Court upholds ruling that State agency unlawfully denied water quality certificate for Alcoa dams

Court upholds ruling that State agency unlawfully denied water quality certificate for Alcoa dams

Wake County Superior Court judge upholds ruling by administrative law judge, orders agency to issue decision on Alcoa application within 30 days

Alcoa Power Generating Inc. (APGI) won a significant legal victory in Wake County Superior Court on Friday when a judge upheld a previous ruling that the N.C. Department of Environment and Natural Resources (DENR) wrongly denied a water quality certificate that is necessary to relicense the company’s dams along the Yadkin River.

Superior Court Judge Bryan Collins ruled that an administrative law judge was correct in finding that DENR exceeded its authority, acted erroneously and failed to act as required by law when it denied APGI’s application for a water quality certificate in August 2013. Judge Collins denied the state agency’s appeal and ordered DENR to reconsider APGI’s application and issue a decision within 30 days.

“We’re pleased the court has reaffirmed what we’ve known all along: the state had no legal reason to deny our application. We urge the state to follow the judge’s order and quickly issue a water quality certificate for the Yadkin Project,” said Ray Barham, APGI Relicensing Manager for the Yadkin Project.

Judge Collins notes that in the days leading up to DENR’s decision to deny APGI’s application, “DENR’s customary process of reasoned review collapsed under the pressure of 11th hour action by the Governor’s office and the (Department of Administration), agencies outside of DENR and having no direct responsibility for the protection of water quality or the environment.”

Before the Governor’s office inserted itself into the review process, Judge Collins says a final report recommended approving APGI’s application and issuing a water quality certificate for the Yadkin Project.

“DENR would have issued a merits based decision on the Application on August 2, 2013, likely issuing a 401 in APGI’s favor, but not for the secret intervention of the DOA and the Governor’s office into the process…” states Judge Collins ruling. “The undisputed facts recited in the Order demonstrate that DENR reversed course at the last minute, only after Executive Branch pressure and the 11th-hour filing of the Lawsuit.”

The NC Department of Administration filed a lawsuit against APGI on August 2, 2013, claiming ownership of the land under the Yadkin Project dams. The case is currently being considered in U.S. District Court by Judge Terrence Boyle.

The state’s failure to issue a water quality certificate has resulted in the unnecessary delay of water quality protections and improvements. APGI cannot move forward with its plans to invest up to $80 million on water quality improvements at the Yadkin Project until it receives a new federal license.

“We remain committed to meeting North Carolina water quality standards and have a proven solution to continue improving water quality at the Yadkin Project,” Barham said.

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.

AP: Judge weighs dumping Alcoa lawsuit

Alcoa returned to U.S. District Court in Raleigh Thursday for a hearing related to the State of North Carolina's lawsuit regarding ownership of the riverbed beneath the Yadkin Project.

Here's a media report from the Associated Press about the hearing.

Judge weighs dumping Alcoa lawsuit

August 27, 2015

A federal judge questioned Thursday whether North Carolina was acting like a “banana republic” with its lawsuit challenging whether Alcoa Inc. owns the riverbed under Yadkin River dams it has operated for as long as a century.

U.S. District Judge Terrence Boyle quizzed lawyers for the state and the aluminum giant in court for an hour as he considered whether to dismiss the case. The lawsuit filed in 2013 challenges whether Alcoa holds clear title to the riverbed that allowed it to build the four dams and perhaps one day sell them.

Boyle asked state attorney Donald Teeter whether the lawsuit sought to punish Alcoa for closing its Stanly County aluminum smelter in 2007 where hundreds of people once worked.

“Why isn’t this like some banana republic that confiscates property?” Boyle said. “This is really a thinly veiled power grab.”

Read the entire article.

Legislators urge Gov. McCrory to end lawsuit with Alcoa

NC House Rep. Justin Burr, a Republican representing Montgomery and Stanly counties, recently shared on Facebook a letter that was sent to Gov. McCrory from five legislators who represent the Uwharrie region. The letter urges the state to drop its lawsuit and instead work with Alcoa to renew its hydro license and work together to attract new jobs to the region.

“We are writing to ask you to end the state’s lawsuit against Alcoa Power Generating Inc. (APGI) in light of two significant legal rulings against the state,” the letter says.

