20041224 Ver 1_Other Agency Comments_20050715

Fish and Wildlife Associates, Inc.
Main Office at: P. O. Box 241 Tel [phone]
25 Water Tower Lane Whittier, NC 28789 Fax [phone]
Whittier, NC 28789 Email [e-mail]
July 15, 2005
Alvan W. Kilmek, P. E.
NC DENR
Division of Water Quality
1650 Mail Service Center
Raleigh, NC 27699-1650
Dear Mr. Kilmek:
On May 15, 2005 your division issued a 401 Certification, No. 3510 to Duke Power for
the surrender of their hydroelectric license (FERC No. 2602) for the Dillsboro Dam and
powerhouse on the Tuckasegee River. My question is, was this 401 Certification for the
surrender of the license as stated in the 401 Certification or was it for the removal of the
Dillsboro Dam as is being promoted by Duke Power? Please sce attached pages 13-14 of
a recent filing by Duke Power to the FERC.
Sincerely,
John L. Boaze,
Senior Biologist
Cc: Ken Westmoreland, Manager, Jackson Count
Paul Nolan, Attorney at Law
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UNITED STATES OF AI<IERICA
BEFORE TIIE
FEDERAL ENERGY REGULATORY COMMISSION
Duke Power, a division of Duke ) Project No. 2601, 2602, 2603,
Energy Corporation, Nantahala Area ) 2619, 268G, 2692, and 2698
COAINIENTS OF DUKE POWER, A DIVISION OF DUKE ENERGY CORPORATION,
NANTAHALA AREA, ON OFFER OF SETTLERIENT
Pursuant to Rule 602 (f)(2) of the Commission's Rules of Practice and Procedure
(18 C.F.R. § 385.602(f)(2)), Duke Power, a division of Duke Energy Corporation, Nantahala
Area ("DPNA"), licensee and applicant for new license for the Bryson Project No. 2601
("Bryso~i"), the Dillsboro Project No. 2602 ("Dillsboro") (for which a licensee surrender
application was also filed with the Commission on N1ay 28, 2004), the Franklin Project No. 2603
("Franklin"), the Mission Project No. 2619 ("Mission"), the Nest Fork Project No. 2686 ("West
Fork"), the Nantahala Project No. 2692 ("Nantahala"), and the East Fork Project No. 2698 ("East
Fork") (collectively, "Projects"), hereby submits its comments on the "Offer Of Preferred
Settlement Agreement, Request For Issuance Of New Licenses, And Explanatory Statement"
("Offer") submitted by Jackson County, Macon County, the Friends of Lake Glenville
("FOLG"), and others on June 16, 2005.
As discussed below, the so-called "Preferred Settlement Agreement" ("PSA") is
patently unreasonable, woefully unsupported, and contrary to law and the public interest and
should not be adopted by the Commission.
INTRODUCTION
Ttie requests for cash, free land, and other handouts and special rights for the
Counties, FOLG, and others in the PSA, and its total disregard for the public interest, the
interests of the Eastern Band of Cherokee Indians ("EBCI"), and DPNA's retail customers, are

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• dredge and remove within one year of the issuance of any license and
repeat every five years thereafter 75% of the sediments in the nine
impoundments at Dillsboro, East Fork, West Fork, Franklin, and
Bryson (PSA at pp. 12-13);
• donate to Macon County within six months two tracts of land totaling
11.33 acres for recreation purposes (PSA at pp. 12-13); and
• donate to Macon County within six months one 24-acre tract of land
for unnamed purposes (PSA at p. 13).
Finally, the PSA proposes that DPNA, before transferring Dillsboro to Jackson County or its
designee, "remove and relocate all bats and vermin from the Dillsboro Powerhouse," install bat
houses for the displaced bats, and "secure" the powerhouse "in a clean and sanitary condition
consistent with good utility practices." PSA at p. 12.
While the Offer and PSA are certainly long on demands on DPNA, they arc
woefully short on supporting explanations and rationales, and most certainly do not contain the
"substantial evidence" necessary to support any of the demands. Indeed, it appears that the oily
explanation provided for airy of the above requests is the statement at p. 4 of the Offer that a
primary purpose of the PSA "is to provide for the continued operation of Dillsboro Dam with
appropriate long-teen environmental and recreational protection and mitigation measures that
will meet diverse objectives for maintaining a balance of non-power and power values in the
project area and vicinity." Clearly, this single sentence does not justify these measures requested
in the PSA.
'these various PSA proposals are themselves infested with the dual vermin of
evidentiary inadequacies and legal infirmities. These are summarized below.
1. Retention Of Dillsboro Dam
As noted above, DPNA has presented substantial evidence of the environmental
~` superiority of the proposal by DPNA and the other parties to the TCST SA and NCST SA to
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// remove Dillsboro Dam. Consistent with this evidence, the North Carolina Department of
Environment and Natural Resources, Division of Water Quality, issued a § 40l CVVA
certification for the removal on May 15, 2005. See Attachment B hereto. The YSA parties have
presented no arguments or evidence that in any way undermine or call into question the analyses
of the environmental benefits and lack of adverse impacts of dam removal presented by DPNA.
Nor have they bothered to rebut the information upon which Rob Young, a Wcstcrn Carolina
University professor and a member of the planning board of the Town of Webster (a signatory to
the PSA), relied in concluding recently that removal of Dillsboro Dain makes sense
environmentally. See the copy of the article that appeared in the June 15, 2005 edition of the
Syh~a Herald appended hereto as Attachment C.
It appears that the PSA parties want the dam to remain solely because its presence
presumably increases adjacent property values (or maybe as an excuse to justify their
;> extraordinary demands for "mitigation"). However, as the Commission made clear in American
i Hydro Power Co., 60 FERC ¶ 61,237 at p. 61,797 (1992), the fact that removal of a dam might
y lower adjacent property values does not justify stopping its removal when the overall public
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interest indicates it should be removed. Further, the parties to the PSA simply fail to address the
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+ fact, as DPNA has pointed out previously,' that a licensee like DPNA cannot be "compelled to
'" continue operating a project if it wishes to surrender its license." See FPL Energy Maine Hydro,
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LLC, 106 FERC ¶ 61,038 at P 31 (2004) (and cases cited therein), order denying reh'g, 10
' FERC ¶ 61,120 at P 9 (2004) ("Moreover, as we stated in the surrender order, a licensee is free to
seek surrender of its license, and we cannot require a licensee to continue operating and
~ See pp. 15-16 of DPNA's August 31, 200.1 Motion To Clarify Record in Project Nos.
2602, et al.
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