The public should be allowed to tap into the stream of revenue that Alcoa Power Generating Inc. gets from operating four hydroelectric reservoirs along the Yadkin River, a state legislator from Davidson County says.
"It's not Alcoa's water, it's the people's water," said Sen. Stan Bingham, a Republican.
Last week, Bingham filed two bills that would allow Davidson and Stanly counties to impose a tax on companies that use hydropower to produce electricity and that withdraw a significant amount of water to produce that power.
Bingham said he is particularly troubled by the fact that Alcoa sells electricity on the open market. The arrangement brings in about $44 million a year in revenue to Alcoa. Bingham said he doesn't know how much money would be raised from the tax. The bills are now in committees.
"You don't get your electricity free, and they're wholesaling this power," he said. "I'd feel more comfortable if they were selling cheap power to the state."
Alcoa, which makes aluminum, operates four plants at reservoirs along Davidson, Davie, Rowan, Montgomery and Stanly counties. The company has applied for a new 50-year federal license to operate the reservoirs.
Some residents and local officials along the river have complained about Alcoa and opposed its bid for the new license. At High Rock Lake, one of the reservoirs run by Alcoa, residents have been angered by fluctuating water levels they said have led to beached boats, dead fish and poor water quality. Officials in Stanly County have accused the company of not doing enough to deal with contamination caused by the smelting plant it operated in the town of Badin until 2002.
"They get all the benefits, and the state gets screwed, basically," Bingham said.
Alcoa officials are balking at the bills, saying that it is unfair to single out a company and that the legislation might have a negative effect on the business climate in the state.
"For a single business entity to be targeted like this sends a very, very bad picture to businesses that might be interested in locating here," said Gene Ellis, the license and property manager for Alcoa.
Robert Browne, a professor of biology and the director of the environmental program at Wake Forest University in Winston-Salem, said that there's a legitimate issue in the fact that Alcoa is selling electricity on the open market.
When Alcoa first started operating the reservoirs, it used the hydroelectric power to produce aluminum, Browne said. But the company now sells that electricity on the open market, and residents should see some benefit from a private company using a public resource such as the Yadkin River, he said.
Ellis said that the company has the right to use reasonable amounts of water to create clean, renewable energy, and those rights are tempered by federal and state regulations.
"It is a significant public resource," Ellis said about the Yadkin River, "and that's one of the reasons why the federal relicensing process is as comprehensive as it is and takes as much time. There are very complex and multiple issues that have to be addressed."
The company is getting resistance from the state as well. Gov. Bev Perdue has expressed concern about the company's control of the Yadkin River.
Last year, state officials proposed and then backed away from a plan to take over the four hydroelectric plants. Instead, the state is conducting a study on the effect that a new federal license would have on North Carolina.
Separately, the company is requesting a water-quality permit from the N.C. Division of Water Quality. The agency has asked for more information. Ellis said that the company is complying with the state's request.
The division has until May to issue or deny the permit, which is needed before the Federal Energy Regulatory Commission could issue the federal license.
■ Michael Hewlett can be reached at 727-7326 or at mhewlett@wsjournal.com.
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