Alcoa vows to fight efforts to seize privately-owned business

I wanted to share with you the following press release that was was issued this morning:

Alcoa vows to fight efforts to seize privately-owned business

Proposed bill in the N.C. General Assembly would forcibly seize hydropower business along the Yadkin River, costing taxpayers hundreds of millions of dollars

BADIN, NC (MARCH 26, 2009) – Alcoa Power Generating Inc. (APGI) said today that efforts by elected officials in North Carolina to forcibly seize its privately-owned hydropower business would cost North Carolina taxpayers hundreds of millions of dollars and harm the state’s “business friendly” reputation.

Sen. Fletcher L. Hartsell, Jr. introduced a bill (SB 967) Wednesday that sets up a State Trust that would allow the State of North Carolina to take the Yadkin Hydroelectric Project, a privately-owned business along the Yadkin River in central North Carolina that generates clean, renewable energy.  Taking the Yadkin Project would cost North Carolina taxpayers hundreds of millions of dollars, including $240 million in required expenses to improve water quality and maintain and upgrade the dams and powerhouses. 

“This has absolutely nothing to do with protecting North Carolina’s water.  It has everything to do with the government trying to take a privately-owned business for its own benefit,” said Gene Ellis, licensing and property manager for APGI.  “It’s a bad idea and sets a dangerous precedent for other North Carolina businesses.  We will fight it.”   

Beginning in 1915, Alcoa invested $80 million in private money to purchase more than 38,000 acres of land along the Yadkin River and develop four dams and powerhouses without any government aid or assistance.  The project led to the development of four reservoirs, including Badin Lake and High Rock Lake, that have been a strong economic asset to the region.  APGI has operated the Yadkin Project under a federal license since 1958; that license is now up for renewal.

“There are established state and federal processes for relicensing hydroelectric projects and Alcoa has played by the rules,” Ellis explained.  “Since 2002, we have pursued a new hydropower license through proper channels and with the active involvement of state agencies, local governments and the residents who live in nearby communities.  There are 22 privately-owned hydropower projects in North Carolina and this project should not be treated any differently – or held to a different standard – than other business in this state.”

A public opinion poll conducted by McLaughlin & Associates last year found that 71 percent of North Carolina voters oppose the idea of spending taxpayer money to take the Yadkin Project.  Only 10% favored spending millions to take over the business. By a 2-to-1 margin, voters believed that a government takeover is a violation of private property rights.

Sen. Hartsell previously said that he had no interest in taking the Yadkin Project under any circumstances.  While discussing a proposed study bill related to the Yadkin Project relicensing in a House Judiciary committee meeting on July 15, 2008, Sen. Hartsell said: “I want to say upfront and unequivocally that this bill is not, never was and is never intended to be a taking of any sort under any circumstances for anything. Period.”

The introduction of SB 967 represents a dramatic departure from Sen. Hartsell’s earlier comments. 

Albemarle Mayor Whit Whitley and others are concerned that efforts to take control of a private business is bad for North Carolina’s “business friendly” reputation and may make it more difficult to recruit companies who are thinking about doing business here.

“Why is this issue even on the table?” Mayor Whitley wrote in a March 2 letter to Gov. Perdue. “The only true consideration is greed, and I am appalled that the state of North Carolina is buying into this type of thinking.” 

“Greed for the ownership of Alcoa's land around the lakes and greed for the revenue that the dams produce are not in the long-term best interest of the county or the state and certainly not in the best interest of the free enterprise system.”

North Carolina already controls water rights in the Yadkin River

APGI does not control access to the water in the Yadkin River, and the relicensing of the Yadkin Project will not limit the State of North Carolina’s ability in any way to withdraw water from the Yadkin River.  State law gives North Carolina the authority to regulate water use within the Yadkin River, including the right to issue new water withdrawal permits.  This ensures that North Carolina will always have access to water from the Yadkin River.

