NC Legislative Leaders Discuss Advantages of State Trust Holding License for Yadkin Hydroelectric Project

The legislation would allow the state to acquire and operate the Yadkin Hydroelectric Project as opposed to Alcoa Power Generating Inc. (“Alcoa”), which has applied for a 50-year federal license to monopolize control of and exploit the water and hydroelectric power generated by North Carolina’s Yadkin River.

The Project includes dams and powerhouses along a 38-mile stretch of the Yadkin River at High Rock, Tuckertown, Narrows and Falls Reservoirs in Davie, Davidson, Rowan, Montgomery and Stanly counties. More than 100 citizens from Anson, Davie, Mecklenburg, Montgomery, Richmond, Stanly, Davidson, Cabarrus and Rowan counties attended the meeting in support of the legislation.

Senator Fletcher Hartsell (R-Cabarrus), a primary sponsor of SB 967, reminded the committee members of the importance of the legislation and the fact that SB 967 has “absolutely nothing to do with taking over a private business.” Senator Hartsell also refuted Alcoa’s claims about the cost of recapturing the license and provided committee members with copies of Alcoa’s license application stating that the re-purchase price is $24.16 million.

Gene Ellis, a spokesman for Alcoa, again read prepared remarks to the committee. His remarks included the outrageous claim that Alcoa had not opposed the posting of “Fish Consumption Advisory” at Badin Lake. In response, Bruce Thompson, a lobbyist for Stanly County, showed the committee a copy of the legal filing Alcoa made on April 9, 2009, that challenged the posting of these signs. According to Thompson, challenging the posting of the warnings was “fundamentally irresponsible, especially in light of the fact that scientists have traced the PCBs in the fish directly to the lake sediments adjacent to Alcoa’s operations.”

Committee Chair Cullie Tarleton (D-Watauga) then called upon Faison Hicks, the Special Deputy Attorney General representing Governor Bev Perdue in the relicensing case before the Federal Energy Regulatory Commission (“FERC”). Hicks stated that “the Yadkin River’s hydroelectric generating potential, its capacity to function now and in the future as a robust economic development engine for the region’s people, its capacity for supplying the people of the region with water, its recreational and aesthetic resources and its many other invaluable properties should be harnessed and carefully used for the public benefit,” not for an unregulated company that provides no benefit to the State.

Professor Richard Whisnant of the UNC School of Government also made a presentation to the committee, pointing out that water related decisions might differ significantly depending on whether Alcoa or the Yadkin River Trust held the hydro license. Professor Whisnant focused on five issues that would be affected by who holds the license: (1) operational discretion; (2) adaptive management; (3) charges for water withdrawals; (4) scope and pace of property cleanup; and (5) the licensee as a stakeholder in river-basin issues generally.

Chairman Tarleton then called on questions from committee members. In response to the questions, Senator Hartsell assured the committee that the legislation is aimed only at this project and would not apply to any utility providers currently regulated by the State as those companies provide great benefits to the citizens of the State.  Senator Hartsell also pointed the committee to Alcoa’s relicensing application where it acknowledged the right of the federal government to have the license returned. 

Senate Bill 967 will establish a Trust for the benefit of the entire state that would develop, sell and distribute hydroelectricity generated by the Project for the benefit of the people of North Carolina, as well as maintain recreational facilities and ensure equitable distribution of water for public purposes at all times. The Trust will honor aspects of the Relicensing Settlement Agreement (RSA) negotiated by local government and environmental groups in 2008, including water for the City of Albemarle, a comprehensive drought management plan (the “Low Inflow Protocol”), water quality improvements for the Yadkin, and new and expanded public recreation facilities. It will provide more benefits to state residents than Alcoa’s plan, including priority consideration to local needs, with the intent of restoring and improving environmental, public health, economic and job considerations.  

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“Fifty years ago, Alcoa received a no-bid contract to operate hydroelectric facilities on the Yadkin River for 50 years.  That operating license was issued on behalf of the people of the Yadkin River basin and the State of North Carolina and that license has expired.  It has been so long that we have forgotten that Alcoa is our tenant, and the tenant would have us forget that we are the landlord,” said state Sen. Fletcher L. Hartsell, Jr. (R – Cabarrus). “The lease is up and it is time for the waters of the Yadkin to be returned to the benefit of the citizens.”

“On behalf of the Stanly County Board of Commissioners, we were glad to hear leaders in the legislature endorse the Yadkin River Trust for water access and water quality,” said Stanly County Commissioner Lindsey Dunevant.  “Their comments show that they get it – the Yadkin River is a public water resource that is being neglected by the Project’s current operator in favor of selfish interests rather than the betterment of our state, and that this must change.”

About This Effort

In 1958, Alcoa, the world’s leading producer of primary aluminum, secured a federal hydroelectric license for the Yadkin Project on the Yadkin River in Stanly, Davidson, Montgomery and Rowan Counties in the Central Piedmont.  In return, Alcoa promised aluminum manufacturing jobs for Stanly County for years to come. Alcoa has now essentially disappeared as a major employer in the region and shut down its manufacturing plants, but it wants to continue reaping the benefits of the Yadkin River after its license expires in April of this year. In addition, Alcoa discharged hazardous pollutants into North Carolina air and waterways for decades while harvesting immense profits from the Yadkin River, but has yet to finish cleaning up that contamination. Alcoa has filed an application with the Federal Energy Regulatory Commission (FERC) to obtain another 50-year license. If Alcoa is successful, one of North Carolina’s most valuable water resources will be used to maximize Alcoa’s profits, instead of being used to benefit the people of North Carolina, who themselves are in dire need of affordable electricity, local economic development, and clean, adequate drinking water.