The Battle Intensifies: House committee passes takeover bill; Sen. Hartsell maneuvers for quick floor vote

You never know what’s going to happen when you’re at the legislature. And Wednesday was one of the most surreal days I’ve ever experienced.

One week after a N.C. House Committee voted against a government takeover of the Alcoa’s Yadkin Hydroelectric Project, that same committee resurrected the bill and voted 8-7 to support an unprecedented government takeover that could cost North Carolina taxpayers more than $500 million.

The House Water Resources & Infrastructure Committee narrowly approved Senate Bill 967 despite the anticipated cost and strong opposition from lakefront homeowners, property rights advocates and local officials in Stanly County.

Within hours, Sen. Fletcher Hartsell began maneuvering the bill for a quick passage in both chambers. He amended an existing bill (House Bill 1099) to include the essence of SB 967 that creates the Yadkin Trust. The bill passed the Senate and was sent by special delivery to the House for a floor vote that could occur as early as tomorrow, effectively bypassing the House Public Utilities and House Finance committees.

At the same time, SB 967 was referred to the House Public Utilities Commission for a hearing on Thursday at 10am. This essentially gives the bill's supporters two different cracks at passing the Yadkin Trust bill. If SB 967 is defeated in committee, the full House can still pass HB 1099.

“Sen. Hartsell pulled out all the stops today. It looks like he’s willing to do whatever it takes to take away the business we started here in 1915,” said Gene Ellis, a spokesman for Alcoa. “Frankly, we’re stunned that this important legislation is being rammed through the legislature. This is a complex issue with far-reaching implications and it deserves a fair hearing.”

Alcoa will continue fighting to keep the Yadkin Project, which has generated clean, renewable energy in North Carolina for nearly 100 years. It is important to remember that regardless of what happens in the North Carolina legislature, only the federal government can consider a takeover of the Yadkin Project, Ellis said.

The Federal Energy Regulatory Commission (FERC) has all of the information it needs to issue a new long-term license for the Yadkin Project. FERC staff has already dismissed the possibility of a government takeover and recommended issuing a new license to Alcoa.

N.C. Property Rights Coalition joins the fight to stop government takeover of Alcoa’s private hydro business

A prominent property rights organization is joining the fight against a proposed government takeover of the Yadkin Project, a privately-owned hydro business along the Yadkin River.

The N.C. Property Rights Coalition, led by Raleigh lawyer Kieran Shanahan, is taking an increasingly active role in the legislative battle over a proposed government takeover of the Yadkin Project. The organization will be working to educate the people across North Carolina about the state’s unprecedented assault on private property rights. Alcoa is a financial supporter of the coalition.

If successful, the takeover of Alcoa’s privately-owned business could cost North Carolina more than $500 million and set a dangerous precedent that could make it more difficult to attract new business and jobs to our state. Business owners and individuals are asking the same question: “If this can happen to Alcoa, who’s next?”

The N.C. Property Rights Coalition took a stand on this preeminent property rights issue early on, and we welcome their support in our fight to protect our private property. We have been doing business in North Carolina since 1915 and look forward to continuing generating clean, renewable energy along the Yadkin River.

Visit http://ncpropertyrights.com/ to learn more.

NC’s last-minute effort to take Alcoa’s hydro project creates challenge for renewable energy industry

The State of North Carolina’s last-minute effort to takeover Alcoa’s hydro project on the Yadkin River could discourage private investment in hydropower, the nation’s largest source of renewable energy, and make it more difficult to meet President Obama’s renewable energy goals.

That’s the message from Rick Miller, president of the National Hydropower Association, in a Charlotte Business Journal article published on May 22, 2009.  “Allowing stakeholders to short-circuit the process to address other agendas at the last moment, after they had the opportunity to voice their opinions during the public process, jeopardizes the integrity of regulatory review. It also discourages private investment,” Miller writes.

You can read the entire article below:

Charlotte Business Journal | May 22, 2009

No need to open the floodgates
Last-minute attempts to influence license-renewal process at Alcoa’s facilities could undermine attractiveness of a clean source of energy

By Rick Miller

Efforts by state and local officials to take control of Alcoa Inc.’s hydroelectric facilities along the Yadkin River are a challenge to those who support the competitive development of clean, affordable and domestic energy resources.

Hydropower is the United States’ largest renewable resource. It generates 6% to 8% of the nation’s electricity. Three-quarters of all electricity produced by renewables comes from hydropower. According to the Federal Energy Regulatory Commission, hydropower can double its capacity during the next 20 years.

While some of this new capacity will come from efficiency improvements to existing facilities, much can come without the need for new dams. Only 3% of America’s dams have hydroelectric facilities, so converting them to electricity-generating resources will be a high priority.

Developers and entrepreneurs are also looking at new technologies that can generate electricity in oceans and tides. Earlier this year, Hydro Green Energy installed the first commercial hydrokinetic facility on the Mississippi River, near Hastings, Minn. This small, entrepreneurial company is creating jobs, attracting investment and generating electricity.

In fact, many cutting-edge hydropower technologies — all of which increase energy output without a significant additional environmental footprint — come from private-sector companies that demand stability and certainty in their business dealings to attract investment and innovate. They need to know that when they invest in a facility or technology — and meet the strict regulatory guidelines imposed on all hydropower projects — governments, regulators and other stakeholders aren’t going to change the rules to suit other agendas.

Hydropower is one of the most highly regulated energy sectors in the United States. Hydropower operators typically begin their consultations on licensing and environmental issues years before licensing deadlines so they can be sure every stakeholder group can make its voice heard during the licensing process.

Many, including Alcoa, negotiate settlement agreements so relicensing conditions reflect the many stakeholder priorities and needs.

These consultations and reviews can stretch over years. For the Yadkin River projects, Alcoa began its relicensing efforts in 2002, having started its stakeholder outreach several years before that.

The U.S. hydropower industry supports this lengthy, collaborative process because it addresses stakeholder concerns and provides certainty. If a company plays by the rules, and goes through the licensing process in a transparent, community-minded way, it will secure the right to operate.

Allowing stakeholders to short-circuit the process to address other agendas at the last moment, after they had the opportunity to voice their opinions during the public process, jeopardizes the integrity of regulatory review. It also discourages private investment.

President Obama has challenged the renewable sector to double its output. The U.S. hydropower industry is prepared to meet this challenge. We urge stakeholders to work with us to make their voices heard through the mechanisms offered in the relicensing process rather than supporting alternative scenarios that undermine a collaborative approach.

By working together, we can continue and expand the benefits hydropower offers communities throughout the country.

Rick Miller is president of the National Hydropower Association and senior vice president of hydropower services at HDR|DTA in Charlotte.

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.)