Established North Carolina law provides riparian water rights that ensure property owners along a river have a legal right to access and use the water running across their property.  APGI owns more than 38,000 acres along the Yadkin River and uses the water that runs across its property to generate clean, renewable energy – without consuming the water as it flows downs the river. 

North Carolina state agencies were actively involved in the Yadkin Project relicensing

North Carolina’s interests have been well represented during the relicensing process and will be well protected when APGI receives a new license.  The N.C. Dept. of Environment & Natural Resources and the N.C. Wildlife Resources Commission have been actively involved in the relicensing process since 2002.  Both agencies helped negotiate a relicensing agreement that will improve water quality in the Yadkin River, allow for increased water withdrawals by local municipalities, better protect the water supply during drought, provide for long-term land protection and create new recreation opportunities for North Carolina residents. 

Widespread support for Alcoa Power Generating Inc.

There is widespread support for issuing a new federal hydropower license for the Yadkin Project.  The relicensing agreement has been signed by 23 organizations, including two municipalities in Stanly County.  The City of Albemarle is the largest municipality in Stanly County and one of the largest water users along the Yadkin River, and the Town of Badin is home to the Yadkin Project and represents the community most impacted by curtailment of the Badin Works plant.  Both municipalities strongly support the relicensing.  

Other supporters include state and federal agencies, environmental interest groups, and local homeowners, business groups and recreational users.

Additional Background Information

Learn more about the Yadkin Hydroelectric Project at www.alcoafacts.com and http://yadkinproject.blogspot.com.

Low taxes make North Carolina friendly for business … for now

The Triangle Business Journal reported yesterday that North Carolina ranks as the second best state to do business in, according to a survey of 543 CEO’s conducted by Chief Executive magazine.  Key factors highlighted by business leaders included North Carolina’s low taxes and business friendliness.

But efforts by the State of North Carolina to take over the privately-owned Yadkin Hydroelectric Project could negatively impact the way business leaders view North Carolina in the future.  A tax bill proposed by Sen. Stan Bingham that would allow certain N.C. counties to tax companies that produce clean, renewable energy could also have a negative impact on North Carolina’s efforts to establish itself as a national leader in green energy.

Albemarle Mayor Whit Whitley is among those who have expressed concerns to Gov. Bev Perdue that attacks on Alcoa could make it more difficult to attract new businesses to Stanly County.

JP Donlon, editor-in-chief of Chief Executive magazine, said: “As the nation’s economic problems continue to snowball and an increasing number of states experience budgetary problems, state governments ought to take a hard look at their taxation and unionization policies if they want to turn the page and attract new businesses and capital to their provinces.”

If Sen. Bingham’s bill passes the N.C. General Assembly, other N.C. counties will likely seek similar opportunities to raise much-needed tax revenue by levying additional taxes on private companies.

Proposed hydro tax at odds with NC's desire to be a national leader in green energy

North Carolina wants to be a national green energy leader, but a proposed new tax on companies that produce hydropower could hamper efforts to attract companies in the renewable energy industry.     

Sen. Stan Bingham (Davidson County) last week introduced Senate Bill 569, a measure that would allow certain counties to levy a privilege tax on businesses that produce hydropower. Hydropower accounts for 20 percent of the world’s energy and is widely regarded as the cleanest form of renewable energy.

The effort to levy additional taxes on hydropower operators is in stark contrast to North Carolina’s efforts to encourage renewable energy and attract “green collar” jobs in the renewable energy industry.  North Carolina passed a landmark renewable energy bill in 2007 (SB3: Promote Renewable Energy/Baseload Generation) that requires utilities to significantly increase their use of renewable energy by 2012.  In addition, the state has established a “Green Business Fund” that provides tax financial incentives to companies developing renewable energy technologies. 

