20070812 Ver 2_Yadkin's waters brew a fight_20090330

Yadkin's waters brew a fight
Subject: Yadkin's waters brew a fight
From: Susan Massengale <[e-mail]>
Date: Mon, 30 Mar 2009 14:10:12 -0400
To: DWQ Clips <[e-mail]>
From the Charlotte Observer
Yadkin's waters brew a fight
By Jack Betts
Posted: Sunday, Mar. 29, 2009
RALEIGH The Battle of the Yadkin River is generating almost as much controversy as
its waters have generated electrical power. Before it's settled, this scrap may
involve Gov. Bev Perdue in a process that could lead to a new owner of four
hydroelectric facilities that once helped produce a steady supply of aluminum.
For much of the 20th century, Alcoa's aluminum smelter at Badin in Stanly County
was a major regional employer, a mainstay of the economy in the central Yadkin River
basin with its 1,000 or so employees producing aluminum and the hydropower that
fueled its operation. So when Alcoa Power Generating Inc.'s 50-year license to
operate came up for renewal, the company had every expectation of local and state
support for a renewal for another half-century.
*Rethinking state water use*
But that was before a crippling drought in 2008 turned policymakers' thoughts
toward the use of a river that slices through the state's Piedmont area. It
provides recreation and habitat at a series of lakes running south from I-85 to the
state border and could be a key resource if the state rethinks how to make sure the
central region of the state has enough water.
And that was before it sank in that the aluminum smelter no longer employed its
once-large workforce - one reason Alcoa cited in its 1957 petition as an argument in
favor of a 50-year license. Or that Alcoa had gotten a big break on sales taxes on
its electricity. Or that Alcoa might one day sell its operations to a company
outside the state. And it was before local residents began focusing on reports of
environmental contamination linked to smelter operations.
The state seemed on track to issue a key water quality permit Alcoa needed last year
when a small group of local officials and state legislators began raising questions.
Soon, Gov. Mike Easley and then-Lt. Gov. Bev Perdue asked the Federal Energy
Regulator Commission to delay its relicensing until the state could sort through a
number of environmental and other issues.
That and a bureaucratic foulup have delayed the issuance of the permit - and
provided state officials a window to act. In recent weeks both Republican and
Democratic legislators have taken steps that could thwart Alcoa's license renewal
plan and might even lead to a state-chartered trust to buy and operate the Yadkin
River hydro projects.
State Sen. Stan Bingham, R-Davidson, and other legislators have filed legislation to
impose a tax on the water Alcoa's hydro plants use to generate power.
But what has attracted the most attention is a bipartisan bill backed by key Senate
leaders. Senate Democratic leader Tony Rand, D-Cumberland, and Republican leader
Phil Berger, R-Rockingham, and Sen. Dan Clodfelter, D-Mecklenburg, have joined in
sponsoring Cabarrus Republican Sen. Fletcher Hartsell's bill to create a Yadkin
River Trust that could purchase and operate the hydro plants. It could use proceeds
to clean up environmental problems and provide economic development and recreational
benefits in the region, among other things.
*A rare bipartisan coalition*
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Yadkin's waters brew a fight
What makes this discussion even possible in a pro-business state is the fact that
Alcoa doesn't employ a lot of people here anymore. If Alcoa loses this fight,
that's the key reason. The company lost its best argument for renewal about 1,000
jobs ago.
That bill has generated a lot of attention because its cosponsors are four
Republicans and three Democrats who are sometimes sharply at odds on public issues.
But all are pro-business legislators who in effect support legislation to create a
new owner to buy a going business from a longtime player in state corporate and
civic affairs that doesn't want to sell -- at least not to a group backed by the
state.
"The notion that the state would take over a private business that has been here
nearly 100 years is really appalling," says Gene Ellis, property manager for Alcoa
Generating. "I really can't imagine a business relocating to North Carolina after
viewing this."
Ellis has pointed out that while federal law allows for the "recapture" of power
plants from licensees, it has never before happened and isn't likely to begin now.
*Hartsell: Not a taking*
Hartsell says it isn't a taking. The Yadkin River Trust could purchase the Yadkin
River projects and operate the hydro plants. The money might come from bonds paid
off by revenue from the hydro plants.
But the most anticipated voice in this movement to shift ownership of the plants
belongs to the governor. Earlier this year, Perdue said she was "very troubled" by
the fact that Alcoa would still control much of the river if it gets a renewal.
"It's hard for me to understand how a company could own water rights to an entire
river basin," Perdue told the Observer's Bruce Henderson last month.
*Will governor intervene?*
Speculation is that Perdue's office will soon file a motion with the Federal Energy
Regulatory Commission that would in some way support the notion of a state-created
agency buying and operating the dams. Her office declined to confirm that Thursday.
For Hartsell, this is a rare opportunity to establish firmer state control over a
public resource vital to the region's prosperity and quality of life: "This could
create a partnership to share control of the water and use it for the best interests
of the state," he said. "The real issue is not electricity, but the use of the
state's water."
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