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US judge weighs dumping case over Alcoa dams riverbed rights

By Emery P. Dalesio

AP Business Writer

RALEIGH (AP) — A federal judge questioned Thursday whether North Carolina was acting like a “banana republic” with its lawsuit challenging whether Alcoa Inc. owns the riverbed under Yadkin River dams it has operated for as long as a century.

U.S. District Judge Terrence Boyle quizzed lawyers for the state and the aluminum giant in court for an hour as he considered whether to dismiss the case. The lawsuit filed in 2013 challenges whether Alcoa holds clear title to the riverbed that allowed it to build the four dams and perhaps one day sell them.

Boyle asked state attorney Donald Teeter whether the lawsuit sought to punish Alcoa for closing its Stanly County aluminum smelter in 2007 where hundreds once worked.

“Why isn’t this like some banana republic that confiscates property?” Boyle said. “This is really a thinly veiled power grab.”

The dispute is about who will control the Yadkin River’s water flow, billions of dollars of clean hydroelectric power and prospects for future industrial development for the coming decades.

Alcoa’s dams powered an aluminum smelter for most of the 20th century and once employed up to 1,000 workers. Since the plant closed, the company has sold the electricity to commercial customers, collecting more than $175 million in revenues. Alcoa is bidding for a new federal license that would allow it to keep the dam turbines turning for up to 50 more years.

The company began operating the dams during World War I, and the company that started dam construction before that had been urged by North Carolina legislative acts to assemble the land needed for reservoirs behind them, Alcoa attorney Courtland Reichman told Boyle. The company responded by buying land up and down more than 40 miles of the state’s second-largest river system, Reichman said.

Teeter countered that those deeds didn’t include the river bottom.

North Carolina and Alcoa throughout the 20th Century had a cooperative relationship for decades until the smelter’s jobs were lost, Teeter said. Then the company told legislators in 2013 it owned the riverbed outright rather than using it with the state’s consent, Teeter said.

“Why did it take 100 years for some administration or agency to figure it out?” Boyle wondered.

Boyle did not say when he would decide whether the dispute should be hashed out during a trial or dismissed.

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