20030147 Ver 0_More Info Received_20080117

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~~[ ~~~~~~ Non-Profit Law and Science for Glo6a1 Resource Solutions
January 14, 2008 Q 15~~ a
JAN 1 7 2008
Via First-Class and Electronic Mail DENR-WATERgUgllTy
M-ETUNDS AND STDRMVNATER BRANCIi
Rob Krebs
c/o John Dorney
Division of Water Quality
Wetlands and Stormwater Branch
North Carolina Department of Environmental and Natural Resources
2321 Crabtree Blvd.
Raleigh, NC 27604
john.dorne~((a~ncmail.net
Re: Supplemental Comments by the City of Rockingham, North Carolina, and
American Rivers Addressing Progress Energy's Response to Request for
Additional Information, Yadkin-Pee Dee Project for Tillery and Blewett Falls
Reservoirs, DWQ Project #2003-0147
Dear Mr. Krebs:
The City of Rockingham, North Carolina, and American Rivers respectfully submit
the following comments on Progress Energy's December 13, 2007, Response to Request for
Additional Information, Yadkin-Pee Dee Project for Tillery and Blewett Falls Reservoirs,
DWQ Project #2003-0147 ("December 13 Response"). As with the majority of our
comments, the following comments are focused on minimum flows in the Tillery Reach. We
support the flows the United States Fish & Wildlife Service ("FWS") has found most
appropriate for the Tillery Reach: 800-1,000 cfs minimum flows from Tillery Dam, with
spring spawning flows of 1,500-1,800 cfs. The evidence in the record establishes that these
flows are necessary to reestablish the natural ecological function of the river, promote the
health of aquatic life, and enable recreational opportunities for the benefit of all residents of
North Carolina.
At the outset, it is worth noting the significance of the Tillery Reach as a river
resource for aquatic life, recreational users, and nearby communities. From High Rock Lake
in the Yadkin Project to Blewett Falls Dam in the Yadkin-Pee Dee Project, the Tillery Reach
is the only remaining free-flowing stretch of river. It is therefore the only section of river

within the two hydroelectric projects for which restoration, a central goal of the federal Clean
Water Act ("CWA"), is feasible. And a restored Tillery Reach has the potential to become a
remarkable natural resource. The Tillery Reach falls within the Pee Dee National Wildlife
Refuge and offers 19-miles of unobstructed river along a shoreline that has retained its rural,
natural character. As the Comprehensive Settlement Agreement ("CSA") readily
acknowledges, "[t]his is quite unique in North Carolina, especially considering that the Pee
Dee River is the state's largest river." CSA, FERC e-Library no. 20070730-5021, at 7.
Indeed, the Tillery Reach "was rated by the National Park Service as having an outstanding
remarkable value designation for recreation." Draft Environmental Impact Statement for
Hydropower Licenses, Yadkin and Yadkin-Pee Dee River Hydroelectric Projects ("DEIS"),
at 166-67. Given this fact, restoring a river to the Tillery Reach and helping that river
achieve the uses designated under state law is an enormous opportunity for North Carolina.
Unfortunately, Progress Energy's response does not meaningfully contribute to the
certification process. Instead of providing the data requested by the Division of Water
Quality ("DWQ"), Progress Energy relies on portions of the DEIS, a document available well
before the comment deadline closed in this matter and almost two months before DWQ
issued its request for additional information. ~ Progress Energy bears the burden of producing
evidence sufficient to allow DWQ to determine whether its proposed actions will lead to a
violation of applicable water quality standards. Relying on the DEIS's conclusions in place
of producing the requested data is inconsistent with this burden. Indeed, because the public
does not have ready access to the information requested by DWQ, it is all the more important
that Progress Energy be forthcoming in this process. So far, Progress Energy has not lived
up to this responsibility.
Need for Requested Information
In its December 13, 2007, letter accompanying its response, Progress Energy suggests
that DWQ may have "waived its right to issue a 401 Certification, pursuant to 15A NCAC
02H .0507." Progress Energy Submittal Letter, at 1 (December 13, 2007). Contrary to this
suggestion, however, North Carolina law is clear that DWQ may request that an applicant for
' Progress Energy's heavy reliance on the DEIS is troubling for a variety of reasons. To begin with, the DEIS is
only a draft, and a draft with multiple flaws at that. The comments we submitted to FERC on December 10,
2007, pointed out a number of serious errors and oversights in the DEIS. It would be a mistake for DWQ to
rely on the DEIS's conclusions before FERC has addressed those problems.
In addition, as Progress Energy acknowledges, the 401 certification process is governed by different standards
than the federal administrative process. In the DEIS, FERC must consider a number of competing factors to
arrive at an allocation of resources it finds appropriate. DWQ's interests are much narrower; it must ensure that
Progress Energy's operation of Tillery Dam does not interfere with designated and attainable existing uses of
the Tillery Reach, namely "aquatic life propagation and maintenance of biological integrity, wildlife, secondary
recreation, and agriculture." ISA NCAC 02B .0211(2). Thus, DWQ should not rely on FERC's cost-benefit
analysis of resource allocation because FERC is not charged with protecting the existing and designated uses of
the waterways at issue.
Finally, and perhaps most importantly, the public has no access to the information that Progress Energy holds.
By failing to provide this information and by relying on a publicly available document, Progress Energy is
crippling the public's ability to understand the effects that its proposed actions may have on a public resource.
2

a 401 certification supply additional information subsequent to the initial application. The
North Carolina Administrative Code provides that DWQ "may request, and the applicant
shall furnish any additional information that may be found necessary for the proper
consideration of the application." 15A NCAC 02H .0502(c). Because the proposed project
degrades and removes designated and attainable existing uses, the law is equally clear that
"necessary information" includes information sufficient to determine whether there are
"practicable alternatives" to the proposed project. 15A NCAC 02H .0506(b)(1) and (f).
Progress Energy similarly asserts that information regarding unimpeded flow
projections and stream mitigation is irrelevant and unnecessary. This position, however,
ignores the federal Clean Water Act's mandate to restore waters (and not merely protect
existing but degraded uses). See 33 U.S.C. § 1251(a); North Carolina Shellfish Growers
Assoc. v. Holly Ridge Assoc., LLC, 200 F. Supp. 2d 551, 557 (E.D.N.C. 2001) (stating "[t]he
overarching aim of the CWA is to abate existing water pollution, to reclaim polluted waters,
and to prevent future pollution."). It also overlooks North Carolina regulations requiring all
waters to at least meet the designated use requirements for Class "C" waters (which includes
recreational, aquatic habitat, and biological integrity uses). 15A NCAC 02B .0101(c)(1).
Thus, DWQ's request for supplemental information was authorized and, in fact, required by
North Carolina law.
As discussed in our previous comments, applicable federal and North Carolina law
require DWQ to certify that any discharges authorized by a federal license or permit will
comply with federal and state Clean Water Act requirements, including attainment and
protection of designated uses according to the classification of the waters and any numeric or
narrative criteria necessary to maintain those uses. 33 U.S.C. §§ 1313(c)(2)(A) and
1341(a)(1); 15A NCAC 02B .0211 and .0219; 15A NCAC 02H .0506(a); see also PUD No. 1
of Jefferson County v. Washington Dept. of Ecology, 511 U.S. 700, 715 (1994) (holding "a
project that does not comply with a designated use of the water does not comply with the
applicable water quality standards."). As part of North Carolina's antidegradation standards,
a 401 certification also must ensure protection of any existing uses, whether or not included
in the designated uses. At a minimum, all fresh surface waters in North Carolina must meet
the standards for Class "C" waters. 15A NCAC 02B .0101(c)(1). Because they are
designated as Class "B" waters, the Tillery and Blewett Falls Reaches also must provide for
primary recreational uses. 15A NCAC 02B .0101(c)(2) and .0219. In this case, that means
DWQ must condition any 401 certification with requirements to ensure adequate flows,
dissolved oxygen levels, and other numeric and narrative parameters in the Tillery and
Blewett Falls Reaches to achieve and maintain recreational boating uses, aquatic habitat
sufficient to maintain a diverse and robust community of naturally occurring biological
species, and water quality that is safe for primary human contact.
Economic Practicality of Higher Flows
DWQ's November 13, 2007, letter to Progress Energy requested a "detailed
economic analysis" that "supports the ultimate conclusion that minimum flows higher than
330 cfs are not economically practical for the project." DWQ Request for More Information,
at 1 (November 13, 2007). Progress Energy's response, however, contains no such analysis.
3

