Judge overturns denial of Alcoa’s water quality certificate

A judge has ruled that the NC Division of Water Resources (DWR) exceeded its authority, acted erroneously and failed to act as required by law when it denied Alcoa Power Generating Inc. (APGI) a water quality certificate that is required to relicense its hydroelectric project along the Yadkin River. As a result, the denial has resulted in “additional and unnecessary delay” of water quality protections and improvements.   

Administrative Law Judge Selina Brooks granted APGI’s motion to overturn the denial of its application for a 401 water quality certificate for the Yadkin Hydroelectric Project in a May 29 order. The court ordered the state to review APGI’s application "as expeditiously as possible” and issue a decision within 30 days. Click here to read the ruling.  

“The judge concluded what we have known all along – the Division of Water Resources had no legitimate grounds to deny our water quality certificate. We urge the agency to follow its rules and act quickly to issue a water quality certificate for the Yadkin Project,” said Ray Barham, APGI Yadkin Relicensing Manager.

In the order, Judge Brooks stated that “there appears to be no factual dispute that [APGI] satisfied the substantive requirements for issuance of a water quality certification.” She ruled that the decision to deny APGI’s application was an arbitrary and capricious decision that resulted in “manifest unfairness” to APGI.

When APGI’s application for a water quality certificate was denied on August 2, 2013, it was not the result of “careful consideration” or “impartial decision-making.” In the order, Judge Brooks stated that DWR exceeded its authority by admittedly basing the denial on a dispute over ownership of the riverbed beneath the hydroelectric project rather than water quality issues.

The issuance of a water quality certificate is a precondition to Federal Energy Regulatory Commission (FERC) issuing APGI’s new long-term license to continue generating clean, renewable energy at the Yadkin Project. FERC staff has previously recommended issuing a new license to APGI.

“This was never an issue about water quality. We have a proven plan in place to improve water quality and ensure compliance with the state’s water quality standards,” Barham said. “We are prepared to invest up to $80 million in the Yadkin Project to continue enhancing water quality in the Yadkin River.”

APGI and the State of North Carolina are currently involved in a lawsuit in U.S. District Court over the ownership of the riverbed. A federal judge resolved a key issue in the lawsuit in May when he ruled that the relevant section of the Yadkin River not navigable – a determination that prevents the State of North Carolina from asserting special ownership rights to the riverbed.

The Positive Impact of Alcoa’s Water Quality Investments: Water Leaving Yadkin Project Hits Mark 100% of the Time

Water leaving the Yadkin Project meets state standards for water quality 100% of the time, according to a report on dissolved oxygen that was submitted to the NC Division of Water Resources in March.

Dissolved oxygen levels are a key indicator of water quality and are often used by state agencies as a benchmark. Alcoa Power Generating (APGI) has been closely monitoring dissolved oxygen levels at the Yadkin Project since 2007 and provides an annual report to the state. The Yadkin Project is not currently subjected to state standards for dissolved oxygen, but it will be once a new federal license is issued.

The report shows that turbine upgrades and other enhancements made several years ago have continued to improve water quality at the Yadkin Project.

“The investments we’ve made at Narrows Dam continue to enhance water quality,” said Ray Barham, APGI’s Yadkin Relicensing Manager. “We’ve spent more than $5 million in new technology at the Narrows Dam and it has been very effective at improving downstream water quality.”

Quality Improves As Water Flows Through the Yadkin Project
Water enters the Yadkin Project at High Rock Lake with relatively low concentrations of dissolved oxygen. After traveling 38 miles down the Yadkin River and passing through four dams operated by APGI, the water quality improves significantly before it is discharged at the Falls Dam.

In 2013, water discharged from High Rock Dam met the state standard for dissolved oxygen 78% of the time (based on daily average measurements). It met those same standards 100% when discharged from Narrows Dam and Falls Dam.

$80 Million in Additional Investments Planned by Alcoa
APGI has committed to investing up to $80 million to continue improving water quality at the Yadkin Project, beginning with a $40 million investment at High Rock Lake. APGI will install three “through-the-blade” aerating turbines at High Rock once the Federal Energy Regulatory Commission (FERC) issues a new license for the Yadkin Project. The engineering, planning, and model testing of the new turbines has already been completed.

