By James Romoser
JOURNAL RALEIGH BUREAU
Published: August 8, 2009
RALEIGH – A debate over the environment, the economy and the control of the water in the Yadkin River culminated in a late-night vote in the N.C. House of Representatives that dealt a blow to Gov. Bev Perdue’s administration in its fight over hydroelectric dams controlled by Alcoa Inc.
The House voted Thursday night against a bill that would have set up a “Yadkin River Trust,” a state corporation that the state hoped to use to take control of the four hydroelectric dams and reservoirs along a 38-mile section of the Yadkin. One of the sites is High Rock Lake in Davidson County.
Without the trust, the state will likely have a tougher time persuading a federal regulatory agency not to renew Alcoa’s license to operate the dams.
“From our perspective, it certainly sends a signal that the state is not going to be in a situation where it can be a competitor for the license,” said Gene Ellis, a spokesman for Alcoa, which is one of the world’s largest producers of aluminum.
In 1958, Alcoa was given a 50-year license to operate the dams. At the time, the company used them to generate electricity for its smelting plant in Stanly County, which provided about 1,000 jobs.
But the plant has shut down, and Alcoa now sells the hydroelectric power for a profit. It is currently asking the Federal Energy Regulatory Commission for a new long-term license.
State officials say they believe that because Alcoa no longer provides jobs and because the water of the Yadkin is a critical public resource, Alcoa should not get a new license. In April, Perdue intervened in the federal re-licensing process.
The state wants to “recapture” the license and take control of the dams, which it says can be used for the public good and can generate revenue for the state. Alcoa says that would be an unwelcome government takeover of private property and would set an awful precedent.
It’s up to the federal commission, known as FERC, to decide the fate of the license. But the General Assembly also became heavily involved this year because of the Yadkin River Trust bill.
If the legislature had approved the creation of the trust, it would have aided the state’s case before FERC. Without the trust, the state does not have any clear mechanism that it could use to take control of the dams.
The bill advanced swiftly through the N.C. Senate, but it got held up in the House, where many members were wary of the idea.
On Thursday night, at the end of a long session, the bill finally came to the House floor as part of a flurry of legislative business that legislators were scrambling to finish by early next week, when they expect to adjourn for the year.
The bill was defeated 39-66. A significant number of both Democrats and Republicans opposed the bill.
“This is an unfortunate outcome, because what we were trying to do was have a vehicle to make our case before FERC,” said J. Keith Crisco, the state’s secretary of commerce. “We will proceed without this, and we’ll have a strong case without it.”
Before being appointed commerce secretary by Perdue, Crisco was the president of an organization known as the N.C. Water Rights Committee, which advocated for public ownership of the Yadkin dams and reservoirs.
Now, as secretary, Crisco has continued to fight against Alcoa’s bid to get a new license. Crisco said that the water of the Yadkin is both a precious environmental resource and a crucial engine for economic development in central North Carolina.
If the state were to take control of the hydroelectric facilities, it would have to compensate Alcoa.
The two sides disagree on how much that would cost because there is a dispute about how the market value should be calculated.
Alcoa says that it could cost the state up to $500 million.
Legislators who sponsored the Yadkin River Trust bill said that estimate is substantially inflated.
■ James Romoser can be reached at 919-210-6794 or at jromoser@wsjournal.com.
