Stanly County Commissioners Rebut Alcoa Claims On Radio Broadcast

As part of the multinational firm Alcoa’s effort to secure renewal of a 50-year federal license for a monopoly on hydroelectric power from the Yadkin River in Stanly County ("the Yadkin Hydroelectric Project"), Gene Ellis, licensing and property manager with Alcoa Power Generating Inc. ("Alcoa"), recently spoke on radio station 1010 AM WSPC about the federal law concerning federal recapture of the hydroelectric operations. Stanly County has urged that the law be invoked to permit the Project’s transfer to the State of North Carolina. In his address, Ellis wrongly said that the deadline for the use of the recapture law has passed and the purchase of the dams will cost North Carolina citizens more than they can afford. The actual facts are as follows:

1) There is no deadline for recapture recommendation by FERC under federal government rules. While referring to the Federal Power Act that established the Federal Energy Regulatory Commission (FERC) as the governing body for licensing the use of navigable waters, Ellis said recapture can only arise if recommended at least two years before a license expires. That’s not the whole story. The law [Section 7(c) of the Act] also provides that FERC has the authority to recommend recapture at any time during the relicensing process "for public purposes," and can deny the renewal of a license so that Congress can act on its recommendation.

This means that if there is information in the record before FERC that makes the case that it is in the public interest for the US Government to exercise its recapture right and transfer the project to a willing, new owner like the State of North Carolina, for compensation, then FERC is empowered by law to recommend to Congress that such an alternative in the public interest be considered. Stanly County believes a resolution by the State of North Carolina expressing its intent to develop the Yadkin Project for public purposes is relevant information; the record for the Yadkin Project is not closed and a decision has not yet issued on a new license. If the state’s Environmental Review Commission (ERC) recommends the General Assembly ask the federal government to recapture the Yadkin license on behalf of the State’s citizens in its report on the Yadkin Hydroelectric Project due by Feb. 1, 2009, then nothing in the federal law precludes FERC from acting on the State’s recommendation.


2) The purchase of the dams will be paid back with profits from the power revenue, and it will be paid off within a few years. Already the Yadkin Hydroelectric Project generates an estimated $45 million in annual electric power revenue for Alcoa that could and should work for the people, not for the benefit of a private multinational corporation. In fact, the electricity generated by the River over the next 50 years (the duration of the federal license) is conservatively valued in excess of $10 billion. While estimates on how much the recapture will cost vary, it will not run as high as the hundreds of millions Ellis and other opponents claim it will.

This recapture purchase is far better for taxpayers than the current situation. Alcoa sells the project’s energy on the open market to both in-state and out-of-state customers and uses the waters of the Yadkin as its free source for generating electricity. It can also transfer ownership of the project to anyone – including foreign businesses – who will continue to receive the same huge economic benefits for another 50 years if the current Alcoa license is renewed.

3) The benefit of a hydro project like Yadkin is that over the long-run, even with extensive capital costs for upgrading the facilities, the Project is virtually self-funding because it incurs essentially no fuel costs. The Yadkin Project will require somewhere between $100-$200 million in capital costs to upgrade the project facilities and bring them into environmental compliance. There may be some reduced energy--but that will be offset by the higher value of the ancillary service products that are now becoming priced at market. The hydro is self funding and would cost taxpayers nothing in the long run, in contrast to other forms of conventional generation where fuel purchases constitute the overwhelming bulk of the cost. The dams have long been paid for, as Alcoa gained control of this public resource in 1915. If granted a new license, the corporation will have controlled these public waters for 150 years.

4) The primary issue affecting the state is the future control of the Yadkin River’s water. In his address, Ellis said a change in project ownership will not change the availability of water in the Yadkin, since the State would still need to ask FERC for permission on water usage. But if the State were the licensee, it (rather than Alcoa) is the one that can propose changes, and the FERC rarely denies a legitimate use proposed by the licensee. Thus, the future water needs of North Carolinians who rely on the Yadkin for drinking, recreation and other uses could be subject to standards far different from that applied by a corporation like Alcoa that necessarily maximizes profit above its contributions to the public and to the State.

The Yadkin Hydroelectric Project has four hydroelectric stations, dams and reservoirs along a 38-mile stretch of the Yadkin River, one of the longest rivers in North Carolina and one of its greatest natural resources. The four water reservoirs are High Rock, Tuckertown, Narrows and Falls. The Yadkin-Pee Dee Watershed as a whole includes 21 counties and contains 93 state municipalities.

Quotes:
"Efforts by the Stanly County Commissioners have been devoted to gaining and sharing an honest understanding of the options available to the citizens of North Carolina," said Stanly County Commissioner Lindsey Dunevant. "The facts are that Alcoa is benefitting tremendously from the Yadkin Hydroelectric Project using one of North Carolina’s greatest natural resources, the Yadkin River, for free, and the disparity between what Alcoa contributes back to North Carolina versus what it takes out for its shareholders from the Project is vast and unfair to the citizens of the state. We hope the Environmental Review Commission will examine the reality of the situation and the whole text of the law when studying the Project, rather than the incorrect and incomplete picture Mr. Ellis presented in his address."

Related Links:
www.1010wspc.com
www.ncwaterrights.com
www.mmimarketing.com/blog/?c=Yadkin-Hydroelectric-Project

About This Effort:
In 1958, Alcoa, the world’s leading producer of primary aluminum, secured a federal hydroelectric license for the Yadkin Project on the Yadkin River in Stanly, Davidson, Montgomery and Rowan Counties in the Central Piedmont. In return, Alcoa promised aluminum manufacturing jobs for Stanly County for years to come. Alcoa has now disappeared as a major employer in the region and shut down its manufacturing plant, but it wants to continue reaping—for another 50 years-- the benefits of the Yadkin River after its license expired in April of this year. In addition, Alcoa discharged hazardous pollutants into North Carolina air and waterways for decades while harvesting immense profits from the Yadkin River and its smelting operations, but has yet to finish cleaning up that contamination. It has filed an application with the Federal Energy Regulatory Commission (FERC) to obtain another 50-year license. If Alcoa is successful, one of North Carolina’s most valuable water resources will be used to maximize Alcoa’s profits, instead of being used to benefit the people of North Carolina, who should be able to use their own natural resources to assure they enjoy the affordable electricity, local economic development, and clean, adequate drinking water available from alternative ownership of the Yadkin River Project.

Patty Briguglio
MMI Associates, Inc.
(919) 233-6600
patty@mmimarketing.com
PR Firms Raleigh, NC

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