In fact, Progress Energy's response provides no information to DWQ that was not available
months before DWQ requested the additional information.
Instead of providing the "detailed economic analysis" requested by DWQ, Progress
Energy deflects the question, attempting to justify its proposed flows by comparing the costs
of the increased flows with an incomplete description of the benefits those flows would
achieve. See December 13 Response at 2-4. The reason for this deflection is simple:
Progress Energy has no argument that the increased flows are not economically practical.
Ironically, the very document that Progress Energy relies on for the flawed cost-benefit
analysis it cites provides ample information to conclude that the increased flows are
eminently practicable from an economic standpoint.
The DEIS issued by FERC in September 2007 goes into a fair amount of detail on the
effect that adoption of the FWS minimum flows will have on Progress Energy's bottom line.
As Progress Energy states, the DEIS estimates that increasing minimum flows from 330 cfs
to 900 cfs (725 cfs to 1,650 cfs spawning flows) will "cost" Progress Energy $692,500 per
year in lost energy production.2 DEIS at 242, 272-73. Even ignoring the benefit that wildlife
and recreation can be expected to receive from the FWS flows, Tillery Dam could easily
provide the increased flows without substantially impeding the significant profitability of the
Yadkin-Pee Dee Project.
According to the DEIS, $692,500 represents less than 5% of the annual income that
Progress Energy can expect to reap from the Yadkin-Pee Dee Project. See DEIS at 260.
With minimum flows of 330 cfs, the DEIS estimates that Progress Energy will produce
$15,317,500 in power at a cost of $9,143,960, for an annual net benefit of $6,173,540, or a
68% return on the cost of generation. Id. Even with an additional $692,500 cost factored in
for the FWS minimum flows, Progress Energy's annual return would stand at 60%. See id.
This return can only be expected to increase over the next 50 years as the cost of other
sources of energy continues to rise.3
z In fact, the FWS minimum flows will not cost Progress Energy a penny, in terms ofout-of-pocket expense, but
will reduce the supply of electricity Progress Energy will be able to sell to its customers. Notably, the DEIS did
not look into the option of mitigating this effect by installing a new turbine capable of generating power at
flows between 800 and 1,000 cfs. DEIS at 111. FERC decided not to investigate this option because it would
have "reduce[d] the aeration effect and water quality benefits of the minimum flow provided by spillage
through the trash gate, and would somewhat increase the potential for fish entrainment mortality through any
new turbine unit." Id. Given that "cost" was the primary reason FERC did not recommend the FWS minimum
flow, it is somewhat surprising that it did not even consider this alternative.
3 In terms of the total protection, mitigation, and enhancement ("PME") expenses associated with the Yadkin-
Pee Dee Project, the $692,500 annual cost of the FWS flows is on par with the importance of those flows to
aquatic life and recreation. The DEIS recommends a suite of PME measures that will cost approximately $2.3
million. DEIS at 242-59. With an additional $692,500 factored in for the FWS flows, the cost of the increased
flows will constitute approximately 23% of total PME expenses. Given the profitability of the Yadkin-Pee Dee
Project, the agreements on fish passage at Blewett Falls Dam, and the improvements to aquatic habitat and
recreation that the FWS flows will bring, this hardly seems excessive.
4

As these figures make clear, increased flows at Tillery Dam are certainly no danger to
the profitability of the Yadkin-Pee Dee Project. It is therefore no wonder that Progress
Energy does not address DWQ's request head on. Indeed, it has not provided any of the
requested information, which only supports the conclusion that the FWS flows are
"economically practical."
Rather than furnish the requested information, Progress Energy attempts to establish
that the benefits of increased flows will not be worth the cost of lost energy. To do so, it
provides no new research or data, but quotes at length from the DEIS, a document published
almost two months before DWQ's request for new information. As our comments on the
DEIS noted, however, the cost-benefit analysis the DEIS contains is fundamentally flawed.4
Most importantly, the DEIS fails to consider that increased flows will benefit both
aquatic life and recreation. Instead, it considers the benefits of increased flows to recreation
and aquatic life separately, in isolation from each other. Under this "divide and conquer"
approach, the DEIS weighs only the increase in available habitat against the cost to Progress
Energy of FWS minimum flows, and the increase in recreational opportunities against the
cost of the City of Rockingham's proposed recreational flows. See, e.g., DEIS at 273 ("The
greater annual cost of $1,227,500 for the higher flows recommended by FWS/American
Rivers would not be worth the minor incremental improvement to downstream aquatic
habitat."); DEIS at 288 ("We do not find that the current and projected use warrants boatable
flows every weekend and holiday during the entire recreation season, given the relatively low
use of this reach and the additional annual cost of $129,000 to implement the 1,200 cfs
alternative ...."). Even setting aside the fact that it is difficult, if not impossible, to put a
numerical value on the environmental benefits and recreational enjoyment that would result
from a healthy river, the DEIS's comparison is simply incomplete.
The DEIS's assessment of the positive impact that the FWS flows will have on
aquatic life and on recreational opportunities is also limited. For example, the DEIS fails to
acknowledge the importance of minimum flows to the stretch of river between the Tillery
Dam and the Rocky River. Minimum flows will have a disproportionately positive effect on
this subreach because there are no other inflows, because it will mitigate for peaking
operations, and because the water is not affected by low-quality water from the Rocky River.
The DEIS also fails to even discuss the effect of minimum flows on habitat for freshwater
mussels, even though endangered mussel species are thought to occur in the Tillery Reach.
In addition, Progress Energy's description of the impact of FWS flows relies heavily
on the DEIS's discussion of Weighted Useable Area ("WUA") curves, but that is the extent
of the data that Progress Energy submits. It does not discuss other important metrics, such as
the expected population benefit from FWS flows as compared to CSA flows. Indeed,
Progress Energy does not address the bases for FWS's recommended flows. As the federal
agency responsible for wildlife within the Tillery Reach, FWS's determination of the
a Not to mention irrelevant to this proceeding. The law is plain: DWQ cannot issue a 401 certification for a
project that will not meet and maintain state water quality standards, period.
5

appropriate flow level should carry significant weight, yet Progress Energy does not address
FWS's reasons for the actions it recommends.
As for recreational opportunities, increased flows in the Tillery Reach would enable a
tourism-based economy that would yield a net economic benefit well above the cost of lost
power generation. Indeed, two independent sources suggest that the Tillery Reach could
anchor a tourism economy that would generate millions of dollars for local economies. See
Johnson, Lindsy, "Case Studies of Water Trail Impacts on Local Communities," at ii (finding
that national paddle-trail users spent between $27 and $63 per day in local communities,
which, based on the DEIS's estimate of 72,000 user days for the Yadkin-Pee Dee River
Project ,suggests that Yadkin-Pee Dee River users would spend between $1,944,000 and
$4,536,000 annually)5; Carver, Erin, and Caudill, James, "Banking on Nature 2006: The
Economic Benefits to Local Communities of National Wildlife Refuge Visitation," FERC e-
Library no. 20071205-5010, at ii (finding that visitors to national wildlife refuges generated
almost $1.7 billion in sales in regional economies, suggesting that Tillery Reach visitors
could contribute $3.5 million to local economies).
The comments we submitted to FERC concerning the DEIS go into these points in
more detail, and we will not repeat them here. Instead, we have included Section III of our
DEIS comments as Attachment 1 to this letter for DWQ to review.
Flow Proiections With and Without Dams
DWQ also requested that Progress Energy submit a "detailed description of minimum
flow projections with and without the existing dams." Progress Energy's response argues
that this information is irrelevant because there is no longer such thing as a "natural flow" in
the Yadkin-Pee Dee River. 6 December 13 Response at 5. While it may be true that the
Yadkin and Yadkin-Pee Dee River Projects have fundamentally altered their rivers, by no
means does this make the "natural flow" in those rivers irrelevant. The goal of the Clean
Water Act -and the purpose of the certification Progress Energy seeks - is to "restore .. .
the chemical, physical, and biological integrity of the Nation's waters." 33 U.S.C. § 1251(a)
(emphasis added). Understanding the rivers' "natural flow" therefore provides the reference
point by which the impact of the proposed certifications must be measured. Contrary to
Progress Energy's assertions, "natural" conditions are fundamental to the certification
process.
5 This study is attached as Attachment 1 to our October 19, 2007, comments on Progress Energy's 401 water
quality certification application.
6 Along the same lines, Progress Energy takes issue with our previous comment that the proposed spawning
flow of 725 cfs "is considerably less than the 7Q10 flow" in the Tillery Reach, claiming instead that the 7Q10
flow will improve under its proposed spawning flow. December 13 Response at 6 (claiming that 7Q10 flow
will increase from 2,085 cfs under current operation of Tillery Dam to 2,157 cfs under the proposed 725 cfs
spawning flow). But Progress Energy is comparing apples to oranges. Our comment was focused on
instantaneous minimum flows because those flows represent a limitation on aquatic habitat -fish cannot spawn
and sensitive mussels cannot survive in parts of the river channel that will be exposed for significant periods of
time. The aggregated flows Progress Energy relies on mask the daily fluctuations in flows, and do not reveal
the effects of peaking operation of Tillery Dam.
6

