Alcoa Vows to Fight Efforts to Seize Privately-Owned Business

March 26, 2009

Proposed bill in the N.C. General Assembly would forcibly seize hydropower business along the Yadkin River, costing taxpayers hundreds of millions of dollars

BADIN, N.C., March 26 /PRNewswire/ — Alcoa Power Generating Inc. (APGI) said today that efforts by elected officials in North Carolina to forcibly seize its privately-owned hydropower business would cost North Carolina taxpayers hundreds of millions of dollars and harm the state’s “business friendly” reputation.

Sen. Fletcher L. Hartsell, Jr. introduced a bill (SB 967) Wednesday that sets up a State Trust that would allow the State of North Carolina to take the Yadkin Hydroelectric Project, a privately-owned business along the Yadkin River in central North Carolina that generates clean, renewable energy. Taking the Yadkin Project would cost North Carolina taxpayers hundreds of millions of dollars, including $240 million in required expenses to improve water quality and maintain and upgrade the dams and powerhouses.

“This has absolutely nothing to do with protecting North Carolina’s water. It has everything to do with the government trying to take a privately-owned business for its own benefit,” said Gene Ellis, licensing and property manager for APGI. “It’s a bad idea and sets a dangerous precedent for other North Carolina businesses. We will fight it.”

Beginning in 1915, Alcoa invested $80 million in private money to purchase more than 38,000 acres of land along the Yadkin River and develop four dams and powerhouses without any government aid or assistance. The project led to the development of four reservoirs, including Badin Lake and High Rock Lake, that have been a strong economic asset to the region. APGI has operated the Yadkin Project under a federal license since 1958; that license is now up for renewal.

“There are established state and federal processes for relicensing hydroelectric projects and Alcoa has played by the rules,” Ellis explained. “Since 2002, we have pursued a new hydropower license through proper channels and with the active involvement of state agencies, local governments and the residents who live in nearby communities. There are 22 privately-owned hydropower projects in North Carolina and this project should not be treated any differently – or held to a different standard – than other business in this state.”

A public opinion poll conducted by McLaughlin & Associates last year found that 71 percent of North Carolina voters oppose the idea of spending taxpayer money to take the Yadkin Project. Only 10% favored spending millions to take over the business. By a 2-to-1 margin, voters believed that a government takeover is a violation of private property rights.

Sen. Hartsell previously said that he had no interest in taking the Yadkin Project under any circumstances. While discussing a proposed study bill related to the Yadkin Project relicensing in a House Judiciary committee meeting on July 15, 2008, Sen. Hartsell said: “I want to say upfront and unequivocally that this bill is not, never was and is never intended to be a taking of any sort under any circumstances for anything. Period.”

The introduction of SB 967 represents a dramatic departure from Sen. Hartsell’s earlier comments.

Albemarle Mayor Whit Whitley and others are concerned that efforts to take control of a private business is bad for North Carolina’s “business friendly” reputation and may make it more difficult to recruit companies who are thinking about doing business here.

“Why is this issue even on the table?” Mayor Whitley wrote in a March 2 letter to Gov. Perdue. “The only true consideration is greed, and I am appalled that the state of North Carolina is buying into this type of thinking.”

“Greed for the ownership of Alcoa’s land around the lakes and greed for the revenue that the dams produce are not in the long-term best interest of the county or the state and certainly not in the best interest of the free enterprise system.”

North Carolina already controls water rights in the Yadkin River

APGI does not control access to the water in the Yadkin River, and the relicensing of the Yadkin Project will not limit the State of North Carolina’s ability in any way to withdraw water from the Yadkin River. State law gives North Carolina the authority to regulate water use within the Yadkin River, including the right to issue new water withdrawal permits. This ensures that North Carolina will always have access to water from the Yadkin River.

Established North Carolina law provides riparian water rights that ensure property owners along a river have a legal right to access and use the water running through their property. APGI owns 38,000 acres along the Yadkin River and uses the water that runs across its property to generate clean, renewable energy – without consuming the water as it flows downs the river.

North Carolina state agencies were actively involved in the Yadkin Project relicensing

North Carolina’s interests have been well represented during the relicensing process and will be well protected when APGI receives a new license. The N.C. Dept. of Environment & Natural Resources and the N.C. Wildlife Resources Commission have been actively involved in the relicensing process since 2002. Both agencies helped negotiate a relicensing agreement that will improve water quality in the Yadkin River, allow for increased water withdrawals by local municipalities, better protect the water supply during drought, provide for long-term land protection and create new recreation opportunities for North Carolina residents.

Widespread support for Alcoa Power Generating Inc.

There is widespread support for issuing a new federal hydropower license for the Yadkin Project. The relicensing agreement has been signed by 23 organizations, including two municipalities in Stanly County. The City of Albemarle is the largest municipality in Stanly County and one of the largest water users along the Yadkin River, and the Town of Badin is home to the Yadkin Project and represents the community most impacted by curtailment of the Badin Works plant. Both municipalities strongly support the relicensing.

Other supporters include state and federal agencies, environmental interest groups, and local homeowners, business groups and recreational users.

Additional Background Information

Learn more about the Yadkin Hydroelectric Project at www.alcoafacts.com and http://yadkinproject.blogspot.com.

SOURCE Alcoa Power Generating Inc.

Source: newswire

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