20070812 Ver 2_Draft Conditions_20090428 (6)

May 1, 2009
Version 1.0
Dissolved oxygen - It is clear that dissolved oxygen in the waters below some of the
lakes (notably Badin and Falls Lakes) is less than the state water quality standard of 5
mg/1 especially in the summer. APGI has proposed a schedule in the Relicensing
Settlement Agreement to upgrade the turbines at the dams in a sequential manner and
thereby improved dissolved oxygen in the water. Indeed, APGI has submitted data
showing that dissolved oxygen levels below Badin Lake have improved after
improvements to Turbine Unit 4 in 2001 and Turbine Unit 1 in 2008 (letter from APGI
dated February 16, 2009). However after those two improvements, dissolved oxygen
levels were still below the water quality standard of 5 mg/1 about 16% of the time. In
addition, the Yadkin Water Quality Monitoring report (Normandeau 2005) discussed the
effect of the 2001 improvements to Turbine Unit 4 as a result of intensive studies of
various operating alternatives in 2001 and 2004. Those studies showed about a 2 mg/l
increase in dissolved oxygen in the water as a result of improvements to Turbine Unit 4.
APGI also reported that the improvements to Turbine Unit 1 done in 2008 showed about
a 1 to 2 mg/1 increase in dissolved oxygen. However APGI did not conduct an in-depth
study of the effectiveness of the upgrade of Turbine Unit 1 in 2008 and the addition of
the second, upgraded turbine does not seem to lead to directly linear increase in dissolved
oxygen. Therefore since this in-depth study was not done, it is not clear to DWQ staff
whether the planned upgrades in the remaining turbines (including the turbines at High
Rock Lake) will meet water quality standards. Therefore APGI will be required to
conduct a study similar to the 2004 study on the Badin lake turbines during the summer
of 2009 (with both turbines upgraded) in order to provide scientific and engineering
assurance that the plan to meet dissolved oxygen standards will be successful below these
lakes.
Performance/surety bond - APGI or its parent company Alcoa, shall provide a surety
bond (or equivelant instrument) in favor of the State of North Carolina, executed by a
surety approved by the Commissioner of Insurance. This bond shall be in an amount
sufficient to cover all costs associated with modifications at High Rock, Tuckertown,
Narrows (Badin) and Falls Lakes for dissolved oxygen improvements and including the
monitoring necessary to show the success of these improvements. This bond shall be
provided within six months of receipt of the Certification, must be continuous in nature,
must bind to APGI or Alcoa as well as their heirs and successors. The bond shall be
conditioned upon the faithful performance of the requirements set forth in this
Certification. Upon filing the bond with the Department, APGI or its parent company
Alcoa, or its heirs and successors shall lose all right, title, and interest in the bond while
the bond is held by the Department. The bond shall be maintained until the dissolved
oxygen improvements and the dissolved oxygen monitoring confirms that the dissolved
oxygen standard has been met for at least three (3) years and approved in writing by the
Division unless released only upon written notification from the Department. In no event
shall the liability to the surety exceed the amount of the surety bond required by this
Condition. Notification shall be given upon completion of compliance or acceptance by
the Department of a substitute bond. This bond shall remain in force until canceled by
the surety. Cancellation by the surety shall be effectuated only upon 60 days written
notice thereof to the Department and to the operator. If the surety bond is canceled, then
APGI or its parent company Alcoa as well as their heirs and successors shall provide a
new surety bond within six months that also meets the same requirements as previously
described in this Condition. If that event does not occur, then this Certification is null
and void. This surety bond may be terminated by the State of North Carolina upon an
affirmative showing that the dissolved oxygen improvements and the dissolved oxygen
monitoring have been successfully met.
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