Rather than provide data on the original condition of the Yadkin and Pee Dee Rivers,
which would allow the public to understand the effects of the current allocation of river
resources, Progress Energy predicts river flow in the hypothetical environment where the
Yadkin-Pee Dee dams have been removed but the Yadkin Project dams remain in place.
December 13 Response at 6. It is difficult to understand the import of this information. If
Progress Energy means to show that river flows benefit from Tillery Dam then it is
overlooking two key points. First, just because Tillery Dam enables a consistent minimum
flow does not establish that the minimum flow Progress Energy proposes is appropriate
under the CWA. It remains true that the FWS flow will more fully protect the designated
uses of the river than the proposed 330 cfs minimum flow. Second, and more importantly,
Progress Energy's argument hinges on the assumptions that Falls Dam would have received
the same 401 certification if Tillery Dam did not exist. But it is entirely naive to suggest that
Falls Dam could be operated in the same manner if it were the last dam before a stretch of
river as important as the Tillery Reach; in Progress Energy's hypothetical scenario the same
issues would still have existed, they just would have been faced by APGI rather than
Progress Energy.
In response to DWQ's request, Progress Energy provides the results of a "computer-
based simulation of the future operation of APGI's facilities under the recent 401
Certification granted to APGI by the NCDWQ using hourly data for the period of 1983 to
2003." December 13 Response, at 6. But it provides no details about this "simulation," or
about any of the assumptions that went into the simulation. For example, Progress Energy's
simulation assumes a "peaking operation" of Falls Dam, where "water is saved for release
during periods of the day when the value of power is higher, and no water will be released
when the value of power is low (off-peak periods) all in a manner that meets the average
daily flow requirements of the [APGI] 401 Certification." Id. at 6. This assumption,
however, contradicts repeated statements from other sources that Falls Dam is operated in
run-of--river mode. See, e.g., DEIS at 15 ("Alcoa Generating operates the ...Falls
Development[] in a daily run-of--river mode."); DEIS at 57 ("Alcoa Generating operates the
Falls development as arun-of--river facility ....").
The exceedance data Progress Energy has supplied is also difficult to reconcile with
information in the DEIS. For example, Progress Energy's computer-based simulation
predicts a 90% exceedance of 37 cfs in the Tillery Reach without Tillery Dam, and a 75%
exceedance of 219 cfs. December I3 Response at 7. The DEIS, however, predicts monthly
exceedances of outflow from Falls reservoir well above these numbers: 90% monthly
exceedances ranging from 0 to 1,651 cfs, and 75% monthly exceedance ranges from 917 to
5,823 cfs. DEIS at 57. While these numbers may not be directly comparable to those
supplied by Progress Energy, there is no way to reconcile them without seeing the actual data
that Progress Energy relied on.
Flow Rate Exceedances
DWQ requested "a breakdown on the percentage of time the flows at both Tillery and
Blewett Falls would have exceeded the proposed minimum flow rates (including fish
7

spawning time frames and proposed minimum flow rates) over the past two years." It also
requested "two years worth (June 1, 2005 -June 1, 2007) of daily flow rate averages for both
Tillery and Blewett Falls Reservoirs."
As an initial matter, Progress Energy has not produced the second set of requested
information. It has not supplied "daily flow rate averages," but has only provided an
exceedance curve that aggregates this data into one chart. December 13 Response at 10.
Progress Energy should be required to provide the information requested so DWQ and the
public can better understand the operation of Tillery Dam and its likely effect on the river.
As for the first set of requested information, Progress Energy's exceedance charts
show only the mean daily flow data. Id. They provide no insight into the instantaneous
flows that are most relevant aquatic habitat, recreation, and other designated uses of the river.
Data on the percentage of time instantaneous flows from Tillery Dam fall below 330, 725,
900, and 1650 cfs are necessary to determine whether Progress Energy's operation of Tillery
Dam will lead to violations of state water quality standards.
Progress Energy should provide a breakdown of outflows from Tillery Dam that
shows the changes in instantaneous flow over the course of a day, for the two-year period
identified in DWQ's request. The mean daily flow data Progress Energy has submitted
conceals these flow fluctuations; a mean daily flow of 6,000 cfs, for example, may indicate
24 hours of 6,000 cfs flow, 12 hours of 12,000 cfs flow and 12 hours of virtually no flow, or
something in between. Because minimum flows provide a ceiling on habitat available for
aquatic life, the instantaneous flow schedule is vitally important to wildlife. Progress Energy
should therefore provide additional data that reveals the instantaneous flow schedule in the
Tillery Reach. At a minimum, for those days in which mean daily flow is 800 cfs or greater,
Progress Energy should submit data on the amount of time the flow was kept at minimum
flow.
Effects of Proiected Increased Flow Rates
DWQ requested that Progress Energy "[d]etail [the] effects (economic, aquatic,
biological integrity, etc) of projected minimum continuous flow rates of 800-1000 cfs (year
round) and 1,500-1,800 cfs (During spring spawning season ...) for the Lake Tillery Reach."
Progress Energy's response to this request is incomplete; it does not discuss the economic
effects of the increased recreation that such flows would enable. Indeed, it does not even
discuss the expanded recreational uses of the Tillery Reach that the higher flows would
enable. See December 13 Response at 9, 12-13.
Instead, Progress Energy focuses on the DEIS's discussion of the benefit FWS flows
will have on aquatic life. Id. at 9. As described above, there are numerous problems with
relying on a draft document to predict the effects of increased flows, especially given that the
DEIS is incomplete. As mentioned above, our criticism of the DEIS's conclusions are
attached hereto as Attachment 1.

Progress Energy also argues that river flow is just one variable among a number of
limiting factors for aquatic life, such as "[dissolved oxygen] and other water quality
variables, sedimentation, non-native predators, [and] competing species." December 13
Response, at 12. It claims that "changes solely attributable to flow can not be readily parsed
out" from these other factors. Id. But at this point in the proceedings, the burden of
production is on Progress Energy, and it should not be allowed to use the lack of scientific
certainty to its advantage. Instead, it must provide evidence sufficient to show that its
proposed flows will not impair the river's ability to support aquatic life.
Progress Energy's discussion of the effects of FWS flows is also incomplete. It
provides an evaluation of three transects between Tillery Dam and the Rocky River, but does
not disclose why it chose to provide those, and only those, transects. Id. at 13. Indeed,
Attachment 2 to Progress Energy's response indicates that numerous other transects were
evaluated, yet Progress Energy has not provided those. Given that the public does not have
access to this information, it is especially important that Progress Energy not be allowed to
selectively pick which data it will use to support its position.
DWQ has the responsibility to ensure that designated and attainable existing uses of
the river are protected. Under North Carolina law, those uses are "aquatic life propagation
and maintenance of biological integrity, wildlife, [primary and] secondary recreation, and
agriculture." 15A NCAC 02B .0211(2) (setting standard for "Class C" waters); 15A NCAC
02B .0101(c)(2) and .0219 (setting standards for "Class B" waters). Progress Energy should
provide information on the extent to which each beneficial use will be impacted by the
proposed CSA flow. Unless Progress Energy can provide evidence showing that flows
below those recommended by FWS will not harm these uses, it should not be granted a water
quality certification for those lower flows.
Mitigation
Finally, DWQ requested a "detailed analysis of your mitigation proposal as compared
to DWQ's policy guidance on FERC mitigation dated August 24, 2007." In this case, we
agree with Progress Energy that mitigation, as outlined in DWQ's policy, is inappropriate
here. Specifically, mitigation should not be used as a substitute for higher flows.
Resorting to mitigation in this case -where there is a practical alternative to Progress
Energy's proposed 401 terms that would adequately protect designated uses of the river -
would render state water quality standards meaningless. Any party seeking a water quality
certification would have a back door through which they could avoid the requirements of
North Carolina's water quality regulations. Indeed, North Carolina's mitigation policy
implicitly recognizes this point by establishing athree-tiered approach to water quality
certification: "1) avoid the impact, then 2) minimize the impact to the maximum extent
It is also worth noting that Progress Energy's dams may be a cause of some of the other limiting conditions
that Progress Energy identifies. See, e.g., 2003 Yadkin-Pee Dee River Basinwide Water Quality Plan, Section
B, Chap. 10, § 10.2.2 (stating that low dissolved oxygen levels below Tillery Dam "likely result from deep
water (hypolimnetic) releases through the hydropower facility at Lake Tillery")

practical and then 3) finally, mitigate for unavoidable impacts." North Carolina DWQ Memo
re Stream Mitigation for FERC-Related 401 Certifications, at 1 (August 24, 2007).
Because the impact of discharges from Tillery Dam can be minimized through the
implementation of FWS flows, and, as discussed above, those flows are eminently practical,
mitigation would be inappropriate. Both the federal Clean Water Act and North Carolina's
implementing regulations require that all fresh surface waters meet applicable water quality
standards and their designated uses. DWQ may not sacrifice those designated uses if a
practical alternative exists. Its first priority must be to restore the river.
Conclusion
The information Progress Energy has provided, the vast majority of which was before
DWQ at the time it issued its request for additional information, leaves much to be desired.
For example, the following questions remain unanswered:
• What impact will the proposed PME measures have on Progress Energy's
ratepayers? What charges would those ratepayers incur as a result of the
$692,500 in lost energy production predicted for FWS flows? What percentage of
the relicensing costs has Progress Energy recovered through its ratepayers?
• How do the proposed flows for the Tillery Reach compare in light of the Clean
Water Act's goal of restoring "the chemical, physical, and biological integrity of
the Nation's waters"? To what extent will future conditions approximate the river
that existed before the Yadkin and Yadkin-Pee Dee Developments existed?
• How do instantaneous flows in the Tillery Reach fluctuate over the course of a
day or week? On days when the mean daily flow is above 800 cfs, what is the
maximum flow reached and what percentage of the time is the flow kept at its
minimum?
• What is the expected recreational use of the Tillery Reach under FWS flows?
What effect does Progress Energy anticipate that the CSA flows will have on that
use?
Until and unless these questions are satisfactorily answered, the City of Rockingham
and American Rivers respectfully request that the Department implement the minimum flow
regime recommended by FWS. Minimum flows of 800-1,000 cfs are critical to the river's
health, as well as to its use for the enjoyment of local communities and all residents of North
Carolina.
10

