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Legislators: Momentum building to study Yadkin
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Published: July 3, 2008
Before last week, state Senate Majority Leader Tony Rand said, he had never heard of a battle for rights to the Yadkin River.
Since then, the Fayetteville Democrat has joined members of the Yadkin region's delegation in calling for the General Assembly to create a commission to study the possibility of capturing the four dams Alcoa Power Generating Inc. operates on the river and creating a public power authority instead.
The company has characterized that idea as antibusiness and unpopular with voters, but Rand said simply exploring the issue makes sense.
"We should know exactly where we are and what is going on, and I think a study would be a realistic way to do it," Rand said. "It certainly could not hurt any of us to know more about it."
With his support, Rand has contributed to growing momentum for the provision, said Sen. Stan Bingham of Denton, who represents Davidson County.
A provision for such a study was inserted into state budget legislation and has already passed in the Senate. It could be in jeopardy, however, if House and Senate leaders conferring this week keep it out of the General Assembly's final proposal.
"We need to study this and be diligent and careful," Bingham said by phone Tuesday as budget negotiations continued in Raleigh. "There we are bickering over nickels and dimes, and we've got millions of dollars flowing down that river."
Spokesmen for House Speaker Joe Hackney and Senate President Pro Tem Marc Basnight said they did not know their leaders' positions on the proposal.
Lobbyists are advocating both for and against it.
APGI, a subsidiary of aluminum producer Alcoa, has applied for a 50-year renewal of its federal license to generate more than $40 million in gross annual revenues from the dams, which are about 50 miles east of Charlotte. The company has been working for more than five years to secure approval from the Federal Energy Regulatory Commission and has proposed several recreational and environmental enhancements as part of its application.
But a vocal band of political and business leaders in Stanly County has campaigned to seek state or federal intervention, saying Alcoa no longer operates in the public interest.
The company's opponents argue primarily that Alcoa should not be allowed to continue using a public natural resource to generate $8.4 million in profits per year by selling power wholesale on the national grid because it has shuttered its smelting plant in Badin.
Alcoa's corporate predecessor won its original license in 1958 by arguing a 50-year term would allow it to invest in a new dam at Tuckertown and help sustain the relatively small plant and its more than 900 jobs. That license was to expire April 30, but FERC granted a one-year extension.
Alcoa's opponents also say the company has not satisfactorily proven its remediation of toxic byproducts from 85 years of smelting in the area and hasn't adequately assessed or accounted for future water and power needs of a growing region.
Establishing a study commission would be a significant victory for the company's opponents in part because the provision would temporarily keep the state from issuing a required water quality certificate.
The state had already issued such a certificate to APGI in November, but a procedural technicality reopened the record, allowing the opponents to submit testing by a Clemson University expert who disputed earlier findings.
Alcoa then withdrew that application and submitted another in May. The state generally acts on such applications within a year.
The opponents say that step represents North Carolina's last chance to weigh in before the five-member FERC board, which regulates the Yadkin Project and about 1,600 others, will consider APGI's hydroelectric application.
The provision would establish a 16-member commission to explore the possibility of creating a "Yadkin Power Authority" to "produce, distribute and sell hydroelectric power for the benefit of the people of North Carolina."
Testing and other activity related to APGI's water-quality application could continue, but the state Department of Environment and Natural Resources would be forbidden from making a final ruling until the state commission issues recommendations or May 1 of 2009, whichever is sooner.
Gene Ellis, the project's licensing and property manager, said the state should not treat his company differently than other applicants by delaying its decision to invest in a study that could lead it to enter an industry for which he said private enterprise already meets the public's needs.
APGI has also repeatedly raised questions of whether establishing a public power authority would infringe upon its property rights.
The company's opponents say the 1920 federal law that governs the relicensing process allows for government takeover pending Congressional approval and would provide a displaced licensee with compensation for its investment, but FERC has never recommended the United States seize a project from an incumbent applicant.
A competing entity could also have applied for consideration, but the deadline to do so passed almost two years ago, and no federal entity has expressed an interest in takeover. Even if those possibilities weren't already eliminated, Ellis said the company's internal counsel might urge the state to tread carefully.
"There are still those who believe there are significant Constitutionality issues," Ellis said.
Since the Senate passed its version of the budget that included the study provision, the company has commissioned and released a poll that included several questions about property rights and touts the state attempting to enter the power industry as overwhelmingly politically unpopular.
The company and its pollster defend the study's methods and validity, but its message appears to have fallen on deaf ears among the region's legislative delegation.
Sen. Bob Purcell of Laurinburg, who represents Stanly County, described a study as "a good idea."
Rep. Ken Furr, a former Stanly County commissioner from the county seat of Albemarle, described it as prudent and harmless.
Sen. Fletcher Hartsell of Cabarrus County said legislators and other state leaders have not yet sufficiently examined the issue.
He expects any objections to arise from colleagues concerned about the procedure with which the provision was introduced rather than with its substance.
Bingham deemed further study "imperative." He called APGI's poll "bunk" and said the company seems to be "using the property rights to stir people up."
Such a tactic might prompt some colleagues not to support a study, Bingham said, but the issue is important enough to the state's future that he is willing to advocate for it even if that position carries electoral implications.
Furr said voters who express concern about a study may not fully understand that North Carolina's approval of APGI's water-quality application could effectively curtail the state's control over the Yadkin's waters for another half-century.
Bingham said he would be "very saddened" if the General Assembly adjourned for the summer without approving a study commission, either during the budget process or through other means in the closing days of the legislative session.
Furr said he's surprised the study provision has not gained more attention in the halls of power already.
"If we were really being listened to by the leadership here," Furr said, "it would be a done deal."
The complex situation can be difficult to explain, Bingham said, but he has noticed a significant increase in awareness on the part of his colleagues over the past six months.
Rand said the potential significance of the issue became obvious to him immediately after meeting with legislators and concerned residents from the region,
and he doesn't expect many objections from his constituents.
The company built considerable support for the balance of recreational, environmental and power-generating functions it proposed while applying to FERC, but Rand said the only people to contact him to oppose the study provision have been the company's lobbyists.
If the company will truly be the best steward of the water, he said, it needn't worry about a temporary delay.
"I suspect the voters don't know anything about it," Rand said. "The voters would be very concerned if it was something like this and we just dismissed it out of hand."
• Contact Josh McCann:
704-789-9152
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