“We will begin work at High Rock Dam as soon as we receive a new license,” Barham said.

# # #

Summary of 2013 Dissolved Oxygen Report Findings
The state measures dissolved oxygen concentrations in two different ways: through instantaneous measurements recorded every 15 minutes, and with a daily average of all measurements in a given day. Here is how the four Yadkin dams performed in 2013 versus a state standard that will take effect when a new federal license is issued:

High Rock Dam (Water enters the Yadkin Project at High Rock)
77.8% compliance with new standard - Daily Average Measurement (Up 39% over 2012)
93.4% compliance with new standard - Instantaneous Measurement (Up 34.2% over 2012)

Tuckertown Dam   
70.1% compliance with new standard - Daily Average Measurement (Up 36.9% over 2012)
87.4% compliance with new standard - Instantaneous Measurement (Up 36.6% over 2012)

Narrows Dam (New technology installed in 2001 and 2007)
100% compliance with new standard - Daily Average Measurement (Up 0.5% over 2012)
99.9% compliance with new standard - Instantaneous Measurement (Same as 2012)

Falls Dam (Water exits the Yadkin Project at Falls) 
100% compliance with new standard - Daily Average Measurement (Up 13.7% over 2012)
100% compliance with new standard - Instantaneous Measurement (Up 3.4% over 2012)

Additional Notes
1. The state standards for dissolved oxygen do not currently apply to the Yadkin Project, but the rule will be applicable under a new federal license.
2. Differences in hydrologic, meteorological and/or other natural conditions or tailwater aquatic vegetation can effect dissolved oxygen levels from one year to the next.

Public Hearing Scheduled for Tuesday, May 14

The NC Department of Environment and Natural Resources issued the following notice today about a public hearing on our water quality certification request. 

Public hearing scheduled for May 14 on Alcoa water quality certification request

RALEIGH – The N.C. Division of Water Quality will hold a public hearing at 7 p.m. May 14 to gather public comments concerning Alcoa Power Generating Inc.’s application for a state water quality certification as required by the federal Clean Water Act and the Federal Energy Regulatory Commission relicensing process.

The Federal Energy Regulatory Commission, or FERC, hydropower licensing process works to ensure that projects will minimize damage to the environment through the certification requirements of state water quality agencies.

If the FERC license were approved, it would allow Alcoa to continue operation of the hydroelectric dams at High Rock, Tuckertown, Narrows and Falls reservoirs on the Yadkin River. This run of the river crosses Davie, Davidson, Rowan, Montgomery and Stanly counties.

The hearing will begin at 7 p.m. in the Stanly County Commissioners Meeting Room, 1000 North First St., Albemarle. Speaker registration and sign-in will begin at 6 p.m.

The purpose of the hearing is to allow the public to comment on the company’s application submitted in September 2012 and additional information submitted thereafter. The application and supporting documents can be found online at: http://its.enr.state.nc.us/Weblink8/Browse.aspx?startid=169386.

The application may also be inspected at the DWQ central offices in the Archdale Building, 512 North Salisbury St., Raleigh, N.C. 27604. To schedule an appointment to review the file, please contact Karen Higgins atkaren.higgins@ncdenr.gov or 919-807-6360.

The public is invited to comment on the application by speaking at the hearing, by submitting written comments at the hearing or by mailing them to the division. Please send comments to Karen Higgins at the above email address or to: Karen Higgins, DWQ, 1650 Mail Service Center, Raleigh, N.C. 27699-1650. The comment period ends at 5 p.m. June 13.

Alcoa Investments Improving Water Quality at Yadkin Project

Water quality at the Yadkin Project has improved dramatically since we invested more than $5 million in turbine upgrades and other enhancements specifically designed to increase the amount of oxygen in the water.

That's the finding of a report on water quality that APGI released this week. It shows that water discharged from the Narrows Dam contains the highest concentration of dissolved oxygen — a key indicator of water quality — since we began monitoring water quality in 2007. This demonstrates that the Yadkin Project’s water quality is consistently improving, as measured by state standards for dissolved oxygen that will take effect when we receive a new federal license.