Respectfully submitted,
~~ ~ -~
Richard Roos-Collins
Julie Gantenbein
John Tighe
NATURAL HERITAGE INSTITUTE
100 Pine Street, Suite 1550
San Francisco, CA 94111
[phone]
[phone] (fax)
rrcollins(c~n-h-i. org
j ~antenbein(a~n-h-i. orb
'tip ~he(a~n-h-i.or~
Attorneys for the CITY OF ROCKINGHAM,
NORTH CAROLINA, and AMERICAN
RIVERS
Gene McLaurin
Mayor
City of Rockingham
514 Rockingham Road
Rockingham, NC 28379
[phone] ext. 122
ma~or~a),~orockin~ham.com
Monty Crump
City Manager
CITY OF ROCKINGHAM
S I4 Rockingham Road
Rockingham, NC 28379
monty(a,~orockin~ham. com
Gerrit Jobsis
Southeast Regional Director
AMERICAN RIVERS
2231 Divine St., Suite 202
Columbia, SC 29205
~1 obsis(c~americanrivers. org
11

DECLARATION OF SERVICE
Progress Energy, Yadkin-Pee Dee Hydroelectric Project (P-2206)
I, Russell Hilkene, declare that I today served the "Supplemental Comments by the
City of Rockingham, North Carolina, and American Rivers Addressing Progress Energy's
Response to Request for Additional Information, Yadkin-Pee Dee Project for Tillery and
Blewett Falls Reservoirs, DWQ Project #2003-0147," by electronic mail, or if no electronic
mail address is provided, by first-class mail, to the following parties:
Rob Krebs
c/o John Dorney
Division of Water Quality
Wetlands and Stormwater Branch
North Carolina Department of Environmental and Natural Resources
2321 Crabtree Boulevard
Raleigh, NC 27604
john.dorneyna,ncmail.net
and each person on the official service list complied by the FERC Secretary for docket
number P-2206.
Dated: January 14, 2008
By:
c- ~- "
Russell Hilkene
NATURAL HERITAGE INSTITUTE
100 Pine St., Suite 1550
San Francisco, CA 94111
[phone]
rhilkene(c~,n-h-i.org
12

and wilderness areas, the preservation of anadromous fish for commercial and
recreational purposes, and the protection of wildlife.
The need to destroy the river as a waterway, the desirability of its demise, the
choices available to satisfy future demands for energy -these are all relevant to a
decision under [FPA section 10] but they were largely untouched by the
Commission.
On our remand there should be an exploration of these neglected phases of the
cases.
Udall v. FPC, 387 U.S. 428, 450 (1967) (emphasis added).
III.
MINIMUM FLOWS IN THE TILLERY REACH
The DEIS's discussion of minimum flows in the Tillery Reach is flawed and incomplete.
It does not adequately describe the benefits that can be expected from increasing the minimum
flows to 800-1,000 cfs, it does not make an honest attempt to weigh those benefits against the
expected cost to Progress Energy, and it does not adequately discuss any of the comprehensive
plans for the area. Instead, the DEIS defers the most important decisions to the terms of the CSA
without a genuinely thorough analysis. Before it can satisfy NEPA's "hard look" standard, the
Commission must consider the following.
A. Beneficial Effects of Increased Minimum Flows
Currently, the operation of Tillery Dam prevents the Tillery Reach from achieving its
potential as a recreational resource and as aquatic habitat. The extremely low flows that occur
when power is not being generated at Tillery Dam provide a strict limitation on the ability of the
Tillery Reach to support aquatic life. In the five-mile stretch between the Tillery Dam and the
Rocky River, there is too little water to create any significant aquatic habitat; what little water
there is violates state temperature and DO standards. The rest of the reach is dominated by low-
quality inflows from the Rocky River, rendering it poorly suited for aquatic life. The high flows
from Tillery Dam during generation only exacerbate problems. The rapid switch from 40 cfs to
as high as 18,000 cfs damages the river channel and severely constrains the ability of freshwater
mussels and fish to survive. The low flows and extreme peaking described above also render the
Tillery Reach generally unsuitable for recreation. Boats are unable to navigate during periods of
non-generation, while during generation they may be swept away.
Increasing the minimum flows in the Tillery Reach will have two primary benefits: it
would enhance habitat for aquatic life, including resident and diadromous fish species and
freshwater mussel species, and it would allow increased recreation on the river, allowing the
City of Rockingham, North Carolina, and American Rivers' Comments
Alcoa Generating, Inc., Yadkin Hydroelectric Project (P-2197-073)
Progress Energy Carolinas, Yadkin-Pee Dee River Hydroelectric Project (P-2206-030)
-13-

entire public to enjoy the river as a resource and promoting tourism in the region. The DEIS
does not discuss either of these benefits in adequate detail.
This shortcoming is a major flaw in the DEIS. Of all the river stretches in the Yadkin
and Yadkin-Pee Dee Projects, from High Rock Lake through Blewett Falls Dam, the Tillery
Reach has the potential to benefit the most from improved license conditions. It is the only
riverine section within the Projects, and it offers 19-miles of unobstructed river along a shoreline
that has retained its rural, natural character. As the CSA readily acknowledges, "[t]his is quite
unique in North Carolina, especially considering that the Pee Dee River is the state's largest
river." CSA, e-Library no. 20070730-5021, at 7. Indeed, "[t]he riverine reach between Lake
Tillery and Blewett Falls was rated by the National Park Service as having an outstanding
remarkable value designation for recreation." DEIS at 167. Given this fact, restoring an actual
river to the Tillery Reach, creating new aquatic habitat and opening opportunities for new forms
of water-based recreation, should be a priority of the relicensing process.
Unfortunately, the DEIS has not made restoring the Tillery Reach a priority. It rejects the
MFS proposed by FWS, American Rivers, and the City of Rockingham, which would have
required minimum flows between 800 and 1,000 cfs and spring spawning flows of 1,500-1,800
cfs. Instead, the DEIS recommends adoption of the CSA's proposed 330 cfs minimum flow and
725 spawning flow. The only reason given for this recommendation is that the benefits of
increasing flows from 330 to 900 cfs did not justify the corresponding loss in power generation.
DEIS at 272, 298.
1. Aquatic Life
The DEIS is sorely lacking in its discussion of the effects of the various alternative flow
schedules on aquatic life. As mentioned above, the Tillery Reach is the only riverine section
remaining in the Project areas. Given the extent to which riverine habitat has been sacrificed for
the sake of power generation, the DEIS should have addressed the proposed Tillery Reach flows
in detail. This is especially true given recent agreements to restore American shad to the Tillery
Reach. Yet the DEIS's analysis contains multiple shortcomings.
To begin with, the DEIS fails to evaluate the impact of minimum flows in the subreach
below Tillery Dam. There are numerous reasons why this five mile subreach necessitates extra
consideration. First, there are no other inflows into this subreach; the water comes only from
releases from Tillery Dam. Thus, increased minimum flows will have an immediate, direct, and
dramatic effect on aquatic habitat available in this subreach. The DEIS confirms this. The
Weighted Useable Area chart demonstrates the dramatic difference in habitat available between
the CSA flows and the American Rivers flows. DEIS at 108 (showing twice as much American
shad spawning habitat under American Rivers' proposed flows as CSA flows). Shad habitat is
especially important in this subreach because, as American shad migrate, they will be drawn
upstream and into this subreach to spawn.
City of Rockingham, North Carolina, and American Rivers' Comments
Alcoa Generating, Inc., Yadkin Hydroelectric Project (P-2197-073)
Progress Energy Carolinas, Yadkin-Pee Dee River Hydroelectric Project (P-2206-030)
-14-

