How the Federal Water Power Act Matters to the Yadkin Project
A law enacted 88 years ago is a key reason why the Federal Energy Regulatory Commission (FERC) should seriously consider whether Alcoa is entitled to receive yet another 50-year license for hydroelectric operations on the Yadkin River in Stanly County for the Yadkin Project. Interestingly, it is the same law that created the FERC in the first place.
The Federal Water Power Act of 1920, also called the Federal Power Act or FPA, encouraged the development of hydroelectric projects, such as dams and reservoirs, by setting up the FERC to license and relicense them. The FPA was clearly intended to include the licensing of power sites on “navigable waters,” which the act defined to include “streams or other bodies of water over which Congress has jurisdiction to regulate commerce among foreign nations and among the States.” That would include the Yadkin-Pee Dee River, which runs from Virginia to South Carolina.
In connection with FERC’s licensing obligations, the FPA requires FERC to grant a license to a project only if is best adapted to a comprehensive plan for improving or developing a waterway for several public benefits. Furthermore, the FERC is to determine, on the record, whether the project proposed is in the public interest. The Act expressly seeks to prohibit conduct under the license that is contrary to the antitrust laws and if FERC cannot fix the anticompetitive impact, it is authorized to refuse to issue a license that would maintain an anticompetitive position.
If Alcoa receives a new license, it will sell the Yadkin power to the highest bidder, wherever located. Whether or not Alcoa can monopolize any particular electricity market, it comes close to monopolizing the use of the Yadkin River waters. This monopoly allows Alcoa to gain great profit for its shareholders and allows it to ignore the environmental contamination connected to their now-defunct aluminum smelter in Badin, which cleanup they claim is irrelevant to a new FERC license. Both results—the right to control where the power goes and how the Project is operated, and ignoring claims for faster cleanup of its own environmental contamination -- damage North Carolina. Keeping the power in North Carolina, at reasonable prices, would restore some of the 1000 jobs the State lost when Alcoa shut down its smelting operations. On either count, we believe the FERC is justified in denying Alcoa an exclusive license to use the Yadkin River for its own benefit. FERC should consider whether the public interest is furthered by providing an opportunity to the State and its citizens to receive value from the River, rather than ignoring the public and the issues it has tried to raise on the record.
Section 14 of the FPA reserves to the United States the right to take over a non-publicly owned project upon expiration of its license. We urge FERC to complete the record in the Yadkin case by considering the option of federal recapture of the Yadkin Project with subsequent transfer to the State of North Carolina, and to make a recommendation to that effect or at least require license terms of any licensee, if not the State, would require the licensee to address the significant environmental issues associated with the Alcoa hydroelectric operations. Either option is preferable and more in the public interest than what Alcoa is offering at present.
The license Alcoa wants would grant the multinational firm another 50 years to possess a private monopoly over a public resource for its own benefit and accordingly deny to the citizens of North Carolina those same benefits. It is not what the creators of the FPA had in mind when they ratified it in 1920, and it should have no validity for the FERC – the commission formed by that very act 88 years ago – when it makes a final decision on the relicensing. In other words, it is time for the public interest to prevail, as the FPA intended.
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