Why is this important? It's further evidence that the Yadkin Project deserves the state water quality certificate it was issued in 2009. A water quality certificate is a requirement for receiving a new FERC license.

We have installed new technology at three turbines at Narrows Dam, and water discharged from Narrows would have met the new state standard 100 percent of the time in 2011 — a 115 percent improvement since the majority of the work at Narrows was completed in 2007. We were confident that this technology would significantly improve dissolved oxygen conditions and it has.

In addition, APGI has committed to invest up to $80 million more to continue improving water quality at the Yadkin Project, beginning with a $40 million investment at High Rock Lake. Once we complete those upgrades, the Yadkin Project will fully comply with state water quality standards.

Click here to read the press release.
Click here to view the complete report.

Alcoa Power Generating Appeals Water Permit Revocation

Record Shows Full Disclosure; State Decision Based on Incomplete Facts 

Alcoa Power Generating Inc. (APGI) has appealed the North Carolina Division of Water Quality’s (DWQ) revocation of its water quality certification, stating that the agency was well informed about the functionality of the equipment in question and that the company did not withhold material information.

“In its revocation notice, the DWQ quotes selected portions of emails that do not provide the complete story and were taken out of context. If you read the entire email chains in context, and review the entire record, you find that no material information was withheld,” according to Rick Bowen, President, Alcoa Energy.  

A complete review of the emails cited by the DWQ shows that some of individuals who were working on the relicensing and authored these messages were confused at the time of the email exchange, and the points of confusion were cleared up in subsequent emails. For example, during one of the exchanges, a consultant concludes by saying, “This is news to me. Sorry for the confusion.” In another, a consultant states, “As I was looking over the materials again, I must confess I got confused.”

“We have the documentation to show that we were not withholding material information, and that we have publicly shared the operating conditions covered in these messages,” said Bowen.

The record shows that the DWQ was aware that operating conditions and generating levels could affect dissolved oxygen enhancement, participated in multiple discussions over a period of years on the same subject, and was in possession of detailed reports on the effects various operating scenarios had on dissolved oxygen levels,” Bowen said. 

The DWQ revoked APGI’s water quality certification on December 1, alleging that the company withheld information regarding the project’s ability to meet the state’s water quality standard for dissolved oxygen.  Alcoa Power Generating filed an appeal of that decision today. APGI is a subsidiary of Alcoa.

According to documents compiled by APGI, company officials and others discussed the system with the state during at least three Issue Advisory Group meetings attended by DWQ representatives on October 7, 2003, May 4, 2004 and April 6, 2005. The information was also included in APGI’s 2006 Federal Energy Regulatory Commission (FERC) license application, the Final Environmental Impact Statement for the Yadkin Project issued by FERC in 2008, and in multiple Yadkin Project Water Quality reports. 

Some examples include:

• Representatives of the DWQ participated in a Water Quality Issue Advisory Group meeting on May 4, 2004, where there was discussion of the anticipated structure of the dissolved oxygen enhancement and compliance provisions to be included in the 401 water quality certification. At this meeting, the typical operating scenarios at the Narrows development were discussed, as well as the process of how dissolved oxygen increases as the units are operated.
• The Final Environmental Impact Statement for the Yadkin Project issued by FERC in April 2008 reviews how operating conditions and generating levels affect dissolved oxygen enhancement. In it, FERC’s hydropower experts reviewed the results of the enhancement test and drew significant conclusions, such as “tests indicate that this aeration system [at Unit 4] increases DO concentrations by differing magnitudes, depending on the generation flows of each of the Narrows units and whether the two valves are open.”
• The 2005 Yadkin Water Quality Final Study prepared by Normandeau Associates discussed the effect of the operational conditions. The DWQ received and commented on the draft water quality report.

“We hope that our appeal will mean quick reinstatement of the water quality certification process so we can continue to work toward a new license, as well as a future with better water quality and more areas for Stanly County residents to enjoy with their families,” said Bowen.