Second, water quality in the subreach would improve with increased flows. The subreach
below Tillery Dam is promising habitat for aquatic life because it is not affected by low-quality
water from the Rocky River. See DEIS at 130. With the current low flows, however, water
quality standards are routinely violated. Indeed, temperatures were measures at 35.6 degrees
Celsius, 3.6 degrees higher than the North Carolina limit, 4.6 miles downstream of Tillery Dam.
DEIS at 70. The temperature did not drop until downstream of the Rocky River confluence.
Heightened minimum flows would help address this problem. The DEIS does not evaluate how
temperature may be enhanced under the flows proposed in the CSA or as recommended by the
City of Rockingham, American Rivers and FWS.
Third, higher minimum flows will help mitigate for the effects of peaking operations.
Immediately below Tillery Dam, there is no additional flow to soften the change from 330 cfs to
18,000 cfs - a change of over 5,400%. Below the confluence of the Rocky River, however, the
Pee-Dee River will generally have flows between 500 and 1,500 cfs, which will mitigate the
effects of peaking operations. See DEIS at 59.
In addition to the higher minimum flows, additional measures are necessary to mitigate
effects of hydropower operations from the Tillery Dam on fish spawning and recruitment.
American Rivers has recommended a flow naturalization regime similar to those proposed for
Blewett Falls to address the impacts of extreme flow fluctuations at the Tillery development. See
American Rivers' REA Comments, e-Library No. 20070514-5163.
The DEIS supports flow naturalization measures for the Blewett Falls Dam including
online and offline ramping. However, our recommendations for similar flow naturalization
provisions were dismissed in the DEIS without analysis. Such flow naturalization is even more
important at the Tillery Dam because effects of capacity operations are more drastic and harmful
to aquatic resources. Flows currently fluctuate from leakage to 18,000 cfs. Even with the MFS
recommended by American Rivers and FWS, flows could fluctuate 1,800% or more. With the
MFS proposed in the CSA and recommended in the DEIS, flows could fluctuate more than
5,400% from a minimum of 330 cfs to 18,000 cfs.
FERC's recommendation of flow naturalization measures at Blewett Falls and not at
Tillery where effects of peak operation are more extreme is illogical. FERC must conduct an
independent analysis of the need for flow naturalization and ramping at Tillery Dam in the FEIS
and recommend measures that would offset the effects of the extreme fluctuation that would
result from project operations.
Properly analyzing the beneficial effects of increased flows is especially important given
that agreement has recently been reached on fish passage at the Yadkin-Pee Dee Project. See
Yadkin-Pee Dee River Diadromous Fish Passage Plan Agreement for Yadkin-Pee Dee River
Hydroelectric Project No. 2206. The recently approved fish passage agreement and NMFS'
modified mandatory prescriptions for fishways, when issued, should be fully incorporated into
the final EIS and license order. Further, the implications of the proposed flow schedules should
be reexamined in light of that agreement.
City of Rockingham, North Carolina, and American Rivers' Comments
Alcoa Generating, Inc., Yadkin Hydroelectric Project (P-2197-073)
Progress Energy Carolinas, Yadkin-Pee Dee River Hydroelectric Project (P-2206-030)
-15-

The DEIS also fails to adequately discuss habitat for freshwater mussels. Although the
DEIS acknowledges that free-flowing reaches such as that found below Tillery Dam are
"favorable habitat for mussels," DEIS at 96, it contains absolutely no discussion of the impact of
alternative flow schedules on mussels and their habitat. See, e.g., DEIS at 113-14, 282-83. This
is a major oversight; mussels have been declining in the Yadkin and Pee Dee Rivers for years.
Indeed, the DEIS states that the Carolina Heelsplitter, a federally listed endangered mussel
species, may occur below Tillery Dam. DEIS at 154-56; see also DEIS at 100 (listing yellow
lampmussel and Carolina creekshell as federal species of concern occurring in the Tillery
Reach).
Rare mussel species in the Yadkin-Pee Dee River are of particular concern. Progress
Energy has not provided sufficient evidence to establish that its proposed flows would restore
those species in the Tillery Reach. The minimum flow Progress Energy has proposed is not
sufficient to wet the entire river channel, leaving less habitat available for mussels to live.
Especially affected are habitats near stream banks which are preferred by several mussel species.
Consistent wetting along channel margins is an important factor in juvenile mussel recruitment.
In addition, sustained lower flows are more likely to impact mussels that are more highly
sensitive to emersion, which tend to be the rarest of the mussel species. Mussels that can survive
for hours or days out of water will be able to tolerate the fluctuating flows, while those that need
continuous water cover will be much more restricted in their potential habitat.
In a study conducted over the 2004 season, Eric Krueger and Dr. Ryan Heise found
mussel populations of the Pee Dee River were dominated by the emersion tolerant species
Eastern elliptio. See Heise & Krueger, "Freshwater Mussels of the Great Pee Dee River: Habitat
Preferences of Known Occurring Species; and Relationships to Flow, Emersion, and Dissolved
Oxygen," at 3 (attached hereto as Attachment 1). Although they found good diversity in terms of
total species, populations other than Eastern elliptio appeared suppressed. Id. This suggests
river conditions favor emersion tolerant species at the expense of more sensitive species such as
the conservation listed yellow lampmussel and Eastern creekshell. This study also suggests that
with a consistent adequate flow, suppressed species would rebound.
The extreme fluctuation between Progress Energy's 330 cfs proposed minimum flow and
its 18,000 cfs capacity flow will also have a significant impact on mussels. Mussels may site
themselves in one location based on a particular depth-velocity-shear situation, only to have that
situation dramatically changed by hydropower operations. While shear conditions also change in
an undammed system, the degree of change in the regulated Pee Dee is more abrupt and frequent
than under pre-dam conditions. Krueger and Heise noted in their response to Progress Energy's
comments on "Freshwater Mussels of the Great Pee Dee River" that emersion tolerant species
such as Elliptio congarea, relatively common throughout the Pee Dee River, are virtually absent
below the Tillery Dam although habitat is very similar. Heise & Krueger, "Response to Progress
Energy Comments on `Freshwater Mussels of the Great Pee Dee River,"' at 3 (attached hereto as
Attachment 2). This suggests there are negative effects on these animals in areas proximal to
dams.
City of Rockingham, North Carolina, and American Rivers' Comments
Alcoa Generating, Inc., Yadkin Hydroelectric Project (P-2197-073)
Progress Energy Carolinas, Yadkin-Pee Dee River Hydroelectric Project (P-2206-030)
-16-

There is great potential for improvement of mussel populations in the Pee Dee River
through flow improvements. Along-term study on the Duck River in Tennessee documented
significant mussel recovery below Normandy Dam following a minimum flow increase and
dissolved oxygen improvements. Attachment 2, at 5. These beneficial changes led to diversity
improvements including restoration of three federally listed species to areas where they were
formally eliminated. Id. Similar trends are being observed on the Coosa River in Alabama
following adequate minimum flow requirements. Id. A minimum flow of 330 cfs falls far short
of the flows necessary to improve mussel populations. Minimum flows of between 800-1,000
cfs as recommended by the United States Fish and Wildlife Service are necessary to restore,
protect and enhance mussel populations and habitat on the Tillery reach of the Pee Dee River.
2. Recreational Flows
The DEIS's analysis of recreational opportunities in the Tillery Reach is wholly
inadequate. Indeed, the analysis dedicates more discussion to cataloging the incompleteness of
the information Progress Energy provided than to describing the effect of the various flow
proposals. See DEIS at 187-89, 287-89. Astonishingly, despite the volume of information that
the DEIS acknowledges it is missing, it nonetheless recommends adoption of Progress Energy's
proposed MFS and rejects those of American Rivers and the City of Rockingham. Id.
Given the Tillery Reach's natural character and beauty, described above, increased
minimum flows would undoubtedly promote recreation in the Tillery Reach. Currently, river
flows are too unpredictable to support any significant recreational usage. Minimum flows
immediately downstream of Tillery Dam are too low to support any watercraft, and jon boat
navigation throughout the entire reach is all but impossible under present conditions. DEIS at
187-88. Moreover, sudden peaking operations present a constant risk to all craft.
While the Staff-recommended conditions mitigate some of these problems, the DEIS
acknowledges that flows higher than 330 cfs are needed for recreational usage of the Tillery
Reach. Id. But the DEIS largely sidesteps the issue, refusing to consider any increased flows
because "current and projected use [does not] warrant[] boatable flows every weekend and
holiday during the entire recreation season." DEIS at 288. This position is nonsensical -current
use could never justify increased flows because there is no river to use. In order to fulfill its
NEPA mandate, the DEIS must seriously evaluate the potential recreational uses of the Tillery
Reach, and cannot rely on such blatantly flawed logic.
The DEIS does not sincerely address the recreational promise of the Tillery Reach, but
other sources suggest that it holds the potential to be a significant boon to the surrounding
communities and to all residents of North Carolina. Paddle sports are one of the fasted growing
recreational activities in the United States today. Recreational kayaking and canoeing is
projected to experience a 73% growth in activity-day participation of paddlers by 2050.
Johnson, Lindsy, "Case Studies of Water Trail Impacts on Local Communities," at 6 (attached
hereto as Attachment 3). This trend certainly includes North Carolina. The number of days
City of Rockingham, North Carolina, and American Rivers' Comments
Alcoa Generating, Inc., Yadkin Hydroelectric Project (P-2197-073)
Progress Energy Carolinas, Yadkin-Pee Dee River Hydroelectric Project (P-2206-030)
-17-

