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.

The Red Herring of the Day: Alcoa and the Chinese

“Something that distracts attention from the real issue.” That is the Webster's definition of a “red herring” and it is a favorite tactic of the folks who support a state takeover of Alcoa's privately-owned hydroelectric business along the Yadkin River.

Their latest ploy – suggesting that the State of North Carolina needs to take control of the Yadkin Hydroelectric Project before Alcoa sells it to the Chinese. It's such an unfounded, unsubstantiated rumor that it’s hardly worth addressing. But some folks are apparently giving thought to the question, and it is diverting attention from the issues that people really care about - like the fact that a state takeover will cost North Carolina taxpayers more than $500 million.

Or the fact that people across North Carolina are criticizing the idea of a State takeover. The Salisbury Post  (April 21) said a takeover will “make other companies think twice about investing in North Carolina,” and the High Point Enterprise (April 5) said “in no way is it proper for the state and federal government to essentially seize the property of this taxpaying business - or any private property.”

But back to the issue of the Chinese.

Is there any evidence to suggest that Alcoa will be bought by the Chinese ... or anyone else for that matter? No. Alcoa is a Fortune 100 company and is the largest aluminum maker in the world. And what if another company bought Alcoa? Could they prevent the State of North Carolina from withdrawing water from the Yadkin River? No, North Carolina decides who gets to withdraw water under its regulations.

There is absolutely nothing to this rumor. At best it's a simple scare tactic aimed at those who don't understand the issues. More likely, it’s a desperate diversion from the takeover crowd whose arguments are slipping in the halls of government in Raleigh because the takeover cost numbers they have bandied about simply don’t add up.

Salisbury Post: Takeover is anti-business

The Salisbury Post published an editorial today criticizing the State of North Carolina's efforts to take Alcoa's privately-owned hydro project.  The editorial notes that "Alcoa's operation of these dams was never made contingent on employment figures, and a state takeover won't resurrect the smelters or bring back those jobs. It will simply make other companies think twice about investing in North Carolina."

Salisbury Post: Takeover is anti-business

Supporters of a state takeover of Alcoa's Yadkin Hydroelectric Project argue the action is justified because of lost jobs at Badin Works, the need for better water control, potential state revenues to be gained from the sale of electricity, environmental issues and because the Yadkin River is a public resource whose benefits should flow primarily to the people of the North Carolina.

Let's look at some of these issues:

Jobs: If loss of jobs is justification for the state to take over a company, then Freightliner, Food Lion and other businesses better line up their legal defenses. It's unfortunate that the Alcoa jobs vanished, along with tens of thousands of textile, tobacco and furniture manufacturing jobs across the region. But Alcoa's operation of these dams was never made contingent on employment figures, and a state takeover won't resurrect the smelters or bring back those jobs. It will simply make other companies think twice about investing in North Carolina.

Water control: Lake levels at High Rock and downstream impoundments have been an issue in the past, particularly during drought, and will likely be so in the future. That's one of the reasons for the federal relicensing process — to address such concerns, and Alcoa's relicensing proposal gained the approval of 23 local, regional and state groups, including the N.C. Department of Environment and Natural Resources. The relicensing agreement includes stronger drought protection and improved water management. A state takeover won't stave off drought, sedimentation or farmland runoff, nor will it magically balance the competing needs of Yadkin River users.

Potential revenue: Takeover advocates argue the state is entitled to Alcoa's revenues because they are generated via a public resource. Whether profits are $44 million (as takeover advocates claim) or $8 million (as Alcoa says), the principle is the same. If a business' use of a public resource means the public is entitled to the profits, the state could take over many other businesses — including other small hydroelectric operations. In reality, every business benefits to some degree from public resources, whether it's a river, local water and sewage lines, interstate highways or municipal airports. But the public benefits in turn from the payment of corporate income and property taxes.

Environmental cleanup: Like water-level issues, this is an ongoing concern, especially in light of questions about PCB contamination of fish in Badin Lake. However, Alcoa has shown a willingness in the past to work with state and federal officials to address such problems. Under federal law, it has a permanent legal responsibility to remediate environmental problems. Again, if the state believes Alcoa is not fulfilling their legal obligation, that’s an issue worth contending, but it's not a justification for takeover. State ownership won't spontaneously solve any remaining environmental problems; it will simply shift more of the burden to the state and its taxpayers.

Supporters of this state takeover, including Rowan Reps. Lorene Coates and Fred Steen, may raise some legitimate issues, but they fall far short of justifying the hostile usurpation of a private business that has operated in the state for more than 90 years. Rather than resulting in a public trust to operate Alcoa's dams, the takeover talk is more likely to create mistrust of North Carolina's business climate and invite a costly court battle.