“It’s disappointing that North Carolina would consider forcing companies that generate hydropower to pay additional taxes, especially at a time when generating clean, renewable energy is a high priority with voters.  This could negatively impact the perception of North Carolina among renewable energy companies that are considering business opportunities in North Carolina,” said Gene Ellis, licensing and property manager for Alcoa Power Generating Inc. (APGI), which that operates the Hydroelectric Project along the Yadkin River in central North Carolina.

This proposed tax has the ability to become widespread and negatively impact other companies that produce renewable energy in North Carolina. 

“If this bill passes, we believe other counties will be lining up at the General Assembly, seeking permission to create all sorts of new taxes,” Ellis said. “In this economic environment, it just doesn’t make sense.  Our state leaders should focus on measures that will make North Carolina more friendly to private business.”

The specific goal of SB 569 appears to be another attempt by Stanly County to push for the takeover of the Yadkin Project, one of 22 privately-owned hydropower projects in North Carolina. The county has stated that the privilege tax is a “Plan B” in the event that it fails to win support for a “State Trust” concept that calls for the state to condemn the Yadkin Project.  The State Trust concept would cost North Carolina taxpayers hundreds of millions of dollars, plus $240 million needed to upgrade the dams.

Stanly County claims if the state managed the project, it could provide new jobs and clean up waste sites associated with Alcoa’s Badin Works.   However, Alcoa is actively working to redevelop the Badin Works site and has already spent $10 million to remediate old waste sites associated with its historic operations.  Alcoa has acknowledged that it has a permanent, legal responsibility to manage waste sites in a responsible manner that will protect public health. Taxpayers will never be asked to pay for the cost of remediation.

APGI has operated the Yadkin Project since 1915.  The company is currently seeking to renew its license with the Federal Energy Regulatory Commission (FERC) and a small group of vocal critics in Stanly County is opposing the license renewal.  Stanly County has already spent nearly $1 million in taxpayer money to oppose a new license for APGI. 

In a March 2 letter to Gov. Beverly Perdue, Albemarle Mayor Whit Whitley expressed concerns that the county’s opposition to APGI would discourage other businesses from locating here.  “What industry or manufacturing plant would be interested in coming to NC or Stanly County if they use natural resources?” Whitley asked. “What would the opinion of reasonable thinking people be when they realize NC and Stanly County no longer have any regard for the free enterprise system?”  (You can read Mayor Whitley's entire letter here.)

National Freedom of Information Day and the Public Records Lawsuit Against Stanly County

Today is National Freedom of Information Day, an annual event designed to highlight the importance of open government and educate the public about the dangers of excessive and unnecessary government secrecy.

As you know, government records at every level are public documents and the Freedom of Information Act allows citizens to request and receive public records in a timely manner.  The system usually works pretty well, butapparently not in Stanly County.

Nearly a year ago, Alcoa Power Generating Inc. filed a public records request in Stanly County, seeking information about the county’s opposition to a new license for the Yadkin Hydroelectric Project.  You may have heard that Stanly County has spent nearly $1 million in taxpayer money on Raleigh lobbyists, lawyers and PR firms to oppose a new license.  We wanted to learn more about the motivation behind Stanly County’s opposition and its excessive spending of taxpayer money.

Despite the clear nature of the public records law, Stanly County ignored our initial request for public documents.  A follow-up request yielded a handful of documents, but after more than 11 months it became clear that Stanly County had no intention of turning over public records as required by law.  That’s why we filed a lawsuit against the county last Friday.  You can read about the lawsuit in The Charlotte Observer or The Salisbury Post.   

We look forward to finally learning more about why county officials have spent nearly $1 million in taxpayer money to attack the county’s long-standing business and single largest taxpayer.  We will let you know what we learn when and if Stanly County complies with the law.

Click here to learn more about Sunshine Week, a national initiative sponsored by the American Society of Newspaper Editors to promote the importance of open government and freedom of information.

More on the Yadkin Shoreline Management Plan

Thanks for the question on the changes to the Yadkin Shoreline Management Plan that will occur once APGI receives its new license. The proposed changes are outlined in the Appendix D of the Relicensing Settlement Agreement.

