Progress at the Yadkin Project: Part 2

A couple weeks ago, I started a blog series to talk about the progress we've made over the last few months. In the meantime, we've had several good news stories that I posted, but I'd like to get back to sharing our progress. Earlier, I talked about sharing our financials and our operating expenses. Today, I'd like to cover how we've addressed water quality concerns.  There are two parts to this issue:

DO Report: We have been monitoring dissolved oxygen (DO) levels at the Yadkin Project for several years and are encouraged by the results. We shared the 2010 Dissolved Oxygen Report with the NC Division of Water Quality (DWQ) on January 14. The results show that instantaneous DO levels for water leaving the Yadkin Project met or exceeded the instantaneous DO standard 99.9% of the time in 2010. The DO daily average level met or exceeded the daily DO standard 97.4% of the time. 

APGI remains committed to meeting North Carolina’s water quality standards and continues to believe that the 401 certification that DWQ issued in 2009 assures those standards will be met. 

401 Water Quality Certificate: We appealed DWQ’s decision to revoke our 401 Water Quality Certificate on January 28. Our appeal will show that DWQ was well informed about our solution for increasing dissolved oxygen levels and that APGI did not withhold important information. 

The resolution of these issues is a necessary first step to implementing the many positive enhancements in the Relicensing Settlement Agreement.

My next blog in this series will cover improving life in Badin.

Alcoa wins national award for successful brownfield redevelopment

On April 5, Alcoa received the Phoenix Award Grand Prize for excellence in brownfield redevelopment for reclaiming a former aluminum smelter in Oregon and returning it to productive use.  (Read the press release.)

This was an amazing project. We partnered with the Port of Portland and FedEx and took a 700-acre industrial property and created an industrial park that now has 350 jobs and potential for more.

It's what we want for Badin too.

In February, we started the redevelopment of the Badin site, and will invest more than $10 million this year preparing the facility - including demolition, enhancing the appearance and improving the facilities - for new tenants to bring new jobs to the community.

The Troutdale project shows that with effort and dedication you can take a former plant site and give it new life. You can create new jobs and improve the quality of life of residents in the area - when everyone pulls together to make it happen. That was the key to our success in Troutdale, and we are working hard to replicate it here in North Carolina.

Salisbury Post profiles former Alcoa employee

This morning’s Salisbury Post includes a profile of former Alcoa employee Frank King, Jr.  Frank worked for Alcoa for 44 years, playing a key role in early residential development along High Rock Lake and the creation of Tuckertown Reservoir. He retired in 1978. 

“People used to say that no one knew Alcoa’s reservoirs, especially High Rock Lake, better than Frank King Jr.,” writes reporter Mark Wineka.

From what I hear, that’s certainly true.  

All of us at Alcoa were thrilled to read about Frank and his family.  If you’d like to read the entire article (97-year-old recounts battling malaria for Alcoa) you can find it online at:  www.salisburypost.com/News/032411-wineka-frank-king-man-for-the-ages-qcd

Alcoa Becomes Founding Member of Duke Center for Sustainability & Commerce

Alcoa, together with the Alcoa Foundation, announced today that Alcoa has become a founding member of the Duke Center for Sustainability & Commerce, an organization dedicated to collaborating with industry and government to turn the vision of sustainability into products and solutions serving society.

The center is part of Duke’s Nicholas Institute for Environmental Policy Solutions, a non-partisan institute focused on finding solutions to the nation’s most pressing environmental challenges. It was established at Duke University in 2010.

“The Duke Center’s focus on collaboration and innovation fits well with Alcoa’s approach to developing products and solutions that contribute to a sustainable world,” said Kevin Anton, Alcoa’s Chief Sustainability Officer. “Working together, we can help communities and companies develop sustainable strategies to meet rapidly growing demand for infrastructure and transportation created by increasing population and urbanization.”

Anton will join the center’s Industry Council, an advisory panel for research and outreach.

Alcoa Foundation President Paula Davis said the Center’s research plays an important role in turning concepts into reality.

“The research depth of Duke University along with the expertise of the Center’s business partners creates a powerful combination,” Ms. Davis said. “We are pleased to be part of this effort and look forward to the advancements in sustainable communities that will result.”

Through its research, the Center is leading efforts to create a new generation of technological and organizational innovations to meet global sustainability challenges. It is led by Dr. Jay S. Golden who founded and co-directed the Sustainability Consortium prior to joining Duke.

“Alcoa has a long history of innovation that has led to great successes in their operations and product designs,” said Golden. “Our partnership with Alcoa will provide us a key manufacturing perspective from an organization whose products are critical to global commerce.”

Progress at the Yadkin Project: Part 1

Over the last few months, we’ve heard a lot of feedback about what Alcoa Power Generating Inc (APGI) needs to be doing in North Carolina. 

I’m going to spend the next few blog postings covering what we’ve done.  Today’s topic: our financials.

On March 5, we responded to requests to be more open about our financial operations by publicly sharing our financial reports for the Yadkin Project for 2008-2010 (audited by PricewaterhouseCoopers).

Before releasing the financial data, we sat down with Department of Commerce Secretary Keith Crisco and others to show that the Yadkin Project has an average net profit of $8 million a year and a projected negative cash flow due to significant capital investments. Only a skilled operator with a long-term outlook can be successful, particularly given the $180 million investment that APGI is planning.

Looking at the audited numbers, you’ll see that operating costs are more $12 million a year and continue to increase.  Those costs include:  

• Cost of power generating: More than $4 million a year for labor, maintenance, tools, parts, paint, vehicles – costs that will continue to rise over time.

• Cost of transmission: More than $450,000 a year to maintain APGI-owned transmission lines which are required to transmit electricity from the dams to the grid.  

• Operating and overhead expenses: $7.78 million a year to operate the dams, including over $1 million a year for FERC-required property and shoreline management and over $3 million in business costs such as engineering, insurance, environmental and safety related expenses, and technology. 

Compare those figures with The State of North Carolina’s 21^st Century Plan, which estimates it will cost $2.79 million a year to run the Yadkin Project and shows those costs remaining at a fixed rate for the next 50 years. In other words, the state believes it can operate and maintain the dams for nearly 80% less than APGI and hold those costs steady for 50 years. What do you think?

Stay tuned for my next posing on water quality.