Alcoa to FERC: Gov. Perdue’s motion to intervene in hydro relicensing “lacks justification"

Alcoa Power Generating Inc. (APGI) filed a formal response Wednesday to N.C. Gov. Bev Perdue’s motion to intervene in in the federal relicensing of the Yadkin Hydroelectric Project.  On April 1, Gov. Perdue asked the Federal Energy Regulatory Commission (FERC) to hold an immediate hearing as part of her effort to pursue a government takeover of the privately-owned Yadkin Project.

APGI filed a response with FERC, noting that Gov. Perdue’s motion “lacks justification and legal merit” and “should be denied expeditiously.” 

The company explains that Gov. Perdue’s motion to intervene is “unnecessary and duplicative because the State of North Carolina is already a party to this proceeding.”  The N.C. Department of Environmental and Natural Resources (DENR) has been actively involved in the relicensing process since 2002 and has acted in an official capacity on the State’s behalf.  DENR formally intervened in the Yadkin Project relicensing on February 22, 2007.   

“The relicensing process has been ongoing for more than six years, and North Carolina has been involved from the beginning,” said Gene Ellis, APGI Relicensing & Property Manager. “The issues raised in the Governor’s filing have been fully vetted and FERC staff has already recommended issuing a new long-term license to APGI. The intervention is simply a belated attempt to take a privately-owned business for the benefit of the State.”

Twenty-three organizations negotiated in good faith to develop a Relicensing Settlement Agreement that addresses how the Yadkin Project will be managed in the future.  The agreement received widespread support from state agencies representing North Carolina, local governments including some within Stanly County, environmental groups like American Rivers, organizations representing local homeowners and recreational users, business groups and others. 

In addition, FERC staff has already recommended issuing a new long-term license to APGI and has said they “do not consider federal takeover to be a reasonable alternative” for the Yadkin Project.

APGI has vowed to fight North Carolina’s unprecedented bid to take its privately-owned hydropower business.  If successful, a government takeover could cost North Carolina taxpayers more than $500 million and damage North Carolina’s “business friendly” reputation.

A complete copy of APGI’s filing with FERC is available at: http://elibrary.ferc.gov/IDMWS/common/OpenNat.asp?fileID=11991245

High Rock Lake Association speaks out against state takeover

The High Rock Lake Association’s Board of Directors has unanimously voted to oppose North Carolina’s effort to take Alcoa’s privately-owned hydroelectric business and Gov. Perdue’s motion to intervene in the relicensing of the Yadkin Hydroelectric Project.  You can read about it here in the Lexington Dispatch: Lake group challenges state proposal on Alcoa and the Stanly News & Press: HRLA opposes bill, favors Alcoa.

A press release cited the association’s concern with the continued delay in the relicensing process, the State’s disregard for the established relicensing process in which the association actively participated and the burden on North Carolina taxpayers that would result from a government takeover.

The entire press release is posted below:

High Rock Lake Association Challenges State Proposal

LEXINGTON, NC – At a meeting this week of the High Rock Lake Association (HRLA), their Board of Directors unanimously approved a motion to take issue with North Carolina’s unprecedented proposal to take over the “Yadkin Project,” Alcoa’s power generation facilities and reservoirs on the Yadkin River.

In a written review of the proposed Senate Bill 967, Larry Jones, President of HRLA, pointed out that there are several areas that demand explanations from our legislators, including causing further delays in the license renewal process, lack of legal precedent, loss of county tax revenues, adding to the NC taxpayer’s burden, assuming responsibility for pollution abatement, destroying the “business friendly” reputation of NC, and ignoring circumventing normal requirements of accountability and transparency in creating a new “authority.”  

The HRLA Board also voted to object to Governor Perdue’s motion to FERC to intervene in the Relicensing process. After conscientiously and publicly negotiating for over six years with Alcoa (APGI), the Federal Energy Regulatory Commission (FERC), and the many other stakeholders on the Yadkin River Basin to arrive at the pending, detailed Relicensing Settlement Agreement (RSA) under FERC’s relicensing procedures, it is extremely disappointing to HRLA and its’ 1,500+ members to suddenly hear the State call for an “emergency hearing” to hear a motion to “allow intervention out of time”! 

The state is also claiming that “the Governor is doing no more than implementing the will of the electorate and is deserving of deference on matters of timing….”! This is despite the fact that the NC Dept. of Environment & Natural Resources and the NC Wildlife Resources Commission have been involved in the process since 2002. The Governors’ actions, in the opinion of the HRLA, do not reflect the will of the people.

HRLA believes that these lakes are one of the crown jewels of NC providing environmental, recreational, economic, and aesthetic benefits.  We encourage everyone to study SB 967 and consider the questions it raises.

For further information, and a review of SB967, please see the HRLA website.