What is the North Carolina Water Rights Coalition?
The North Carolina Water Rights Coalition is a group of concerned citizens, business leaders, government officials and others who want the state to recapture the use of the public’s water rights in the Yadkin River, for the citizens of North Carolina. The Coalition’s creation occurred as a result of the federal relicensing process for the Yadkin Hydroelectric Project, when its members became aware that federal law allows the consideration of issues such as who should control the River in the public interest. Presently, Alcoa controls the use of the Yadkin through its federal license; at relicensing time, the question is whether the continued control and use of the Yadkin by Alcoa is the best use, in the public interest.
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What is the Federal Energy Regulatory Commission, or FERC?
The FERC is the independent federal licensing authority for hydroelectric projects nationwide and consists of five appointed commissioners. The FERC was created as a result of the 1920 Water Power Act. That same Act limits the term of a license to 50 years and allows for reconsideration at the expiration of the license, on the issue of whether the renewal license best serves the public interest. Alcoa’s Yadkin license expires in 2008. Federal law also allows FERC to extend the license annually, so that FERC has time to make a proper decision. In that case, Alcoa (APGI) continues to hold the license, but only for a year at a time.
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What is the Yadkin Project?
The Yadkin Project involves hydroelectric stations, dams and reservoirs along a 38-mile stretch of the Yadkin River in central North Carolina. Stanly, Montgomery, Davidson and Rowan counties have shorelines along the four water reservoirs that include: High Rock, Tuckertown, Narrows (Badin Lake) and Falls. The Yadkin-Pee Dee Watershed as a whole includes twenty-one counties and contains ninety-three state municipalities.
In 1958, the Federal Energy Regulatory Commission (FERC) granted a 50-year license to Alcoa, the world’s leading producer of primary aluminum, for the Yadkin Project. Alcoa wants to continue reaping the benefits of the Yadkin River, including selling electricity generated by hydropower for its own profit, so it has applied for another 50-year license.
If the FERC grants the relicensing, Alcoa, a private multinational firm, will own and use the Yadkin’s hydro water rights for its private benefit. It will have a monopoly and make money on using the water that belongs to the people of North Carolina as a free fuel source for the next 50 years – in other words, the year 2058. The profits are expected to be extraordinary, because the electricity will be sold at market prices and the “fuel” is free.
Additionally, Alcoa can sell its rights to the Yadkin Project for profit any time in the 50-year period, including to any third party, based inside or outside the United States, that has no other commitment to North Carolina. The license and its powers would remain in effect for that company – and not the state nor its citizens – until 2058.
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What is the status of the Yadkin Project?
The FERC has yet to make a final decision on the project, and will not be able to do so until this summer at the earliest, pending on action the North Carolina Division of Water Quality takes in response to public comments on a water quality certificate application Alcoa needs to obtain a federal license for the Yadkin Project. That review could end as early as May 2, although the State can take steps to extend the time (up to a year) to consider the issues. If and when Alcoa earns that certificate, the process would continue to the FERC, which can choose to approve the relicensing application, deny it or condition it so that the public interest is better served.
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What is the highest and best use of the water from the Yadkin River?
The top priority for this water should be to sustain life. However, that is not the case under the current system, where the Yadkin River’s water to power Alcoa’s hydroelectric operations occurs before treating the water for drinking, plant irrigation and other uses by residential and business customers in Stanly County. Also, users of drinking water from the river have to pay a total of tens of millions of dollars for it, but the privilege of the hydro power supplied by the river’s water costs Alcoa nothing. This process where a private monopoly receives first-use preference over the county’s water customers exists even during a drought. The North Carolina Water Rights Coalition believes the process would work better and be more responsive to citizens if leaders agree that providing drinking water for residents is a more important use of the Yadkin River than generating power that would profit outside interests.
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What can be done to make sure that North Carolina’s interest is considered in the relicensing of the Yadkin Project?