spent canoeing and kayaking in North Carolina is expected to increase 30% more than
population growth through 2050. Id. at 95. Rivers like the Pee Dee will receive significant
attention as a destination for paddlers in the region. This increase in demand will have marked
economic and social significance for rural communities in Stanly, Montgomery, Anson, and
Richmond counties.
The City of Rockingham has identified the development of local river resources and the
establishment of water trails as a requirement for economic development in the region for a
number of reasons.
• With adequate river flows the Pee Dee River and surrounding tributaries have
tremendous potential to attract paddlers from all over the region and possibly the country.
This will enable citizens of a number of counties to enjoy the economic benefits
associated with increased tourism.
• There is little up-front monetary investment. Establishing and promoting water trails are
a sustainable form of development without major infrastructure demands.
• A water trail can act as an anchor attraction around which the local economy can develop
to supply related services and goods. The City of Rockingham views water trail
development as an investment. Profits from water trail development will come over the
long haul as the public becomes aware of the region's river resources and visits the area.
• American Rivers is in the first phase of development of a water trail that will extend from
Blewett Falls Dam to the Coast. With adequate flows, the trail could be expanded to
include the Tillery Reach, creating a unique and desirable destination for paddlers.
The DEIS states it will cost Progress Energy $129,000 year to release recreational flows
of 1,200 cfs on the Tillery Reach of the Pee Dee River every weekend and holiday during the
recreational season. DEIS at 288. The DEIS fails to provide sufficient information relating to
the economic benefits communities in the Pee Dee region will experience if adequate flows
(1,200 cfs) are restored to the Tillery Reach. Over the long haul, economic gains created by
increased river-based tourism on the Yadkin-Pee Dee River will greatly outweigh annual losses
incurred by Progress Energy from releasing adequate river flows. Increased tourist dollars will
create a "ripple effect" within the regional economy. Each dollar spent by a boater, angler, or
nature enthusiast increases another person's income, enabling that person or business to spend
more. A 1999 study on the economic impacts of paddling trails on rural communities estimates
that for every dollar spent it ripples through the economy for an overall effect of $1.50. See
Attachment 3, at 76-77 (citing Anderson, Alan, "Outdoor Recreation, Community Development,
and Change Through Time: A Replicated Study of Canoeing and Trout Angling in Southwestern
Wisconsin.").
Although there is no comprehensive study addressing the economic impacts of paddling
on communities near the Pee Dee River, a comparison can be made to Vernon County and the
City of Rockingham, North Carolina, and American Rivers' Comments
Alcoa Generating, Inc., Yadkin Hydroelectric Project (P-2197-073)
Progress Energy Carolinas, Yadkin-Pee Dee River Hydroelectric Project (P-2206-030)
-18-

Kickapoo River in southeast Wisconsin. Both communities are primarily rural but relatively
close to major metropolitan areas, both suffer from economic stagnation due in part to a failing
textile industry in North Carolina and an ongoing farming crisis in Vernon County, both
communities are dedicated to developing their river resources, and both communities are within
close proximity to a 20 mile stretch of free flowing river.
Communities in Vernon County have benefited significantly from their close proximity
and dedication to developing recreation on the Kickapoo River. Paddlers spent $1.1 million in
the Kickapoo area in 1999 alone, leading to a total economic impact of just over $1.75 million
and contributing to a total of 45 jobs in the area. See Attachment 3, at 77. When adjusted for
inflation to 2007 dollars, these values would be substantially higher.
The DEIS determines that the flows proposed by American Rivers and FWS on the
Tillery reach, which would cost Progress Energy $1,227,500 annually, would not be worth the
benefits created by these flows. The DEIS also claims, however, that the 330 cfs flows proposed
by Progress Energy, which would cost $535,000 annually, would be worth the economic loss.
Yet the DEIS does not describe what standard it used to make this determination. Setting aside
the difficulty of placing a monetary value to aquatic habitat or recreational enjoyment, FERC
easily could have ascribed a value to each user day and compared the revenue lost with the
economic benefits of recreational usage of the Yadkin-Pee Dee River. Without a comprehensive
study on the economic benefits of river recreation, FERC nor Progress Energy can speculate to
what the true costs and benefits of adequate river flows are.
The economic evidence that FERC considered suggests that minimum flows of 800 to
1,000 cfs would generate tourism dollars that would exceed the anticipated cost of $1,227,000.
The DEIS cites a recreation study conducted in 2005 on the Yadkin-Pee Dee River. See DEIS at
218 (referencing ERM and Global Insights, 2005). That study found that there are 72,000 user
days on the river annually. Because a comprehensive economic study on river recreation has yet
to be conducted on the Yadkin-Pee Dee River it is impossible to guess the true economic value
of a "user day." However, numerous such studies have been conducted on a variety of rivers
throughout the country. These studies found that paddlers spent between $27 and $63 a day in
local communities. Using these numbers, Yadkin-Pee Dee River users spent between
$1,944,000 and $4,536,000 in 2005. Attachment 3, at ii.
These numbers are also consistent with a recent study ofwildlife-refuge recreation
submitted to FERC by FWS. According to the study,
visits to national wildlife refuges generate substantial economic activity. In FY
2006, 34.8 million people visited refuges in the lower 48 states for recreation.
Their spending generated almost $1.7 billion of sales in regional economies. As
this spending flowed through the economy, nearly 27,000 people were employed
and $542.8 million in employment income was generated.
City of Rockingham, North Carolina, and American Rivers' Comments
Alcoa Generating, Inc., Yadkin Hydroelectric Project (P-2197-073)
Progress Energy Carolinas, Yadkin-Pee Dee River Hydroelectric Project (P-2206-030)
-19-

Carver, Erin, and Caudill, James, "Banking on Nature 2006: The Economic Benefits to Local
Communities of National Wildlife Refuge Visitation," e-Library no. 20071205-5010, at ii.Z
Given that the Tillery Reach falls within the Pee Dee National Wildlife Refuge, DEIS at 166, this
study is highly relevant to the economic value of recreational flows. And the study suggests that
the Tillery Reach would have a substantial impact on local economies: according to the numbers
in the paragraph above, 72,000 user-days would directly generate $3.5 million in income for
local economies, and substantially more through increased employment for local residents. This
is precisely in line with the income predicted by the Johnson study above.
The above numbers are only an estimation and do not take into account different types of
river users. Birdwatchers and swimmers typically spend less and hunters and fishermen typically
spend more. The City of Rockingham is dedicated to developing their river resource to serve as
an anchor attraction for the region by establishing paddling trails and by working with American
Rivers to gain exposure for the river and the region. In order to achieve these economic goals
there needs to be water in the river. Until FERC considers the economic cost of diverting this
water for Progress Energy's benefit, its NEPA obligations cannot be considered complete.3
B. The DEIS Incorrectly Balances Costs and Benefits when Recommending Minimum
Flows
Ultimately, the DEIS recommends that the minimum flows agreed upon in the CSA be
incorporated into the FERC license. In reaching this recommendation, it concludes that the
benefits of increased flows do not outweigh the cost of lost power generation. There are
numerous problems with this conclusion.
1. The DEIS Fails to AE~regate Benefits of Increased Flows
Most importantly, the DEIS considers the benefits of increased flows separately, in
isolation from each other. Under this "divide and conquer" approach, the DEIS need only weigh
the increase in available habitat against the $1.23 million cost to Progress Energy from FWS
minimum flows, or the increase in recreational opportunities against the $129,000 cost of the
City of Rockingham's proposed recreational flows. See, e.g., DEIS at 273 ("The greater annual
cost of $1,227,500 for the higher flows recommended by FWS/American Rivers would not be
worth the minor incremental improvement to downstream aquatic habitat."), DEIS at 288 ("We
do not find that the current and projected use warrants boatable flows every weekend and holiday
during the entire recreation season, given the relatively low use of this reach and the additional
annual cost of $129,000 to implement the 1,200 cfs alternative ...."). Even setting aside the
fact that it is difficult, if not impossible, to weigh the cost of lost power against the
a This 382-page study was filed with FERC less than a week ago, so neither American Rivers nor
the City of Rockingham have been able to thoroughly review it. Nevertheless, it contains
precisely the type of information that FERC must analyze in detail before it can accurately
capture the benefits of recreational flows in the Tillery Reach.
s FWS recently filed a study with FERC that confirms the
City of Rockingham, North Carolina, and American Rivers' Comments
Alcoa Generating, Inc., Yadkin Hydroelectric Project (P-2197-073)
Progress Energy Carolinas, Yadkin-Pee Dee River Hydroelectric Project (P-2206-030)
-20-

environmental benefits and recreational enjoyment that would result from a healthy river -
especially so when the DEIS does not disclose the standards it used for making this decision - it
is wholly unfair to make the incomplete comparison that the DEIS performs.
In order for the DEIS's evaluation to be meaningful, it must weigh the cost of increased
flows against all benefits to the river and surrounding community -benefits to fish, benefits to
mussels, benefits to recreation, and benefits to the local economy. Any such analysis is
completely missing from the DEIS. See 16 U.S.C. § 803(a)(1) (listing factors FERC to which
FERC must give equal consideration).
On a similar note, the DEIS fails to consider the varied benefits that changes to the
minimum flow schedule would bring. For example, it considers American Rivers' proposed
minimum flow only in the context of fish habitat, and does not evaluate the effect it would have
on freshwater mussels or on the recreational flows proposed by the City of Rockingham. See
DEIS at 102-12. Habitat flows are directly linked to recreational use because enhanced habitat in
turn provides additional recreational opportunities for sportfishing. Likewise, the DEIS does not
consider whether the proposed recreational flows would have any beneficial effect on aquatic
species. In this manner, the DEIS fails to recognize the interrelated nature of the uses of the river
that are not related to power generation.
2. The DEIS Provides a Disingenuous Description of the Cost of Increased
Flows
The DEIS fails to provide an honest evaluation of the cost to Progress Energy of
increasing minimum flows. Despite the fact that Progress Energy describes itself as "a Fortune
250 energy company with more than 21,000 megawatts of generation capacity and $10 billion in
annual revenues," see http://www.progress-energy.com/aboutus/index.asp, the balance struck by
the DEIS is decidedly in Progress Energy's favor. Indeed, while the DEIS is quick to enumerate
the burden of increased flows on Progress Energy, it does not address the benefits that it will
receive under other aspects of the new flow regimes.
The most significant example of this is in the discussion of the $1.23 million cost to
Progress Energy that would result from the American Rivers/FWS minimum flow proposal. The
DEIS does not describe how it reached this amount, but presumably it represents the amount of
peak power generation that would be lost at Tillery Dam due to increased releases through the
trash gate. Yet the DEIS does not explain a key factor that mitigates this cost: the increased
flows that will be released from Falls Dam under the terms of the GSA.
As the DEIS describes, Alcoa Generating has agreed to a new daily minimum flow
schedule from Falls Dam: 1,000 cfs from June 1 to January 31; 2,000 cfs from February 1 to
May 15; and 1,500 cfs from May 16 to May 31. DEIS at 262. While the DEIS does not describe
how this schedule differs from the existing weekly releases from Falls Dam, it estimates that this
will have a cost of approximately $310,000 in lost energy to Alcoa Generating. DEIS at 292.
Given that Falls Dam is operated in run-of--river mode, DEIS at 14, Progress Energy can be
City of Rockingham, North Carolina, and American Rivers' Comments
Alcoa Generating, Inc., Yadkin Hydroelectric Project (P-2197-073)
Progress Energy Carolinas, Yadkin-Pee Dee River Hydroelectric Project (P-2206-030)
-21-