Once APGI’s license is renewed, there will be many benefits to North Carolina, including improvements to water quality; increased water withdrawals; higher water levels during an extended recreation season; the creation of new parks, swim areas and other recreational opportunities; funding for recreational support; more flexibility for property owners; donations for habitat protection and water safety; and work with community partners for historical and cultural protection. In addition, APGI will sell or donate more than 6,000 acres for conservation, recreation or game lands. 

APGI is also implementing a plan to improve water quality that to date has resulted in significant improvements in dissolved oxygen levels. In a recent report filed with the DWQ, APGI documented that water leaving the Yadkin Project met state standards for dissolved oxygen 99.9 percent of the time.

APGI challenges some elements of Yadkin Project water quality certificate

In May 2009, the N.C. Department of Environment and Natural Resources issued a water quality certificate for the Yadkin Hydroelectric Project. Alcoa Power Generating Inc. (APGI) agrees with the determination by the Division of Water Quality (DWQ) that discharges from the Yadkin Project will meet North Carolina water quality standards and is committed to taking necessary steps to maintain and improve water quality in the Yadkin River.

The water quality certificate has been challenged by Stanly County and the Yadkin Riverkeeper in the Office of Administrative Hearings. While APGI believes that DWQ correctly determined that the Yadkin Project will meet water quality standards, certain conditions are excessive and beyond the state’s authority. In addition, certain timing requirements were not satisfied by the agency.

In light of the pre-existing challenges to the water quality certificate, APGI elected to file its own appeal of certain, specific items in the 401 water quality certificate on Monday.

APGI’s main point of contention is the $240 million surety bond required as a condition of the water quality certificate. While APGI has frequently said that it plans to spend a total of $240 million to upgrade the Yadkin Project dams and powerhouses, only a portion of that money is directly related to improving water quality by increasing dissolved oxygen levels as required in the 401 certification. The $240 million figure cited by APGI included other upgrades and maintenance that are unrelated to improving water quality.

APGI does not believe that a surety bond is required. The company has already spent more than $40 million on total upgrade efforts – including nearly $12 million to increase dissolved oxygen levels – and has continued those efforts voluntarily. APGI may spend as much as $69 million more to meet the water quality improvement requirements set forth in the 401 certificate. However, if a surety bond requirement is ultimately determined to be within the state’s authority and necessary to ensure APGI’s compliance with the dissolved oxygen requirements, the amount of that bond should not exceed $69 million.

401 Certificate Not Issued In Timely Manner

APGI’s appeal raises a second key issue – that the 401 certification was not “granted or denied” within a specific time period as required by DENR’s own rule and the federal Clean Water Act.

The original application was filed in May 2008.

The State waived the requirement for a 401 certificate for two reasons:

1. DWQ failed to issue an effective 401 certification within 60 days of a public hearing. A public hearing was held on January 15, 2009; and

2. DWQ it failed to issue a fully effective 401 certificate within one year of the date that APGI filed its application for it.

Lexington Dispatch: Decision on Yadkin water quality permit "should remain free of political pressure"

The Lexington Dispatch ran an editorial Wednesday saying that “Legislators need to pause and think carefully about the path they’re heading down. If they take over this private business, what’s to keep them from doing it to others? And should they do that and then allow another business to operate it, then that would be a particularly troubling development. Certainly reasonable safeguards that ensure water access are justified, but the license already covers that ground.”

In addition, the editorial stressed that Alcoa’s pending application for a water quality permit should remain free from political pressure: “Finally, politics shouldn’t come into play on the water quality permit. That decision should be based on the technical aspects alone. If legislators truly want to take over the project, they can attempt to do that through legislation. State regulatory bodies should remain free of political pressure to issue a certain decision.”

Click here to read the entire article.

Fish advisory should not impact water quality certificate

A lot of folks are wondering if the recent fish advisory issued for Badin Lake will impact APGI's application with the State of North Carolina to receive a Section 401 water quality certificate for the Yadkin Hydroelectric Project.

It shouldn’t.

The 401 water quality certificate focuses on the quality of water being discharged from our dams.  We are confident that the Yadkin Project will meet all relevant water quality standards.

