Stanly: Alcoa blocked Clean Tech deal

Published 12:00 am Friday, December 16, 2011

By Karissa Minn
When just a few hours remained to secure 450 jobs and $300 million in investment, Stanly County said Thursday night that Alcoa has blocked its attempted deal with Clean Tech.
Alcoa shot down an agreement that “could have made the Clean Tech Project a reality in Stanly County,” the county said in a press release sent around 9 p.m. Thursday.
But officials from both companies disagree with Stanly County on the reason the talks failed.
Officials for the recently created steel company have said they want to locate at Alcoa’s former aluminum smelting plant in Badin that once employed about 1,000.
Alcoa officials had warned that unless their route to a new license to operate the dams was cleared by midnight Thursday, Clean Tech Silicon and Bar LLC would take its estimated 250 production and 200 support jobs somewhere else.
According to Stanly County Manager Andy Lucas, the county agreed to help Clean Tech secure the same financial incentives offered by Alcoa from any owner of the hydroelectric project.
But Alcoa said “no” to the terms of that agreement, Lucas said.
“Clean Tech made it clear they were willing to separate their investment decision from Alcoa’s relicensing process,” the press release said. “By rejecting that proposal, Alcoa stood in the way of Clean Tech’s decision to create jobs for Stanly County. … Alcoa controls the ability to locate the project and Alcoa’s requirements removed any hope of a responsible deal.”
The county’s press release commended Clean Tech representatives for their “open minded approach” to the discussions.
Dave Stickler, a partner in the Clean Tech project, said negotiations with Stanly County included an offer of financial assistance no matter who owns the dams. But he said it wasn’t Alcoa that caused the talks to fall apart.
“Unfortunately, in Clean Tech’s opinion, the motivation to try and take Alcoa’s hydro assets outweighed the focus on job creation and economic expansion in Stanly County,” he said.
With its press release, Stickler said, Stanly County also broke a “gentleman’s agreement” with Clean Tech and Alcoa to keep from commenting to the media before today.
“Clean Tech is terribly disappointed that we are not going to be able to make our investment in Stanly County,” Stickler said. “We appreciate the tremendous level of interest in our project shown by many, many citizens, community leaders and business professionals from Stanly County and Badin.”
Alcoa wasn’t just offering low-cost energy to the company, said Alcoa spokesman Mike Belwood, but also a direct investment in Clean Tech and long-term purchase agreements for it products.
“It’s unfortunate that the commissioners misread the scope of this effort,” Belwood said. “We worked diligently for the past 12 months to make this project happen. We are very disappointed that it appears the commissioners’ 11th-hour effort will be too little and too late.”
Stanly County commissioners held an emergency session late Thursday afternoon, but they emerged without a decision. Commissioner Lindsey Dunevant said after the meeting they were waiting on more information about the “final proposal” from Clean Tech.
He wouldn’t give details about what commissioners were waiting for, but he said they would consider reconvening later Thursday night if it was received in time.
Dunevant said the county has had “very productive” discussions in the past week with Clean Tech.
The county welcomes Clean Tech’s project and jobs, Dunevant said, but it has been trying to separate the proposal from the issue of Alcoa’s relicensing.
“We know that there are at least three entities, including Clean Tech, that could come and operate there apart and separate from the license,” Dunevant said. “In fact, we already have two others who have expressed interest in locating there.”
Stanly County’s press release says those unnamed companies “have made it clear that Alcoa’s relicensing is not important or related to their investment and job creation decision.”
The county says it will continue to work to make those projects a reality.
• • •
Alcoa Power Generating Inc. has been operating four dams on North Carolina’s Yadkin River under short-term licenses since its 50-year federal license from the Federal Energy Regulatory Commission expired in 2007.
Alcoa has sold the electricity to commercial customers since its smelter closed years ago. Company figures estimate that the dams could generate revenues of more than $2 billion over 50 years, the time Alcoa seeks for a new license. Those revenues could multiply if demand for clean power booms or the dams increase their output.
Clean Tech executives did not respond to messages left earlier from the Associated Press seeking comment on its proposed $150 million plan to turn recycled metal into reinforcing bars for building construction and a second $150 million investment in a facility to make silicon. A decision deadline set by Clean Tech two months ago was ignored.
But Alcoa vice president Kevin Anton told the Associated Press that Thursday was a “firm, solid and immovable deadline.”
Alcoa has pressured officials to back down on their relicensing fight, recently sending fliers to Stanly County residents urging them to call and email local officials in support of the jobs-for-license linkage.
Alcoa had two press releases ready to release after Thursday’s deadline, Anton said. One congratulates officials for seeing things the company’s way. “Version two is the county commissioners and the elected officials have left behind a great opportunity,” Anton said.
Officials worry about being blamed for turning away jobs promising to pay about $40,000 to $55,000 a year in an area where unemployment tops 10 percent.
But company promises are a poor payoff for control of hydropower resources that could result in thousands of jobs in coming decades and the freedom to use the river’s water as supplies tighten for the state’s 9.5 million residents, officials said Thursday.
“Alcoa is a multi-national, out-of-state corporation that wants to use North Carolina’s water in order to make money. Gov. Perdue will only support an agreement if it protects North Carolinians by ensuring meaningful job creation, preserving our drinking water and safeguarding our lakes and rivers over the span of the license,” Perdue spokeswoman Chris Mackey said.
Alcoa’s investment in Clean Tech would give the country’s largest aluminum maker a 25 percent ownership in the smaller company, Anton told the Associated Press. Clean Tech was incorporated in August and is led by former Nucor Corp. CEO John Correnti.