Alcoa Responds to NC Governor’s Attempts to Take the Yadkin Project

October 6, 2009

BADIN, N.C., Oct. 6 /PRNewswire/ — Alcoa Power Generating Inc. (APGI), a subsidiary of Alcoa Inc., responded to an unprecedented effort by N.C. Gov. Bev Perdue to seize control of its privately-owned hydropower business along the Yadkin River by filing a formal response with the Federal Energy Regulatory Commission (FERC) on Monday. In a September 18 filing, Gov. Perdue asked FERC to ignore its long-standing rules and regulations, disregard the findings of the state’s own environmental agencies and deny APGI a new federal license to continue generating clean, renewable energy.

“Gov. Perdue is asking FERC to ignore federal law and allow the state to take over a private business that has been a part of the North Carolina business community since 1915. It’s something that has never been done before and with good reason,” said Rick Bowen, president of Alcoa’s energy operations. “We hope that FERC will uphold the intent of the Federal Power Act and promptly reject Gov. Perdue’s effort to circumvent the law and take our property.”

In its response, Alcoa criticizes Gov. Perdue’s zealous pursuit of the company’s business and property.

It provides details that show her September 18 filing is fraught with inaccuracies and reflects a clear misinterpretation of the Federal Power Act.

In addition, Gov. Perdue’s actions show a complete disregard for FERC’s rules and regulations. Her request for a government takeover comes three years after deadlines specified in the Federal Power Act and flies in the face of FERC’s April 2009 ruling that, as a late intervener, Gov. Perdue must accept the existing relicensing record.

A complete copy of Alcoa’s response is available on the FERC web site at:


Gov. Perdue’s Takeover Effort Raises Questions

To make her case, Gov. Perdue has conveniently omitted or purposefully distorted Alcoa’s history of responsible environmental stewardship and community support.

“It is disappointing that Gov. Perdue would make such accusations without the supporting facts of the state agencies,” Bowen said. “I wish Gov. Perdue would have given us the courtesy of a meeting with her so we could have addressed some of these issues when she first took office. She has yet to accept a meeting with our representatives.”

The most glaring inaccuracies in Gov. Perdue’s filing involve the misrepresentation of Alcoa’s environmental record and flawed financial projections that grossly underestimate how much it would cost the State of North Carolina to acquire and operate the Yadkin Project.

- Environmental Issues: Alcoa and APGI follow all environmental regulations in North Carolina. If Gov. Perdue believes the company has failed to meet any of its environmental responsibilities or delayed taking any necessary action, she already has full regulatory authority over its waste sites.

While Gov. Perdue claims that “pollutants from former industrial operations at the Badin Works site remain a threat to human health and environment,” the N.C. Department of Environment and Natural Resources (DENR) has stated on the record that the sites do not pose a threat to public health or the environment. The company is committed to continue testing and monitoring these sites and is legally bound to make sure they don’t create any environmental concerns in the future.

- Financial Projections: Gov. Perdue’s financial projections include glaring errors and omissions. She has projected $2.8 million a year for operating and maintenance expenses but failed to take into account expenses associated with project land management, depreciation, other contracted costs, power substation and transmission, and general administrative expenses. Those expenses – which add an additional $11 million a year to the operating costs – demonstrate that Gov. Perdue has underestimated operating expenses by almost 400%.

In addition, the financial projections reflect a price of $24.1 million to acquire the Yadkin Project.

Even if a government takeover were possible, the price would include the updated cost of Alcoa’s net investment ($91 million), plus severance damages. Alcoa believes severance damages alone could be hundreds of millions of dollars.

Gov. Perdue’s relentless attacks on Alcoa stand in stark contrast to the actions of the N.C. General Assembly and her own N.C. Department of Environment and Natural Resources, and show a disregard for the 23 organizations who negotiated a relicensing settlement agreement with Alcoa that offers substantial benefits to North Carolina.


  • A bipartisan group of legislators in the N.C. House voted in overwhelming numbers (66-39)to defeat takeover legislation supported by Gov. Perdue. (August 2009 vote on SB 967)

  • The N.C. Department of Environment and Natural Resources has closely studied every aspect of Alcoa’s operations – including water quality, water resources and waste management issues – and support granting a new license for APGI. The Division of Water Quality issued APGI a required water quality certificate in May that clears the way for FERC to issue a new license, and the Division of Waste Management has said that waste sites on Alcoa’s other industrial property do not pose a health risk.

  • A collection of 23 organizations – representing state and federal agencies, local homeowners, recreational users and business organizations, environmental interest groups and other stakeholders – negotiated and signed a relicensing settlement agreement that supports a new license for Alcoa.

  • Grassroots organizations such as the N.C. Property Rights Coalition have expressed strong opposition to Gov. Perdue’s attempts to take Alcoa’s private property, raising concern that private citizens and small business owners may be subject to the same type of government takeover.

  • 82% of North Carolina voters oppose the state taking over a privately-owned business (Public opinion poll of 600 likely voters conducted in May 2009 by McLaughlin & Associates)

Despite these factors, Gov. Perdue and Commerce Secretary Keith Crisco continue to relentlessly pursue a takeover of Alcoa’s hydropower business. In fact, Gov. Perdue has even supported a lawsuit against her own Department of Environment and Natural Resources over the issuing of the water quality certificate for the Yadkin Project.

Alcoa believes FERC, the federal agency that regulates all hydropower projects in the United States, should dismiss Gov. Perdue’s motion and issue the company a new long-term license for the Yadkin Project. FERC staff has already recommended a new license for APGI, and the agency has all of the information it needs to make a final decision regarding a new license.


The Yadkin Project is owned and operated by Alcoa Power Generating Inc. (APGI), a subsidiary of Alcoa, Inc. For nearly a century, the company has operated four hydroelectric dams and reservoirs along a 38-mile stretch of the Yadkin River as a source of clean, renewable energy. The Yadkin Project includes four reservoirs — High Rock, Tuckertown, Narrows (Badin Lake) and Falls — where North Carolinians enjoy boating, fishing, camping and other recreational opportunities.

The Yadkin Project, one of 22 privately-owned hydropower projects in North Carolina, is licensed by the Federal Energy Regulatory Commission (FERC). The Yadkin Project received a 50-year license in 1958, and APGI is currently seeking a new long-term license. APGI began the relicensing process in 2002 and worked closely with stakeholders to reach a Relicensing Settlement Agreement in 2007. Under the provisions of the RSA, once APGI is issued a new license it will be implementing programs and measures that will significantly 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 conservation of lands surrounding the reservoirs, and create new public recreation facilities and opportunities for North Carolina residents.

Learn more at www.alcoafacts.com and http://yadkinproject.blogspot.com.

SOURCE Alcoa Power Generating Inc.

Source: newswire

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