A recent water test conducted as part of the 401 process has confirmed that no PCBs were detected in the Badin Lake water being discharged from the Badin dam — nor were any other contaminants found. This confirms prior results that have regularly shown that the water quality in Badin Lake is good and in compliance with applicable North Carolina water quality standards.

The N.C. Division of Water Quality has said it will study the source of PCB contamination in Badin Lake, and it should.  But that should not impact the Yadkin Project’s unrelated water quality certificate. 

Low-level fish advisory doesn’t change recommended fish consumption at Badin Lake

The N.C. Division of Public Health has issued a low-level fish advisory for Badin Lake that reiterates its recommendation that residents should limit their consumption of largemouth bass and catfish to no more than once a week.  Pregnant women, nursing mothers and children under 15 should not eat these fish at all.

This advisory does not change the current recommendations for eating fish in Badin Lake in any way.  Under an existing statewide advisory for mercury, the N.C. Division of Public Health has already recommended limiting consumption of largemouth bass or other fish high in mercury to no more than once a week.

This advisory is the result of a fish tissue study that was recommended and partially funded by Stanly County.  The study — the most sophisticated study of fish tissue ever conducted in North Carolina — found slightly elevated levels of PCBs in one largemouth bass and three catfish out of 30 fish that were tested.

Given the prevalence of PCBs in every waterway in America, it is not surprising that a highly sensitive study would find a few fish with slightly elevated levels.  If the State used the same procedures to test fish in other lakes and rivers in North Carolina, it would likely find similar levels of PCBs in fish from those waters.

The presence of PCBs in fish is not an isolated issue affecting Badin Lake.  In fact, test results posted on the N.C. Division of Water Quality website indicate that fish in many other lakes and rivers across the state — including the Yadkin River near Mocksville, upstream of Badin Lake — have been found to have elevated levels of PCBs. 

At a public meeting on Wednesday, Department of Health officials said that although this study wasn’t designed to identify potential sources of contamination, it makes sense to look upstream for sources of the contamination since a majority of fish with elevated PCB levels were caught in the northwest part of the lake.

Yadkin Project discharges expected to meet North Carolina water quality standards

Gene Ellis shared the following remarks on January 15, 2009 during the public hearing regarding APGI's application for a Section 401 water quality certificate:

Good evening.  My name is Gene Ellis and I am the licensing and property manager for Alcoa Power Generating Inc.  We welcome this opportunity for the public to comment on our application for a 401 water quality certificate from the North Carolina Division of Water Quality, which is required for the Federal Energy Regulatory Commission to issue a long-term license for our hydroelectric project.

The relicensing process involves a comprehensive examination of the Yadkin Project over the course of several years. This includes an environmental impact assessment under Federal Energy Regulatory Commission regulations.  Tonight’s hearing involves one specific aspect of our operations — whether or not the Yadkin Project will meet North Carolina water quality standards as measured in water being discharged from the powerhouses. 

You may hear mention of environmental sites associated with the Badin Works plant historically operated by Alcoa Inc. Let me be very clear. Alcoa is committed to protecting public health and the environment. We have worked closely with state government in ensuring that we manage these sites in the interest of public health and the environment. Alcoa will not abandon this commitment and fully understands that this is an ongoing responsibility. It is important to recognize that these environmental issues are being addressed separately by Alcoa under the close regulatory authority of the North Carolina Department of Environment and Natural Resources.

Water quality has been an important focus of the relicensing process from the beginning.  Independent consultants have conducted numerous studies of the Yadkin River water quality during the past six years.  In addition, the State routinely collects water quality data in the Yadkin Project reservoirs. 

Based on this volume of data, we believe that discharges from the Yadkin Project dams will meet applicable water quality standards in North Carolina.  To address concerns about dissolved oxygen levels, we have already begun investing in new equipment to increase dissolved oxygen levels and improve water quality in the Yadkin River.  In fact, recent testing has demonstrated that dissolved oxygen levels are already increasing and water quality is improving.

Within the past year, APGI has worked with DWQ to conduct an additional study and submit plans for further sampling and analysis to augment the 401 application.  That work includes an independent assessment of the quality of water being discharged from the Narrows powerhouse at Badin Lake.  This sampling — for a wide array of constituents — was requested by DWQ in response to concerns that were raised by Stanly County.

