Why Perdue's proposed Yadkin River takeover is so flawed

The Charlotte Observer published an opinion piece today from Rick Bowen, president of Alcoa's energy operations, about Gov. Perdue's attempted government takeover of the Yadkin Project.

Why Perdue's proposed Yadkin River takeover is so flawed

From Rick Bowen, president of Alcoa Energy

When Gov. Bev Perdue decided to pursue an unprecedented government takeover of Alcoa Power Generating Inc.'s hydropower operations along the Yadkin River, she ignored the recommendations of experts in her own state agency, disregarded the actions of the N.C. General Assembly and refused to listen to the citizens who will be most impacted by a takeover.

Instead, she asked the Federal Energy Regulatory Commission to toss aside its own rules and regulations and recommend a government takeover of the Yadkin Project.

Nothing like that has ever been done before... at least not in America.

Gov. Perdue's quest to take our private property stands in stark contrast to the actions of the General Assembly, which rejected takeover legislation this year, and the N.C. Department of Environment and Natural Resources, which studied our operations and in 2007 signed the Relicensing Settlement Agreement supporting a new license for the Yadkin Project.

From the beginning, Gov. Perdue has turned a deaf ear toward the citizens most involved in this process, including homeowners, recreational users, business groups, environmental groups and others who spent years negotiating a relicensing settlement agreement with APGI that offers substantial benefits to North Carolina.

She has dismissed the recommendation of FERC staff that our license should be renewed.

And she ignored the concerns of interested citizens, including grassroots groups such as the N.C. Property Rights Coalition, who have expressed concern that this takeover will set a dangerous precedent that could impact private citizens and small business owners. You have to believe it will affect the way other business owners look at North Carolina, too.

I wish I could ask Gov. Perdue why she is so intent on taking our business. But she has refused to meet with me and others from Alcoa.

So I can't ask her why she conveniently omitted or distorted our history of environmental stewardship and community support. I can't explain that her actions reflect a clear misinterpretation of the Federal Power Act. And I can't point out the glaring errors in her filing.

For example, Gov. Perdue's projections estimate $2.8 million a year for operating and maintenance expenses - but fail to take into account any expenses associated with project land management, depreciation, other contracted costs, power substation and transmission, and general administrative expenses. Those expenses add an additional $11 million a year to the operating costs, meaning Gov. Perdue has underestimated operating expenses by almost 400 percent.

She also estimates it will cost $24.1 million to acquire the Yadkin Project. Even if a government takeover were possible, the price must reflect the updated cost of Alcoa's net investment ($91 million), plus severance damages that could add hundreds of millions of dollars to the cost.

Gov. Perdue argues that North Carolina must "secure a greater degree of control over the water supplies within its own borders." If so, then shouldn't the same rules apply to all rivers in North Carolina and all private hydro operators?

But this battle isn't about protecting the North Carolina's water supplies; it's about taking government control of a private business.