this on the last day of the semester is a rare
opportunity."
In addition to mastering the specific issues involved in the case and helping him prepare for the hearing, Longest said
he was pleased that students had an opportunity to observe the courtroom style of other seasoned trial attorneys who
also worked on the case, such as Thomas N. Griffin III from Parker Poe, and Jim Conner from Ragsdale-Liggett.
"Students learned a lot about professional courtesy, about the importance of developing a rapport with everyone in
the courthouse, and about patience, especially when dealing with public records requests," Longest said.
Webster heard arguments on Sept. 10 from all parties on each party's motion for summary judgment. Third-year
students Adrian Broderick, Greg McDonough and Andrei Mamolea appeared on behalf of Yadkin Riverkeeper under
Longest's supervision. They presented portions of the rebuttal on behalf of the Riverkeeper.
"We have had a lot of exposure to both trial preparation and the unpredictability that arises when you take all that
preparation to court," said Broderick. "It has been exciting to watch the trial progress and to participate as new issues
arise."
On Sept. 15, Judge Webster issued an order denying all party's motions for summary judgment, and hearings on the
recertification began on Sept. 27. Later on, students Hillary Bunsow and McDonough examined witnesses on direct
examination.
After DENR's letter was issued, Judge Webster adjourned court testimony until January. In the interim, Alcoa will
decide its response to the revocation.
"The opportunity to argue a motion in court, examine witnesses, and watch as a trial unfolded was exciting -- nerve-
racking even," McDonough said. "More importantly, though, I was able to implement trial strategies that we discussed
over the semester and receive feedback on my performance. You can learn a lot in a classroom, but practical
experience is where skills are built."
Independent Weekly
Big setback for Alcoa in battle for the Yadkin River
Posted by Bob Geary on Thu, Dec 2, 2010 at 6:38 PM
The battle is a long way from over, but if you were making odds in the battle between Alcoa and the Perdue Administration, Alcoa's got
a lot worse yesterday and Gov. Bev Perdue's odds would look pretty good except for the fact that if she gets what she wants from
Washington and the state is allowed to recapture (the legal term) Alcoa's water rights on the Yadkin River, North Carolina will have to
compensate Alcoa for what its dams are worth - and the state presently has no money, honey.
That said, Alcoa's road to relicensing is suddenly looking a lot longer ... and the longer this plays out, the better the chance that North
Carolina's revenues will rebound and the needed cash will materialize in Perdue's accounts.

You will recall that Alcoa's APGI subsidiary wants the federal government to renew - for another 50 years - the license under which
the corporation operates four dams, four hydropower plants and a string of water-supply reservoirs on the Yadkin River.
You will also recall that Stanly County, the Yadkin Riverkeeper and Gov. Perdue since she took office have been fighting Aloca tooth
and nail, arguing that:
(1) the only reason Alcoa was allowed to install the hydropower plants in the first place (which, in effect, gave it control of the river) was
so it could supply cheap electricity to a big aluminum smelter in Stanly County, but the smelter and the hundreds of jobs that went with
it are now kaput; and
(2) in the course of running the plant and the dams, Alcoa polluted the Yadkin but refuses to own up to the damage it's done.
For background, see our story "Give Back the Yadkin Dammit" of a year ago. State officials tell us it will be another year or more
before FERC, the Federal Energy Regulatory Commission, rules for or against Alcoa's relicensing application. But a key element of the
application is supposed to be Alcoa's compliance with all relevant state water quality regulations.
As of yesterday, it isn't - The state Division of Water Quality, part of the Department of Environment and Natural Resources, revoked
Alcoa's so-called 401 water quality permit, saying Alcoa withheld key evidence when it sought the permit.
The News & Record of Greensboro has a post up with more background, including DWQ's statement and Alcoa's response; you can
view it here.