expected to reap at least a $310,000 benefit from these increased releases. The DEIS does not
explain why Progress Energy should be the sole beneficiary of this increased flow, or why it
should be allowed to pass along the cost of its environmental mitigation measure to Alcoa.
Before the DEIS can weigh the cost and benefits of increased flows in the Tillery Reach, it must
accurately assess the cost of those flows on Progress Energy.
The DEIS also fails to consider measures that would have mitigated the cost of lost
energy generation on Progress Energy. For unexplained reasons, the DEIS does not evaluate the
costs associated with installing a turbine capable of releasing flows in the range of 800-1,500 cfs.
Such a result seems to be an ideal way of balancing power generation with the minimum flows
needed to sustain the river. Before it can be complete, the DEIS should evaluate such an option.
It is also worth acknowledging the dramatic difference in revenues that the DEIS
predicts. Under the Staff-Recommended Alternative, the DEIS estimates that Alcoa Generating
will generate $39,965,530 in power annually at a cost of $39,190,960, for annual net benefit of
$774,570. DEIS at 239. This represents less than a 2% return on the cost of electricity
generation. The outlook for Progress Energy could hardly be more different; the DEIS estimates
that it will produce $15,317,500 in power at a cost of $9,143,960, for an annual net benefit of
$6,173,540, a 68% return on the cost of generation. Even with an additional $700,000 cost
factored in for the American Rivers/FWS minimum flows, Progress Energy's return would stand
at 60%.
The rising cost of other sources of energy will only serve to increase Progress Energy's
expected profits from its hydroelectric operations. Allowing it to continue operating its dams
under the staff-recommended conditions would be nothing short of a windfall. For too long have
the river and surrounding communities sacrificed for the benefit of Progress Energy. For the
health of the river and the region a more appropriate balance should be struck.
3. The DEIS Fails to Consider the Secondary Benefits of Increased Flows
Finally, as touched on above, in balancing the costs and benefits of increased minimum
flows the DEIS wholly fails to consider the economic benefit that would flow to communities
located near the Tillery Reach. What little evidence there is suggests that these benefits would
easily exceed the cost of the lost energy generation to Progress Energy. Indeed, with 72,000
user-days on the river, each user would have to spend only $10 in local communities for the
economic benefit to exceed the $695,000 cost of increasing flows from 330 cfs to 900 cfs. The
DEIS must consider this information before the NEPA analysis can be considered complete.
C. Consistency with Comprehensive Plans
The DEIS lists nineteen comprehensive plans which Staff reviewed under FPA section
10(a)(2), to determine "the extent to which [the] project is consistent" with such plans. DEIS at
300. It contains no summary of the plans, no description of how the staff recommendation is
consistent with the plans, and no conclusion. This is unreviewable and violates FERC's
City of Rockingham, North Carolina, and American Rivers' Comments
Alcoa Generating, Inc., Yadkin Hydroelectric Project (P-2197-073)
Progress Energy Carolinas, Yadkin-Pee Dee River Hydroelectric Project (P-2206-030)
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obligation under FPA section 313(b) and the APA above. Further, it violates FERC's obligation
to take a hard look at such plans under FPA section 10(a)(2).
Under FPA section 10(a)(2), FERC must consider the "extent to which a project is
consistent with a comprehensive plan" adopted by another agency, "in order to ensure" that the
project is best adapted to the plan ultimately adopted under FPA section 10(a)(1) for
advancement of all beneficial uses of these waters. 16 U.S.C. § 803(a)(2). This obligation
extends beyond mere consideration of such other plans. FERC must seek "to reconcile
inconsistencies between those agencies' recommendations and the Commission's plans to the
extent possible, and to explain its reasons for departing from the agencies' recommendations
when it concludes it must do so in order to fulfill its statutory mandate." Friends of the
Ompompanoosuc v. FERC, 968 F.2d 1549, 1554 (2nd Cir. 1992). In that case, FERC licensed a
project to develop a waterfall in a manner inconsistent with a State plan that barred development
of that waterfall for protection of its scenic beauty. The court found that the license's
requirement for a continuous flow release over the waterfall "would minimize conflict with the
[plan] and appropriately balance power needs and aesthetic values." Id. at 1554.
The Commission is required to give due consideration to all recommendations
from relevant agencies, to reconcile inconsistencies between those agencies'
recommendations and the Commission's plans to the extent possible, and to
explain its reasons for departing from the agencies' recommendations when it
concludes it must do so in order to fulfill its statutory mandate.
Id.
The City of Rockingham raised the issue of comprehensive plans in its recommendations
for new license conditions for the Yadkin-Pee Dee Project. See e-Library no. 20070514-5158.
Progress Energy later filed a response to those comments. See e-Library no. 20070618-0116
("Progress Energy Response"). We take this opportunity to address Progress Energy's filing.
Progress Energy generally disagrees that our specific recommendations for ecological
and recreational flow and recreational facilities enhancements are supported by the North
Carolina Comprehensive Outdoor Recreation Plan ("SCORP") (2003-2008), the Yadkin-Pee Dee
River Basinwide Water Quality Plan ("Basin Plan") (2003), and the North Carolina Wildlife
Resources Commission's Fisheries and Wildlife Management Plan for the Yadkin River Basin
(2005) ("Fisheries and Wildlife Management Plan"). See Progress Energy Response, at 1. For
the reasons stated below we maintain that the Commission should consider our recommended
conditions because they are consistent with the stated objectives of the comprehensive plans and
will mitigate the Project's impacts on beneficial uses of project waters
1. North Carolina Comprehensive Outdoor Recreation Plan
Progress Energy argues that Rockingham's recommended recreational flow and facilities
enhancements are not justified because they are not specifically identified in the SCORP. See
City of Rockingham, North Carolina, and American Rivers' Comments
Alcoa Generating, Inc., Yadkin Hydroelectric Project (P-2197-073)
Progress Energy Carolinas, Yadkin-Pee Dee River Hydroelectric Project (P-2206-030)
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Progress Energy Response, at 2. Progress Energy misreads the purpose of comprehensive plans.
There is nothing in the FPA or the Commission's regulations that requires the comprehensive
plan to state site-specific measures for project lands or waters in order to be reviewed by the
Commission under Section 10(a)(2). While comprehensive plans may not include site-specific
measures, it is customary for plans to include substantive requirements. Thus, the SCORP must
include not only "an evaluation of the demand for and supply of outdoor recreation resources and
facilities in the State," but also "a program for the implementation of the plan. " 16 U.S.C. §
4601-8(c) (emphasis added). The Commission must assure that the new license includes
conditions consistent with the SCORP's requirements.
Our NREA Comments identified substantive objectives in the SCORP and explained why
our recommendations would be consistent with those objectives. For example, the SCORP
states, "[t]he Wildlife Resources Commission (WRC) will construct new boating and fishing
access areas and renovate older ramps as resources allow," in order to achieve the goal to
"[p]rovide improved outdoor recreation resources and services to meet the needs of a growing
and changing population." To achieve this goal on the Pee Dee River, Rockingham
recommended Condition 4, paragraphs C through E, which proposes boat ramp and other
improvements (e.g., restroom and trash facilities) to existing public boating access areas at
Highway 109, Grassy Island, and Anson County. Paragraph F proposes a feasibility study to
identify and recommend new access points and facilities within the Tillery Reach, where fishing
and boating presently are limited by lack of public access. We explained that such enhancements
were needed to meet existing demand as documented in the responses Progress Energy received
to its recreation survey and the projected increase in demand documented in the SCORP. For
example, Progress Energy received the following comments regarding the Anson County access
area (aka Pee Dee access area):
[N]eed for a toilet facility, a marina, graded parking lots, an extended boat ramp,
beach and recreation areas, handicapped access, bigger signs leading to the access
area, and trash containers. They were also concerned that when the water level is
low it can become dangerous on the docks... .
[A]ddition of a camping area, a toilet facility, trash cans, a marina, lighting
around the parking lot to increase security, designated parking areas, improved
boat ramps, the removal of debris around the ramps, marking stumps, planting
fish, regulating and limiting jet ski use, handicapped fishing access, and having a
game warden check in to maintain and [sic] presence.
New License Application ("NLA") at E7-2-31. Progress Energy's proposed recreational
enhancements address some, but not all of the needs expressed in the survey. See CSA, p. 31.
For example, at the Anson County access area, neither the NLA nor the CSA provides for
camping, law enforcement patrols, or designated jet ski areas to reduce conflicts with fishermen.
See id.
City of Rockingham, North Carolina, and American Rivers' Comments
