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Recapturing river resource isn’t a ‘taking’

By Nancy McFarlane
For the Salisbury Post
Alcoa’s public-relations specialists have repeatedly stated that the state of North Carolina is attempting to take Alcoa’s private property during the current relicensing process for the Yadkin Hydroelectric Project. But there is no “taking of private property” without just compensation, as Alcoa implies.
Alcoa has always understood that its license for the Yadkin Project was for a limited number of years. In return for receiving from the federal government ó for free ó the exclusive license to generate hydropower from the Yadkin River for 50 years, Alcoa agreed to transfer the project property at the end of its license if the federal govenment decided that, in the public’s best interest, someone else should be given the right to generate power from the Yadkin River. If the federal government decides to reclaim the Yadkin Project, Alcoa will be compensated for its property exactly as Alcoa understood and agreed when it originally accepted the Yadkin license in 1958. Now, Alcoa would like the public to believe that it had a different deal.
The hydropower potential of the Yadkin River is owned by the public, not Alcoa. For the past 50 years, Alcoa Power Generating Inc. (APGI) and its predecessors enjoyed the exclusive right to use the water of the Yadkin River to generate electricity under the terms of the license issued by the Federal Energy Regulatory Commission (FERC). That 50-year right to use the publlcly owned power potential of the river to generate electricity has now expired, and Alcoa is continuing to generate electricity under year-to-year annual licenses from FERC that allow the project to continue operating while FERC decides whether or not to give Alcoa ó for free ó another 30- to 50-year license.
In return for the privilege of damming up the Yadkin River and using the public’s resource to generate electricity worth millions, if not billions, of dollars, while inconveniencing its neighbors above and below the dam, Alcoa had to acknowledge that the people own the water and that the Federal Power Act gave the government the right to reclaim the project at relicensing. The law provides that whatever entity is granted the federal right to generate hydropower from the Yadkin River has a legal right to project property. As a FERC licensee, Alcoa specifically agreed ó and is required by federal law ó to transfer any project property it owns at a price set by federal statute, not by the market, if the federal government decides that someone else should operate the project after the expiration of Alcoa’s existing license.
Relicensing is supposed to, by law, make sure that the river resources are still being used for the benefit of the public. The guiding assumption behind the Federal Power Act was that the major rivers of the United States belong to the people of the United States, and no one should be allowed to use those waters solely for their own profits. The river and the benefits of the electricity it generates belong to all of us, as provided by longstanding law.
No license-holder of a hydro project has a “right” to a new license at relicensing. Alcoa, however, would like to have the public believe that because they have already enjoyed the Yadkin license for 50 years, it would be wrong for the federal government to exercise its right to reclaim the project as provided by law and agreed to by Alcoa. Instead, Alcoa apparently believes that the federal government should just hand over the equivalent of a government subsidy that may be worth billions of dollars, even though the public receives almost nothing in return. Alcoa’s arguments about protecting a “privately owned business” are really about making sure Alcoa ó a privately owned business ó gets a great big government handout.
Federal recapture has to be done at the end of a license. For the Yadkin Project, that means now. The law and Alcoa’s license are very specific about the price to be paid and the process of returning the water to its rightful owner, the public.
Alcoa, in its agreement with the government, acknowledged it had a license to use project property to generate power from the public’s resource for 50 years, at which time the license expired. (Project property boils down to the land under the water and all the other assets necessary to use the river to produce electrical power.) Alcoa, in the agreement, acknowledged that the government could refuse to renew the license. Congress believed that a 50-year license provided sufficient time for an investor to amortize or recover its cost of the project and to receive a fair financial reward for building the dams. A 50-year license provided a specific deadline at which the license would expire and the public would have an opportunity to regain control of their water resources for their own prosperity. It is our right; it is our law.
It is corporate spin from Alcoa to argue that its property is unlawfully being taken. The facts don’t agree.
– – –
Nancy McFarlane is president of the N.C. Water Rights Committee, a statewide coalition. Web site: www.ncwaterrights.org.
Listen in:WFAE in Charlotte (90.7 FM) begins the series ‘Public vs. Private: Power Struggle on the Yadkin’ today on ‘Morning Edition.’

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