NC House rejects government takeover of Alcoa property in decisive vote

A great victory at the North Carolina General Assembly last night. See press release below:

NC House rejects government takeover of Alcoa property in decisive vote

N.C. RALEIGH – The N.C. House voted in overwhelming numbers to reject an unprecedented and costly government takeover of Alcoa’s hydroelectric business along the Yadkin River in central North Carolina. Senate Bill 967, sponsored by Sen. Fletcher Hartsell, failed in a floor vote by a wide margin, 66-39, with bipartisan support.

“Legislators sent a clear message that they do not support the taking of private business. The more they learned about this issue, it became evident that passing this legislation would set a dangerous precedent for North Carolina,” said Gene Ellis, an Alcoa spokesman. “We appreciate the strong support of the N.C. House and remain committed to fighting any future efforts by Gov. Perdue to take our business against our will.”

The bill would have established a state trust with the authority to seize the Yadkin Hydroelectric Project, a privately-owned business that has been generating clean renewable energy in North Carolina since 1915.

Legislators tried to quickly maneuver the bill through the General Assembly this week after the House Water Resources Committee reversed itself and voted the bill out of committee. The bill was heard twice Thursday by the House Public Utilities Committee, which passed the bill at a hastily called afternoon meeting. The bill then bypassed the House Finance Committee and was sent straight to the House floor.

Opponents of a state takeover –including lakefront homeowners, property rights advocates and local officials in Stanly County – expressed serious concerns about the proposed takeover this week. Their concerns included the potential cost to North Carolina taxpayers of $500 million or more; the fundamental violation of Alcoa’s private property rights; and the need to support the federal licensing process and the Relicensing Settlement Agreement that Alcoa reached with stakeholders.

The Federal Energy Regulatory Commission (FERC), the federal agency that regulates hydroelectric projects in the United States, has all of the information it needs to issue a new long-term license for the Yadkin Project. FERC staff has already recommended issuing a new license to Alcoa.

“We remain eager for a new license and look forward to implementing the many positive benefits included in the Relicensing Settlement Agreement,” Ellis said.

Under the terms of the relicensing agreement, Alcoa will continue to improve water quality in the Yadkin River; allow for increased water withdrawals by local municipalities; better protect the water supply when drought conditions are present; set aside thousands of acres for long-term land protection; create new parks, public swim areas and other recreation opportunities; provide more stable lake levels and a consistent downstream flow of water; and give homeowners more flexibility regarding shoreline development.

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North Carolina approves water quality certificate for Yadkin Project, clears the way for FERC to issue Alcoa a long-term license

The N.C. Division of Water Quality today issued Alcoa Power Generating Inc. (APGI) a required water quality certificate for the Yadkin Hydroelectric Project. The action clears the way for the Federal Energy Regulatory Commission (FERC) to issue a new long-term license for the Yadkin Project.

“Obtaining this water quality certificate was the last major milestone in the relicensing effort that we began in 2002,” said Gene Ellis, APGI licensing and property manager. “We hope FERC will now move quickly to issue a new long-term license for the Yadkin Project so that we can begin implementing the important benefits in our relicensing settlement agreement.”

Once FERC issues a new long-term license for the Yadkin Project, APGI will begin implementing the relicensing agreement that it negotiated with state and federal agencies, local governments, homeowners and recreational users, business organizations, environmental interest groups and others. The agreement will improve water quality in the Yadkin River, create new recreational opportunities around the lakes, better protect the water supply during drought, provide for increased water withdrawals by local municipalities and set aside land for conservation purposes.

You can find the offiical 401 Certification online at http://h2o.enr.state.nc.us/admin/pubinfo/DWQPubInfoNewsReleases.htm

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.)