Alcoa Generating, Inc., Yadkin Hydroelectric Project (P-2197-073)
Progress Energy Carolinas, Yadkin-Pee Dee River Hydroelectric Project (P-2206-030)
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Further, Progress Energy does not propose any measures which would provide additional
access for public boating and fishing in the Tillery Reach. Under the existing license the
recreational potential of the Tillery Reach has been limited by lack of access and instream flow.
However, the recreational potential of this reach would be considerable if these limiting factors
were addressed. Based on our review, the record does not include study of future demand, but
according to the SCORP and other regional studies, it appears that Progress Energy's proposals
are inadequate to address future needs of a "growing and changing population." see, e.g.,
Yadkin-Pee Dee Lakes Project, North Carolina's Central Park: The Economic Development
strategy on the Central Park Region of North Carolina (Sept. 1999).
The SCORP states: "the Division of Parks and Recreation will encourage state and
federal agencies to consider SCORP-identified needs when planning for additional recreational
facilities and areas," in order to achieve the goal to "[d]evelop a unified constituency that will
work to improve outdoor recreational resources in the future." SCORP at VII-5. VII-6. To
achieve this goal on the Pee Dee River, Rockingham's recommended Condition 3 requires that
Progress Energy submit for Commission approval a Recreation Management Plan within one
year of license issuance. We recommended that the Plan be developed in consultation with a
Recreation Management Committee -including, at a minimum, the North Carolina Wildlife
Resources Commission, North Carolina Division of Water Resources, the North Carolina
Department of Parks and Recreation, Richmond County, and City of Rockingham -which would
be convened within two months of license issuance. See Rockingham NREA Comments, at 12.
The Committee would adopt written protocols for schedule, conduct of meetings, and dispute
resolution. We recommended that the Plan contain design specifications and performance
standards for facilities, the frequency of service for facilities, and triggers for improvements in
facilities if use exceeds expectation or as appropriate for public health and safety. We appreciate
the Staffls views to the extent they are consistent with these recommendations.
2. Fisheries and Wildlife Management Plan
As with the SCORP, Progress Energy argues that the objectives of the Fisheries and
Wildlife Management Plan for the Yadkin River Basin are not directly applicable to this
relicensing because those objectives are basin-wide rather than project-specific: "Once again,
this comprehensive plan is not focused upon project specific recommendations, but actions that
have the ability to protect and preserve the entire watershed." (Progress Energy Response, at 3).
Our NREA comments identified substantive objectives in the Fisheries and Wildlife
Management Plan and explained why our recommendations would be consistent with those
objectives. For example, one of the actions identified in the Wildlife Management Plan as
necessary to conserve species and habitat within the Yadkin-Pee Dee basin is to "[n]egotiate a
more natural flow regime in the main stem during the [FERC] relicensing process and support
mitigation and restoration for hydropower impacts." Rockingham NREA Comments, at 3 (citing
Wildllife Management Plan, p. 353). One of the priority watersheds for freshwater conservation
within the basin includes the "Lower Pee Dee River (riverine section below Tillery Dam, and
downstream of Blewett Falls Dam)." Id.
City of Rockingham, North Carolina, and American Rivers' Comments
Alcoa Generating, Inc., Yadkin Hydroelectric Project (P-2197-073)
Progress Energy Carolinas, Yadkin-Pee Dee River Hydroelectric Project (P-2206-030)
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Rockingham's recommended Condition 1 proposed a minimum instream flow schedule
of 800 to 1,000 cfs year-round from the Tillery development in order the preserve and enhance
the aquatic resources in the Tillery Reach. See Rockingham NREA Comments, at 6. It proposes
a spring spawning flow schedule ranging from 1,500 to 1,800 cfs below Tillery development
from March 1 through May 15. See id. at 7. It also proposes that Progress Energy develop and
implement appropriate ramping rates between peaking and minimum flows to minimize the
impacts of hydropeaking. See id. While still conservative, our recommended flow schedule
more closely mimics the unregulated hydrograph for the Pee Dee River than the flow schedule
proposed in the NLA (see NLA, p. E4-101) or CSA (see CSA, p. 24). Further, our
recommended ecological flow schedule is consistent with the FWS's FPA section 10(j)
recommendations. See FWS, Comments, Section 10(j) Recommendations, Terms and
Conditions for the Yadkin-Pee Dee Hydroelectric Project," e-Library no. 20070509-5039, pp. 6-
7 (May 9, 2007).
FERC Staff should require Progress Energy to supplement the record with an explanation
of how its proposed instream flow schedule for the Tillery development will assure consistency
with the Fisheries and Wildlife Action Plan's objectives. In the alternative, Progress Energy
should provide the legal basis for its argument that the Commission is not required to reconcile
the new license with the objectives stated in the Fisheries and Wildlife Action Plan.
3. Basin Plan
Progress Energy argues that our recommendations for site specific measures are "not
justified by the existence of wide ranging basinwide and statewide goals" contained within the
Basin Plan. See Progress Energy Response, at 1. Plainly this is not the case.
The Basin Plan includes enforceable regulations in the form of designated beneficial
uses, water quality criteria to protect such uses, and anti-degradation policy for the specific
project reaches (Tillery Reservoir, Tillery Riverine Reach, and Blewett Falls Reservoir). The
beneficial uses are: water supplies, primary and secondary recreation uses, including fishing,
wildlife, fish, aquatic life propagation and survival, and agriculture. See Basin Plan, p. 54.
Water quality criteria include numeric standards deemed necessary to protect these uses; for
example, the applicable DO standard provides that DO concentrations shall be "not less than a
daily average of 5.0 mg/1 with a minimum instantaneous value of not less than 4.0 mg/1." 15A
NCAC § 02B.0211(3)(b); Basin Plan, p. 103. The anti-degradation policy provides that existing
uses, and the water quality to protect such uses, shall be protected, and that activities which
affect state waters shall not be permitted unless such uses are protected. See 15A NCAC
02B.0201.
While the State has primary authority to protect state water quality standards through the
water quality certification process required under Clean Water Act section 401, 33 U.S.C. §
1341, the Commission also has a duty under FPA section 10(a)(2) to assure that the project under
City of Rockingham, North Carolina, and American Rivers' Comments
Alcoa Generating, Inc., Yadkin Hydroelectric Project (P-2197-073)
Progress Energy Carolinas, Yadkin-Pee Dee River Hydroelectric Project (P-2206-030)
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the new license will be consistent with standards articulated in the Basin Plan. See Scenic
Hudson, 354 F.2d at 620.
As discussed in Section IILC.1, supra, our recommended Conditions 3, 4, and 5 are
intended to protect the designated use of secondary recreation, specifically fishing and
recreational boating, in the Tillery Reach. Based on our review of the NLA, as well as
interviews with local boaters and fisherman, it appears that inadequate flows, facilities, and
access under existing conditions have prevented recreational boating in the Tillery Riverine
Reach. See Rockingham NREA Comments, at A.3-1, A.5-1, A.5-2, A.6-l, A.6-2.
As discussed in Section IILC.2, supra, our recommended Condition 1 is intended to
mitigate project impacts on the designated use of aquatic life by providing a more natural flow
regime. According to the Basin Plan, sub-basin 03-10-07, which includes the Pee Dee River
from Tillery Dam to its confluence with Turkey Creek, is impaired for low DO due in part to
hydromodification. See Basin Plan, p. A-III-29. The Commission must assure that the new
license is conditioned to be consistent with the Basin Plan's requirements.
FERC Staff should require Progress Energy to supplement the record with an explanation
of how its proposed aquatic resource and recreational enhancements will ensure consistency with
the Basin Plan's objectives. In the alternative, Progress Energy should provide the legal basis for
its argument that the Commission is not required to reconcile the new license with the objectives
stated in the Basin Plan.
IV.
CONCLUSION
Progress Energy's license, once it is granted, will likely endure for 50 years. The terms
that are ultimately included in the license will affect generations of North Carolina residents. For
the well-being of the river, its users, and the surrounding communities, it is imperative that the
Environmental Impact Statement not defer to the CSA. Instead, it must take its mandated "hard
look" at the effects of the alternate flow regimes proposed by interested parties. Only then can
the Commission, and the public at large, understand the effects of its decisions.
The City of Rockingham and American Rivers thank the Commission for this opportunity
to comment on the DEIS. We respectfully request that the Commission revisit its recommended
330 cfs MFS and adopt the MFS proposed by American Rivers and FWS, and the recreational
flows proposed by the City of Rockingham.
City of Rockingham, North Carolina, and American Rivers' Comments
Alcoa Generating, Inc., Yadkin Hydroelectric Project (P-2197-073)
Progress Energy Carolinas, Yadkin-Pee Dee River Hydroelectric Project (P-2206-030)
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