(AMM) Alcoa water license bid draws N.C. protest

Government officials from a number of counties in North Carolina are rallying citizens against Alcoa Inc.'s bid for a 50-year license to continue using the Yadkin River to produce electricity.

Led by the Stanly County Board of Commissioners, residents say that a 50-year Federal Energy Regulatory Commission (FERC) license is too long and that the $40 million to $100 million in annual electric power revenue and water rights should belong to the public, not a for-profit corporation?especially one that stopped smelting aluminum in the region in 2002.

Over the past three months, resolutions opposing Alcoa's operation of the Yadkin hydroelectric project have been signed by the Anson, Cabarrus, Davidson, Iredell, Randolph and Union county boards of commissioners. On Monday, about 200 people protested in Raleigh, N.C., according to local media reports.

Alcoa has responded by saying that the plant has a positive economic impact of more than $8 million per year for the region, and the company is planning to invest more than $200 million to refurbish the dams over the next decade. Alcoa also has agreed to donate or make available for purchase more than 40 percent of its land holdings for recreation, game lands or conservation.

The company added that Stanly County officials have had five years to comment on the licensing process.

In 1958, FERC granted Alcoa a 50-year license to use the public waters of the Yadkin to generate electricity. In exchange, Alcoa pledged to create and maintain hundreds of jobs for Stanly County residents. That license expired April 30, and FERC gave Alcoa a one-year extension. Alcoa expects a long-term license to be issued in several months.

Originally, most of the energy was to be used at Alcoa's Badin Works aluminum smelter in Stanly County, which at its peak employed around 1,000 people. Nearly 400 people lost their jobs when the smelter was closed six years ago and more were laid off when the entire plant was shuttered last year. Now, subsidiary Alcoa Power Generating Inc. (APGI) is looking to use the hydroelectric plants solely as power assets.

Salem County officials said that one of the major motivations behind the original licensing was to provide jobs and development for the people of the Yadkin Valley.

"In North Carolina, the water rights have in the past been given to Alcoa with the understanding that Alcoa would use the water rights and license to provide jobs," the board of commissioners said. "Now, Alcoa no longer intends to provide those benefits to our citizens or the same benefits citizens in other states receive, but it still intends to keep most of the value of the federal license."

But Alcoa said it does provide a benefit to local communities. "APGI and Alcoa employ 31 people in the county, plus an additional 80 contractors, and have an economic impact on the county of more than $8 million per year," the company said in a letter. "The companies are the single largest taxpayer in Stanly County with annual property taxes of more than $500,000. Most counties in North Carolina would welcome those jobs and that kind of economic impact to their county."

The company also said that local officials are overstating the revenue produced by its 38-mile-long system of dams, reservoirs and hydroelectric generating plants.

"The Yadkin project's annual average revenue is approximately $43.6 million. After expenses and depreciation ($28.3 million), taxes ($5.3 million) and relicensing enhancements ($1.6 million), the net profits are approximately $8.4 million per year. One element the county has failed to consider is the $200-million-plus that APGI plans to invest in refurbishing the dams over the next decade," Alcoa said.

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