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State drops Alcoa move
Study planned of water rights, power plants
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Published: July 17, 2008
RALEIGH
State legislators have backed away from a proposed state takeover of hydroelectric plants on the Yadkin River that are owned by Alcoa Inc.
But the state will continue to examine water rights on the river, a touchy subject as Alcoa works to renew its license to operate its four hydroelectric dams.
Some state and local officials see the river -- and its power-generating capacity -- as a precious public resource that should not be controlled by a private company that uses it to make a profit.
A draft of the 2008-09 state budget contained a provision that would have required a formal study of how North Carolina could take control of the hydroelectric plants and put them to public use.
Alcoa, a worldwide producer of aluminum, strongly opposed the provision, calling it an unfair proposal to seize the company's private property. The provision did not make it into the final version of the budget, which was signed into law yesterday by Gov. Mike Easley.
Instead, the state will do a more general study of water issues along the Yadkin River. The study will look at the potential impact of Alcoa's effort to renew its license for another 50 years.
"It doesn't have anything to do with taking of private property and taking of a license," said state Rep. Deborah Ross, D-Wake. "But it does allow the state its ability to protect its interest, and its interest in water."
Since the 1950s, Alcoa has had a license to operate hydroelectric plants on four reservoirs along a 38-mile section of the Yadkin River.
One of these is High Rock Lake in Davidson County.
The company originally used the power it generated for a smelting plant in Badin.
After the plant closed, the company began selling the electricity on the open market. The arrangement brings in about $44 million of revenue a year.
After taxes and expenses are factored in, the sale of the electricity brings a profit of about $8 million a year, the company said.
Some residents and local officials along the river have complained about Alcoa and opposed its bid for a new 50-year license. They complain about water quality and water levels, and they say that the river's resources are important for economic development in central North Carolina and should be used to benefit the region.
Alcoa supports the new study of water issues on the Yadkin River, mainly because it includes no mention of a state takeover of the company's hydroelectric project.
"We have been an advocate of being involved with the state in studying water issues for many years now," said Gene Ellis, the licensing and property manager for Alcoa Power Generating Inc.
The bill calling for the Yadkin study was approved yesterday by the N.C. House of Representatives and is now headed back to the N.C. Senate, which approved an earlier version of the bill. The study will be conducted by the state's Environmental Review Commission, which must report to the legislature by Feb. 1.
The report will also go to the state regulators who must decide whether to give Alcoa a water-quality certification.
That certification is necessary before the company can renew its license from the federal government.
■ James Romoser can be reached at 919-210-6794 or at
jromoser@wsjournal.com.
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