Gov. Mike Easley has requested that the FERC delay the relicensing for one year. In addition, the commissioners of Cabarrus, Davidson, Randolph and Stanly counties, the Centralina Council of Governments, and many other leading officials, governing bodies and citizens of North Carolina have made their objections to doing business as usual, public. With sufficient time and interest by the State’s officials and citizens, the Coalition believes that the Yadkin River relicensing can be the opportunity for the State to develop a plan that will provide the means to make sure that the control of the Yadkin River remains with the people of North Carolina, rather than a private corporation with little connection to the State, for at least the next 50 years.
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Who will control the dams if the state is allowed to recapture the public water resources along the Yadkin River?
If the state of North Carolina is to be successful in recapturing its public water resources along the Yadkin River for the benefit of its citizens, the United States federal government will have to be persuaded to exercise its option to take over this non-publicly owned project and to transfer it to the State, upon payment of the net investment in the Project. This option occurs at the time the license expires, or about once every 50 years. The federal recapture option is allowed by Section 14 of the Federal Power Act (FPA).
If North Carolina were successful in obtaining the Yadkin Project, there will be time to consider how to use the hydropower assets based on what is in the best interests of the people in the state of North Carolina. Experienced and leading power utilities could be consulted, and municipalities and counties across the state will have an opportunity to gain ownership and benefit from the power generated at the Yadkin River. The state could consider the formation of a public power authority to oversee the project and maintain its operations. Public power authorities are held accountable by the N.C. Utilities Commission and follow the conditions set by that commission.
Recapturing the public resources along the Yadkin River for the public would serve as a vigorous economic driver for our state; bring jobs and prosperity to our entire region; and best of all, belong to the people it most directly affects.
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Does Alcoa pay a fee for its right to use our North Carolina public water resources as a source of fuel to produce power along the Yadkin River…like they do in Washington State and New York State?
Alcoa is not charged a fee based on its profits; it appears that the Company earns annual revenues in excess of $40 million from sales of the power generated at its hydroelectric projects along the Yadkin River. Because only Alcoa has hydroelectric operations on the upper Yadkin – and will maintain that exclusive status for another 50 years if FERC renews its current license – many North Carolinians view this as an unfair monopoly of our state’s water rights. They believe that the State needs the ability to control the Yadkin River in the interest of its citizens more directly, in the future, and that the issue is important enough and reason enough to ask FERC to deny the license and recapture the project for public gain, if Alcoa fails to acknowledge the State’s interest.
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What are the pollution concerns involving Alcoa and the Yadkin Project?
Alcoa has discharged hazardous pollutants into North Carolina air and waterways for decades without regulation, but has yet to finish cleaning up that contamination. Although the company has spent more than $8 million to provide appropriate environmental protection at six sites on its Stanly County property, the county believes there are more contaminated sites, although how many there are and to what extent they are contaminated remains unknown. Alcoa has not provided adequate disclosure of information requested by Stanly County, like the true cost of cleaning up the Badin Smelting Works, nor has Alcoa been willing to fund studies consistent with the best scientific approach on cleaning up the contamination.
Should Alcoa receive a 50-year license for the Yadkin Project, there is no certainty it will speed up its cleanup. The presence of such contamination may well pose a significant hazard to the community and adversely affect the water supply for Stanly County, as well as inhibit new and desirable development in the surrounding area. Businesses are reluctant to establish operations in areas with serious environmental problems.
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What is the experience of Alcoa in other states?
In the states of Washington and New York, Alcoa has more balanced agreements that extend more benefits to the community, but these are instances where the hydroelectric projects providing Alcoa with energy are owned by either by the state or a local governmental entity.
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How many people in North Carolina does Alcoa employ?
About 30 people work for Alcoa at the Yadkin Project. This is down from nearly 1,000 employees it had when it operated regular aluminum smelting in North Carolina. Alcoa promised hundreds of aluminum manufacturing jobs for Stanly County for years to come during its 1958 licensing for the Yadkin Project. Yet when it ended regular smelting in 2002, it laid off 377 employees.
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