20070812 Ver 2_NC revoking Alcoa Certification_20101201 (2)

Dorney, John
From: Massengale, Susan [[e-mail]]
Sent: Wednesday, December 01, 2010 2:56 PM
To: [e-mail]
Subject: Alcoa 401 Certification Revoked release and stories
Attachments: alcoarevoke.doc; ATT00001..c
The press release sent out today is attached.
From Associated Press
NC revoking Alcoa certification for Yadkin dams
By MIKE BAKER
- Associated Press
December 1, 2010 2:29pm EST
RALEIGH, N.C. - North Carolina regulators revoked a key certification provided in Alcoa Inc.'s bid to
operate dams along the Yadkin River, claiming Wednesday that the company intentionally withheld
information.
The North Carolina Department of Environment and Natural Resources said the company failed to disclose
details on the project's ability to meet the state's water quality standards. Officials said that omission came to
light in a hearing about the certification.
"The process of certification relies on applicants submitting accurate and comprehensive information to the
division," said Coleen Sullins, director of the Division of Water Quality. "When they do not, revocation is
warranted."
Alcoa subsidiary Alcoa Power Generating Inc. said in a statement that it never withheld any "material
information." The company plans to immediately challenge the state's revocation.
"We do not believe the state's decision is justified or appropriate," said Rick Bowen, president of Alcoa Energy.
A withdrawal of North Carolina's certification would essentially block Alcoa from getting federal approval in
their contentious bid to operate four dams for up to 50 more years. The state Division of Water Quality initially
approved Alcoa's plans last year on condition that it include a $240 million guarantee that Alcoa make
improvements to its system.
The permit is opposed by a variety of state leaders, including Gov. Beverly Perdue, who hope to regain control
over the dams and the electricity they produce.
Read more: http://www.centredaily.com/2010/12/01/2373714/-nc-revoking-alcoa-certification.html#ixzz16tK9QV3
From the Salisbury Post
Alcoa loses water quality certification
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Wednesday, December 01, 2010 1:40 PM I & Printer friendly version ( ® E-mail to a friend I
Updated Wednesday, December 01, 2010 1:47 PM
Officials with the N.C. Division of Water Quality today notified Alcoa Power Generating Inc. of the revocation of the company's 401
water quality certification, issued in May 2009 for APGI's Yadkin Hydroelectric Project in Stanly County.
This action is being taken after DWQ officials learned APGI submitted an incorrect application and supporting materials for the 401
water quality certification, in that the company intentionally withheld information on the project's ability to meet the state's water quality
standards for dissolved oxygen.
This intentional omission came to light after company a-mails were recently entered into evidence during a hearing before an
administrative law judge involving Stanly County's challenge to the issuance of the 401 water quality certification.
The Yadkin Hydroelectric Project includes High Rock, Tuckertown, Narrows - also known as Badin - and Falls reservoirs. DWQ
officials believed at the time the certification was issued that APGI's application for the certification and supporting documentation
provided adequate assurance that the proposed activities would not result in a violation of state water quality standards and discharge
guidelines.
One of the issues addressed in the certification was concern about the dissolved oxygen levels below Narrows/Badin Lake and High
Rock Lake. Dissolved oxygen is the form of oxygen that is available for support of fish and other aquatic animals.
As currently constructed, the dams pull water from deep in the lake where dissolved oxygen levels are low and then discharges that
water to the river below. As a result, dissolved oxygen levels in the river were not meeting state standards. To remedy this issue, the
401 water quality certification required that turbines at High Rock, Tuckertown, Narrows/Badin and Falls lake dams be modified to
improve dissolved oxygen levels downstream of the dams.
"I was disappointed to learn that APGI intentionally withheld information regarding the critical matter of dissolved oxygen," said Coleen
Sullins, director of the Division of Water Quality. "The process of certification relies on applicants submitting accurate and
comprehensive information to the division. When they do not, revocation is warranted."
Following receipt today of the notice of revocation of the water quality certification, APGI officials have 60 days to either surrender the
certification and file a new application to correct the errors in information previously submitted or to appeal the revocation before the
Office of Administrative Hearings.
From the Winston-Salem Journal
State revokes key certificate for Alcoa Power
Generating Inc.
By Travis Fain
Published: December 01, 2010
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The state's water quality division is revoking a key certificate for Alcoa Power Generating Inc., saying the
company shielded information from regulators who were reviewing the certificate application.
This "intentional omission" came to light during a continuing licensing hearing, when company a-mails were
entered into evidence, according to a statement this afternoon from the N.C. Division of Water Quality.
"The company intentionally withheld information on the project's ability to meet the state's water quality
standards for dissolved oxygen," the division said in the statement.
