My Turn: Why public needs to control Yadkin

Published 12:00 am Sunday, April 15, 2012

By Robert F. Orr
As candidates campaign across the state this year, the inevitable common theme of jobs and economic development will repeatedly be trumpeted. The key to North Carolina’s future rests with our ability to attract, maintain and expand businesses. Two major resources upon which the success of these efforts depends are water and power.
It is the confluence of these two resources and who controls and manages them that lies at the heart of the controversy concerning the Yadkin River Hydroelectric Project and Alcoa, a multinational conglomerate.
Alcoa seeks to get the Federal Energy Regulatory Commission (FERC) to grant it a new 50-year license to operate hydroelectric facilities on a 38-mile stretch of the Yadkin River, primarily in Stanly County. This operation, which has been in Alcoa’s hands for nearly 100 years and licensed by the FERC to Alcoa for 50 years, was originally used to provide cheap electricity for the Alcoa aluminum plant near Badin. Now all has changed.
First, the plant has been effectively shuttered and closed for several years and the touted thousand jobs eliminated or shipped overseas. Issues have arisen about the environmental impact of this operation, the public health consequences, and what can and should be done about them.
However, what is directly at issue is the fact that the original 50-year license has expired and Alcoa has no automatic right to have it renewed. Alcoa has applied for renewal and various public and private groups have appropriately opposed the relicensing which is still pending before the FERC. A necessary water-quality permit that the state must grant in order for any new license to be issued has been tied up in litigation and controversy. Currently, Alcoa operates the hydroelectric facilities on a year-to-year basis, selling the electricity generated to the wholesale market and reaping millions in revenue that come from that sale.
The broader policy and legal issues surrounding this controversy hinge on the fundamental question of the public’s right to control, and have access over, the navigable course of the Yadkin River and its basin. This enormous resource flows from the mountains of northwest North Carolina through the heart of the Triad, surrounded by a crescent of the metropolitan Charlotte area and the Triangle, into the Uwharrie region and on into South Carolina to the Atlantic Ocean.
From the water to support communities and businesses to the electric power generated by its flow, the Yadkin River Basin has huge potential to transform and serve the fast-growing population and economic needs of our state. To relinquish control of those resources to Alcoa for another half century is bad public policy. To do so places in jeopardy the ability of the state and local governments to properly utilize the power generated and the abundant drinking water supply for economic development and community growth.
While Alcoa chooses to frame the issue in the context of some kind of “taking” by government authorities, opponents contend that the real question is whether the public interest and the public good will best be served by not allowing this particular multinational corporation to unilaterally control and profit from these resources. Clearly, no governmental entity wants to “take” what Alcoa has left — a vacant aluminum manufacturing facility and hazardous waste residue from nearly a hundred years of operation. And certainly there can be no question of taking Alcoa’s license — it’s expired.
The license to operate the hydroelectric facilities is available for other entities to obtain, subject to FERC approval that the new entity or entities would best serve the public’s interest. This new licensee could conceivably be a new private corporation in the actual energy business or a regulated utility company, either of which should work closely with or in actual partnership with a state or regional government authority.
As for Alcoa’s investment in the physical structure of the dams and other improvements for the hydroelectric operation, no one would “take” them from Alcoa. If a new licensee emerges, then adequate means exists to see that Alcoa is adequately compensated for those structures that it has constructed.
The successful economic development of this region in the future requires a new long-range strategy that protects these resources for generations to come. Another 50-year lease for Alcoa is not the answer.
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Former state Supreme Court justice Robert F. Orr is now with the law firm of PoynerSpruill, LLC, which represents a private party in Stanly County opposed to renewal of the Alcoa license.
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