If approved by the Federal Regulatory Energy Commission (FERC), the changes would allow eligible property owners to build larger private piers with an overall maximum square footage of 1,100 square feet. Within that footprint, the modifications allow greater flexibility in the design of the facilities to meet individuals' needs. The changes would still require that piers be constructed of pressure-treated lumber and pilings, although proposals to use materials other than pressure treated lumber will be reviewed on a case-by-case basis.

Other proposed changes that would benefit pier owners allow:

Individual or shared piers on lots with a minimum shoreline width of 50-ft within subdivisions developed prior to May 1, 1987;

Piers to be constructed in a minimum of six feet of water depth;

The length of piers to be 75 feet in total length regardless of the water depth unless there is a safety, navigation, and/or ingress/egress concern;

Boat lifts with supports resting on the reservoir bottom and boat lift covers;

On-pier structures, such as gazebos/shelters on the stationary section of the pier;

A sitting area within the 100-foot forested setback; and

Vegetation management in the 100-foot forested setback to create a view corridor.

Once APGI receives a new license, these new benefits could be implemented within three months.

If Stanly County gets what it wants....

In an article published by The Charlotte Observer, Stanly County Manager Andy Lucas says if Stanly County gets what it wants, its expenses will be repaid “many times over.” Lucas is referring to the nearly $1 million in taxpayer money that Stanly County has already spent on lawyers and PR firms to fight the relicensing of the Yadkin Project.

The truth is, if the county gets what it wants, North Carolina taxpayers will have to spend a whole lot more to seize Alcoa's property by condemnation. That would likely cost hundreds of millions of dollars, including $240 million in upgrades to power generation units and technology to improve water quality.

If the county gets what it wants, residents along Badin Lake and High Rock Lake will have to wait even longer to realize the many positive changes a new license will bring, including a new public swim area in Rowan County, new fishing piers and camp sites, land for a waterfront park along Badin Lake, and more flexibility for those building new piers on the lake.

If the county get what it wants, it claims water supplies will be better protected. But if the city of Albemarle, the county seat of Stanly County and the single largest municipal withdrawer, trusts Alcoa enough to support a new license, doesn't that speak volumes?

If the county gets what it wants, Stanly County will quickly earn a reputation as one of the least "business friendly" communities in North Carolina and beyond.

Do we really want Stanly County to get what it wants?

Mayor says greed spurs Alcoa fight

The Charlotte Observer published an article today that highlights arguments made by Mayor Whit Whitley of Albemarle in a letter to N.C. Gov. Beverly Perdue regarding the Yadkin Project relicensing. Reporter Bruce Henderson reports that Mayor Whitley is disturbed that Stanly County Commissioners have spent nearly $1 million of taxpayer money on lawyers and PR firms to fight Alcoa, claiming they are “motivated by greed.”

You can view the entire article below:

The Charlotte Observer, March 4, 2009

Mayor says greed spurs Alcoa fight

By Bruce Henderson

The nearly $1 million Stanly County has spent to fight renewal of Alcoa's Yadkin River hydroelectric license is "motivated by greed," says the mayor of the county seat, Albemarle.

The county is aggressively lobbying to reclaim the federal license, which Alcoa has held for more than 50 years, and place it in public hands. Alcoa's aluminum works, once Stanly's largest employer, has closed and its hydro power is sold on the open market.

This week Albemarle Mayor Elbert Whitley Jr. wrote Gov. Bev Perdue, who has expressed personal misgivings about renewing Alcoa's license, to defend the company.

Whitley questioned the county's spending $965,000 over three years on lawyers and public relations experts to make its case.

“Why is this issue even on the table?” Whitley wrote. “The only true consideration is greed, and I am appalled that the state of North Carolina is buying into this type of thinking.”

Whitley, a Democrat, charged in an interview that the Republican-majority county commissioners want Alcoa's millions of dollars in hydro revenue and thousands of acres it owns around the four Yadkin reservoirs.