“These rulings make it increasingly clear that state and federal laws do not support the position of your administration. Continuing the state’s legal efforts to acquire ownership of the riverbed property or delay granting APGI a water quality permit is an irresponsible use of taxpayer dollars – and it negatively impacts the citizens we represent.”

Thank you to Rep. Burr, Rep. Rayne Brown (R – Davidson), Rep. Carl Ford (R – Cabarrus, Rowan), Rep. Harry Warren (R – Rowan) and Rep. Sam Watford (R – Davidson).     

Click here to read the entire letter.

The Final Barrier

The Stanly News & Press published on Tuesday a column I wrote regarding the latest developments regarding the Yadkin Project relicensing. Here's a copy of the column, titled "The Final Barrier":

When you stand atop the Narrows Dam, you can see for miles in every direction. There’s the Uwharrie National Forest and Morrow Mountain State Park, both remarkable for their pristine, undisturbed beauty. Between them flows the water of the Yadkin River.

That water – and four dams constructed along the river by Alcoa – has been the topic of much debate in Stanly County for more than a decade.

Dams, by definition, are a barrier. They capture the water flowing down the river and put it to good use – reservoirs like Badin Lake provide drinking water to local communities, generate clean and renewable energy, create recreational opportunities for people who love to swim, boat and fish, and spur economic development in the surrounding communities.

Alcoa has operated its dams along the Yadkin River for nearly 100 years. But when the company sought a new federal license for its dams, a new set of barriers emerged.

Many people in Stanly County were concerned about the jobs that were eliminated when the Badin plant closed. So shortly after the Badin plant was formally closed in 2010, we immediately began working to redevelop the property. We invested more than $10 million to transform the site into the Badin Business Park, which now ranks among the best industrial sites in North Carolina.

In 2011, Alcoa recruited the nation’s largest electronic waste recycler to Badin. ERI opened a regional recycling center that continues to grow.

Our commitment to jobs helped us reach an agreement with Stanly County last spring. The agreement includes significant investments to support economic development and provides the county with long-term access to clean, affordable water to support the county’s growth. We are now working in partnership with the county to recruit new jobs to the Badin Business Park.

In addition, we continue working to make Stanly County a better place to live. Alcoa awarded scholarships to local high school valedictorians, donated land for a Habitat for Humanity home in West Badin, and donated $20,000 to promote science and technology courses in Stanly County schools.

Only one barrier to a new license remained: obtaining a water quality certificate (known as a 401) from the NC Department of Environment and Natural Resources that recognized Alcoa’s commitment to meet state water quality standards.

In August, the agency was prepared to issue a 401 certificate for the Yadkin Project.

Our investment in new technology at Badin Lake had resulted in significant water quality improvements. In fact, our annual monitoring now shows that water leaving the Yadkin Project was meeting key water quality standards that will take affect once a new license is issued for the Yadkin Project.

With a proven technology in place and a commitment to spend an additional $80 million to fund further improvements upstream, Alcoa had successfully demonstrated its commitment to water quality.

After months of public hearings and careful evaluation by water quality professionals, DENR was ready to act. It prepared a copy of the 401 certificate and notified us about the impending announcement.

But a new, unexpected barrier emerged.

Gov. McCrory claimed the state owned the land under our dams and filed a lawsuit against Alcoa. His administration inserted itself into the regulatory process and insisted that DENR deny our 401 application.

So, once again, we find ourselves in a familiar place: fighting for the right to run the dams we built on the property we own. It’s a clear threat to our property rights – and the rights of anyone who owns property along a waterway in North Carolina.

For Stanly County, the lawsuit has unfortunate consequences.

It will further delay benefits such as the expansion of Morrow Mountain State Park, the development of a new waterfront park in Badin, the donation of land for a new water treatment plant, the funding of future economic development initiatives, and a host of other benefits for those who live or play on the lakes.

But our commitment to this community remains steadfast.

We will continue working to improve water quality and protect the beautiful natural resources along the river. We will continue providing time and money to support worthwhile causes in the community. And we will continue paying property taxes on the land we are fighting to protect.

We didn’t pick this legal fight, but we are prepared to defend our property rights in court. No matter how long it takes.