The findings, which were filed with DWQ in September 2008, demonstrate that the operation of the Narrows development does not result in the discharge of pollutants in excess of North Carolina water quality standards.  Of the more than 100 substances that were tested, absolutely none were detected in concentrations in excess of North Carolina water quality standards.  In most cases, tests could not detect the presence of any of the substances, even using highly sensitive and sophisticated testing methods. 

After carefully reviewing the data relating to the water quality in the discharges from our dams, APGI strongly believes that discharges from the Yadkin Project will meet North Carolina’s water quality standards and that a 401 certification should be issued in the next few months.

As I mentioned earlier, this certificate is required as part of the federal relicensing process for the Yadkin Project and any further delay in issuing the certificate will continue to delay the benefits that the people of North Carolina negotiated in relicensing.  This 401 certification process needs to stay focused on the sole issue that the State has been asked to consider — whether or not the water being discharged from our dams will meet State water quality standards.  Thank you.

Public Hearing on APGI’s 401 Application Rescheduled for January 15, 2009

The N.C. Division of Water Quality (DWQ) has rescheduled the public hearing regarding APGI’s application for a Section 401 water quality certificate. As I’ve mentioned before, APGI must receive a water quality certificate from the State of North Carolina before FERC can issue a new long-term license for the Yadkin Project.

The public hearing originally scheduled for December 16, 2008 will now be held on January 15, 2009 at 7 p.m. at the Stanly County Commissioners Meeting Room at 1000 North Street in Albemarle, NC 28001.

We requested the hearing be rescheduled to make sure that all interested parties were properly notified. Interested members of the public have the opportunity to attend and comment at the public hearing.

NC Division of Water Quality issues public notice re: water quality certificate

The N.C. Division of Water Quality (DWQ) has issued a public notice regarding APGI’s application for a Section 401 water quality certificate. As I’ve mentioned before, APGI must receive a water quality certificate from the State of North Carolina before FERC can issue a new long-term license for the Yadkin Project.

At our request, DWQ has scheduled a public hearing regarding our application. The hearing is slated for Tuesday, December 16 in Albemarle, NC. We requested this hearing to ensure that all interested parties have an opportunity to comment on the water quality application.

As part of the application process, APGI recently tested the water quality below the Narrows (Badin Lake) dam. The sampling showed that the discharges meet state standards for water quality. You can read more about the discharge sampling in an earlier blog entry.

The Relicensing Settlement Agreement for the Yadkin Project includes several measures designed to protect and improve the water quality in the Yadkin River, including the installation of state-of-the-art aeration technology to increase dissolved oxygen levels and improve water quality as part of a $240 million upgrade.

In addition, APGI has agreed to modify the minimum low flow in the river, provide protection through vegetated buffers and conduct flow monitoring in the river.

Sampling shows discharges meet N.C. water quality standards

Good news for those interested in the water quality of the Yadkin River:

Recent testing of the water quality below the Narrows (Badin Lake) dam shows that discharges meet state standards for water quality. This is an important milestone in APGI's effort to receive a required water quality certificate from the State of the North Carolina.

As part of the application process, the N.C. Division of Water Quality (DWQ) asked APGI to collect discharge samples from the Narrows Reservoir. The discharge sampling was conducted on August 13, 2008 in accordance with the “Sampling Plan for Priority Pollutants in the Narrows Tailrace” that was approved by DWQ in a letter dated July 31, 2008.

Samples were analyzed for more than 100 different parameters, including metals and organics, and the results found that all parameters were below North Carolina state standards or, where standards do not exist, below the method detection limit. These results demonstrate that the operation of the Narrows development does not result in the discharge of any of these constituents in excess of state standards.

I should note that the discharge samples were collected by ENSR, a widely respected global environmental firm, at a water quality monitoring station approved by DWQ. The sampling was done in accordance with the study plan and the laboratory analysis was conducted by Columbia Analytical and Prism Laboratories, both North Carolina certified laboratories, following standard EPA methods.

We have now provided all of the information necessary for DWQ to evaluate our application for a new water quality certificate.