The actual DWQ revocation notice is worth reading for what it says about the evidence withheld by Alcao. You can read it here:2010-
01-10 APGI Revocation Notice.pdf
Finally, the Yadkin Riverkeeper, Dean Naujoks, was exultant:
This is a major step but we still have a long way to go, so watch for further developments on this topic. However, this decision opens the
doors to pursue many of the other issues facing the Yadkin River such as full-scale environmental clean up/remediation of the site and
River, as well as leveraging millions of dollars in water quality improvements for the Yadkin.
Taking on hard issues is always a gamble but the rewards can be far greater and the effort can accomplish more for our environment
than less-controversial issues could ever hope to. Your continued support of our efforts is vital to our success; please consider a
donation to Yadkin Riverkeeper so we can work to further protect and preserve this essential natural resource for future generations.
Some things-like clean water-are worth fighting for. And sometimes David actually beats Goliath!
The Riverkeeper's website is chock full of background as well. Naujoks' full statement is copied below the fold.
Dean Naujoks' statement:
Dear Friends,
I am very pleased to announce that we won our 401 Water Quality Certification case, Yadkin Riverkeeper and Stanly County vs. NC
Department of Environment and Natural Resources and Alcoa! Alcoa's house of cards literally crumbled in the court room when it was
revealed (through emails that were found in the discovery phase) that Alcoa lied to the NC DENR, claiming that dam upgrades would
actually comply with water quality standards for dissolved oxygen. The state could no longer comfortably stand with a global polluter
like Alcoa, testifying they would not have approved the 401 water quality certification had they known this.
This was an amazing team effort such as I have never seen before with a coalition of strong minded people aligned at this special time
and place to prevail on this important issue. Simply amazing! The media has really jumped on this story as well: NPR, the Associated
Press, Business Week, and many more (links below).
This result is better than an actual ruling in our favor because NC DENR no longer supports ALCOA. Instead of Alcoa dividing and
conquering state agencies (the Governors office vs. NC DENR), Alcoa has been divided and conquered. The state has abandoned them
and can now work together with the Governor's and Attorney General's offices plus the Department of Justice, making this issue
politically safe to support and the right thing to do. For a while we were on an island by ourselves but now the state will likely seek our
help in defeating Alcoa!
All relicensing stakeholders can and should legally withdraw from the original agreement because Alcoa lied and violated the terms of
the agreement. This evidence will now be presented by the state as a unified front to FERC, as evidence to deny Alcoa's request for the
bigger 5o-year FERC license and support our efforts to legally "recapture" the Yadkin River for the citizens of North Carolina. If we are
successful with federal recapture (for the first time in U.S. history,) this victory will have been a turning point.
We are extremely grateful for the consistent and continuing input of our partners in this fight, officials in Stanly County along with Ryke
Longest and the students of Duke University Environmental Law & Policy Clinic, without whom we could not have reached this point.
The sincere interest on the part of members of Yadkin Riverkeeper has also been key in inspiring us and supporting us in this effort.
This is a major step but we still have a long way to go, so watch for further developments on this topic. However, this decision opens the
doors to pursue many of the other issues facing the Yadkin River such as full-scale environmental clean up/remediation of the site and
River, as well as leveraging millions of dollars in water quality improvements for the Yadkin.
Taking on hard issues is always a gamble but the rewards can be far greater and the effort can accomplish more for our environment
than less-controversial issues could ever hope to. Your continued support of our efforts is vital to our success; please consider a
donation to Yadkin Riverkeeper so we can work to further protect and preserve this essential natural resource for future generations.
Some things-like clean water-are worth fighting for. And sometimes David actually beats Goliath!
Sincerely,
Dean Naujoks, Yadkin Riverkeeper
Susan Massengale
Public Information Officer
DhNR Division of Water Quality
1617 MSC, Raleigh, NC 27699-1617
[phone]; fax [phone]
Please note: my e-mail address has changed to susan.massengale cr ncdenr.gov
E-mail correspondence to and.1rom this address may be subject to the
North Carolina Public Records Lmv and may be disclosed to third parties.