RALEIGH
Alcoa Inc. is fighting back against the state of North Carolina in a battle over control of Alcoa's hydroelectric dams on the Yadkin River.
Gov. Bev Perdue's administration has argued that federal regulators should not renew Alcoa's long-term license to operate the dams. In documents submitted last month, the administration said that if the company retains control over the dams, the state may have trouble managing its water resources and dealing with droughts.
The administration wants the state to take control of the four dams and reservoirs located along a 38-mile stretch of the Yadkin.
State officials say that the state could use the facilities to create new jobs.
Alcoa, the nation's largest producer of aluminum, on Monday filed a formal response to the Perdue administration's proposal, calling it "an amalgamation of factual misstatements and legal arguments that are inventive in the extreme."
It was filed with the Federal Energy Regulatory Commission and posted yesterday.
Alcoa argues that the state's proposal is an unfair and unprecedented encroachment on a private company.
The federal regulatory agency has never before decided not to renew a company's license to operate hydroelectric facilities.
Alcoa was given its initial 50-year license in 1958, and at that time, it used the dams to power an aluminum smelter in Stanly County that provided hundreds of jobs.
But the plant is now closed and most of the jobs are gone. The company sells the electricity it generates.
The state argues that because the company no longer provides many local jobs, its license should not be renewed.
If federal regulators side with Perdue and do not renew Alcoa's license, then the issue would go to Congress, which would have to pass a law allowing the state to take control of the dams.
The state would compensate Alcoa for the facilities.
Alcoa says that would cost the state hundreds of millions of dollars; the state says it would be considerably less.
Gene Ellis, a spokesman for Alcoa, said yesterday that Alcoa believes that federal regulators currently have all the information they need to renew Alcoa's license.
Kathy Neal, a spokeswoman for the N.C. Department of Commerce, declined to comment on the specific claims made in Alcoa's filing.
Neal said that the state's own filing last month speaks for itself.
"We feel like we've made a compelling case for the people of North Carolina," Neal said.
Earlier this year, some state legislators -- with the administration's support -- tried to pass a bill that would have set up a "Yadkin River Trust" that could have been used to take control of the dams. The bill was narrowly voted down late in the legislative session.
jromoser@wsjournal.com
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