If the commissioners win, he predicted, new industries that use natural resources will be afraid to locate in Stanly.

County manager Andy Lucas suspects Whitley also has a financial motive.

Alcoa's proposed license terms allow Albemarle to draw up to 11 million gallons of water a day from the company's reservoirs without charge.

“They've been given a financial incentive to go along with Alcoa on this,” he said.

“We believe we need to protect the water and that's why we've spent nearly $1 million on this. We think it's an investment in our future to protect that resource and keep jobs in this region.”

Stanly is paying law firms in Raleigh and Washington, D.C., as well as a Raleigh public relations firm to make its case. Lucas said he doesn't know what future costs may total. The county has a $60 million annual budget.

If the county gets what it wants, Lucas said, its expenses will be repaid “many times over.”

Q&A: Can you still swim and fish in Badin Lake?

Since the N.C. Division of Public Health issued a fish advisory for Badin Lake earlier this month, we have received several questions that we would like to answer here.

Q:  Can you still swim and fish in Badin Lake?

Absolutely.  The recreational opportunities in Badin Lake -- swimming, fishing and boating – remain available to everyone. The fish advisory simply recommends that people limit the frequency and amount of catfish and largemouth bass they consume from Badin Lake.  In fact, the advisory does not place any additional restrictions on fish consumption from the lake — the State had previously issued a statewide fish advisory recommending people limit their consumption of catfish, largemouth bass and other fish high in mercury to no more than one fish meal per week (and no consumption for those who are pregnant or under 15 years old). The new advisory relating to PCBs has the same recommendations regarding fish consumption.

Q:  Alcoa has said contamination likely came from upstream sources since three of the four fish with elevated levels of PCBs were caught in the northwest arm of the lake. But don't fish migrate? Couldn't they have come from anywhere in the lake?

Catfish and largemouth bass are not migratory species.  In fact, during spawning season, these fish are highly “territorial" and stay in certain areas or regions of a lake.  There are exceptions, of course, which is why studies like this typically make recommendations based on average levels.  When you use the average approach to analyze the findings, there were notable differences between fish found in the northwest, southwest and northeast regions of the lake. 

Northeast Section: This is the section of the lake that is least impacted by the main flow of the Yadkin River, and all the fish found here had PCB levels that were below the state standard of 50 micrograms/ kilograms (ug/Kg) or parts per billion.

Northwest Section: This section of the lake is on the main stem of the river, located miles upstream of the Badin Works plant.  This is where three of the four fish with elevated levels of PCBs were found.  The average level of PCBs  in catfish was 56 ug/Kg,  above the state standard of 50 ug/Kg. The average level of PCBs in largemouth bass was below the state standard.

Southwest Section: This is the section of the lake that is closest to the Badin Works plant.  One fish found here had slightly elevated levels of PCBs — a catfish that measured 53 ug/Kg.  Still, the average contamination levels of catfish, largemouth bass and sunfish found here were all significantly below the state standard. 

Q:  How tainted are the fish in Badin Lake?

Twenty six of the 30 fish sampled by the N.C. Division of Public Health were below the state standard.  Of the four fish with elevated levels of PCBs, three of those fish were at or only slightly above the standard.

The state standard is 50 micrograms/ kilograms or parts per billion.  Here is a breakdown of the four fish with elevated levels and where they were found:

1. Catfish: 50 ug/Kg, Northwest

2. Catfish: 53 ug/Kg, Southwest

3. Largemouth Bass: 53 ug/Kg, Northwest

4. Catfish: 117 ug/Kg, Northwest 

The Department of Health stated that it took a very conservative approach when issuing this fish advisory.  Rather than evaluate the results based on average levels of contamination as it typically does, in the case of the largemouth bass, the Department opted to issue a lake-wide fish advisory based on a single fish with slightly elevated levels even though the average levels in every region were below the state standard.