The company denies this and promised to "immediately challenge" the state's decision with a "vigorous
response," according to its own statement.
"No material information was withheld from the state of North Carolina," the company said in its statement.
The state certificate is crucial to Alcoa's plan to renew a 50-year federal license on power generating dams
along the Yadkin River. And though the water quality division OK'd the certificate in 2009, Gov. Bev Perdue
has asked the federal government to deny Alcoa's application so the state can claim the dams. The Yadkin
Riverkeeper, an environmental group, and county commissioners in Stanly County, where much of Alcoa's
infrastructure is, challenged the certificate, with the riverkeeper saying Alcoa has a history of polluting water in
the lakes along the Yadkin.
That challenge pushed the issue into administrative hearings that have gone on since September.
Alcoa has been working with state attorneys to defend its certificate against that challenge, and said
Wednesday that it has done so in good faith.
"Throughout the 401 (certificate) application process, APGI worked with state officials, supplying information in
the form of monitoring data and other reports to document our approach to meeting water quality standards,"
the company said in its statement.
The disagreement deals with dissolved oxygen levels, which must be maintained for fish and other aquatic
wildlife. Alcoa's dams pull water from deep within man made lakes, where oxygen levels are lower. That water
is discharged downstream into the river, lowering oxygen levels there, and addressing this issue was part of
the new certification agreement, the state said. Alcoa maintained Wednesday that changes agreed to in the
new certification will address this adequately, and that dissolved oxygen levels already meet state standards
"much of the time."
But it is the accusation of misdirection that led to this revocation.
"I was disappointed to learn that APGI intentionally withheld information regarding the critical matter of
dissolved oxygen," Coleen Sullins, the director of the Division of Water Quality, said in the division's statement
Wednesday. "The process of certification relies on applicants submitting accurate and comprehensive
information to the division. When they do not, revocation is warranted."
From Jack Betts' Blog
NC. ai!encv revokes Alcoa water permit over withheld data
The key state agency regulating N.C. water quality says it is revoking a critical permit that Alcoa Power Generating INC
needs in its bid for a federal license to continue operating hydroelectric power plants on the Yadkin River. Alcoa
immediately announced it would fight the revocation. Where this leaves Alcoa's bid for another license like the one it has
held for 50 years to operate four hydro generators on the river is unclear, but by law Alcoa cannot get a federal license
from FERC without the permit, called a 401 certification.
The state's action came after some startling developments in an N.C. Office of Administrative Hearings procedure, when
an Alcoa official evidently conceded there was information about dissolved oxygen content readings that the state did not
know about.
The Department of Environment and Natural Resources released this, in part, early this afternoon:
Officials with the N. C. Division of Water Quality today notified Alcoa Power Generating Inc. of the revocation of the
company's 401 water quality certification, issued in May 2009 for APGFs Yadkin Hydroelectric Project in Stanly
County.
This action is being taken after DWQ officials learned APGI submitted an incorrect application and supporting materials
for the 401 water quality certification, in that the company intentionally withheld information on the project's ability to
meet the state's water quality standards for dissolved oxygen. This intentional omission came to light after company e-
mails were recently entered into evidence during a hearing before an administrative law judge involving Stanly County's
challenge to the issuance of the 401 water quality certification.
The Yadkin Hydroelectric Project includes High Rock, Tuckertown, Narrows - also known as Badin - and Falls
reservoirs. DWQ officials believed at the time the certification was issued that APGFs application for the certification
and supporting documentation provided adequate assurance that the proposed activities would not result in a violation of
state water quality standards and discharge guidelines.
(Alcoa can surrender the permit, or it can resubmit the application within 60 days with the errors corrected.)
Alcoa responded about the same time. Here's an excerpt:
New York, NY, Dec. 1, 2010 - Alcoa Power Generating Inc. is disappointed and surprised by the state's plans to start
proceedings to revoke the Yadkin Project's 401 Water Quality Certificate and will immediately challenge the state's
effort, the company announced today.
The certificate, which lays out a plan for APGI's Yadkin Project to meet water standards, was issued in 2009 by the North
Carolina Division of Water Quality and is currently under appeal by APGI and other parties.
"Our team of experts developed a comprehensive plan to improve water quality and we are already seeing improvement,
said Rick Bowen, president of Alcoa Energy. "We do not believe the state's decision is justified or appropriate.
"We believe that rather than continue litigation, it would be better to work together toward an outcome that protects the
environment and promotes economic development and jobs for residents of North Carolina. "
. -?, .jA(_ K bs i i Ai 1:25 PM A
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 susan.massengale@nederingov
E-mail correspondence to and from this address mqj> be subject to the
;Forth Carolina Public Records Law and ntcry be disclosed to third parties.