Wednesday, March 9, 2011 — In “The State of North Carolina’s 21st Century Plan for the Use of The Yadkin River Resources,” created by Gov. Perdue’s Department of Commerce, only once can I find any mention of coordination or cooperation between Alcoa and the state of North Carolina. Winning or losing seems to have become a more central concern of all the parties involved than doing what is best for the Yadkin River and its adjoining land.  

The pro-state takeover folks and the pro-Alcoa relicensing folks are in their respective corners waiting for the bell to ring and the next expensive and exhaustive round to begin. Alcoa seeks to have its four dams relicensed by the Federal Energy Regulatory Commission (FERC) along 38 miles of the Yadkin River flowing from near the I-85 bridge between Lexington and Salisbury to the end of the scenic Falls Reservoir just north of Morrow Mountain State Park.

The electricity generated by the dams is often sold at a premium to different regions of the U.S. because Alcoa’s electricity is not regulated by the state. Alcoa does realize net profits of over $13 million each year and some anti-Alcoa lobbyists claim that the yearly net profit is closer to $35 million. The state, through the governor’s office, seeks to capture the license for the four Alcoa dams and take over their control and operation insisting that they will be better stewards for the Yadkin basin.

Neither “North Carolina’s 21st Century Plan” for the Yadkin River nor Alcoa’s current relicensing bid is in the best interest of the river. Both options are deeply flawed because they do not address a key concern: how to protect and preserve the natural state of roughly 16,000 significant acres of Alcoa’s land bordering and protecting the Yadkin.

The Department of Environmental and Natural Resources (DENR), without the previous guidance of former head Bill Ross, has backed away from its earlier role of fostering cooperation and coordination on behalf of both land and water protection along the Yadkin River.  Bill Ross, DENR and the Land Trust for Central N.C. had previously negotiated as part of Alcoa’s Relicensing Settlement Agreement (RSA) the protection of 6,000 pristine and historically significant acres along the Yadkin River. As part of that important agreement Alcoa agreed to gift over 1,000 acres of extremely important land to Morrow Mt. State Park, which included the Falls Reservoir property adjoining the state park and the archeological gold mine recognized as the Hardaway Paleo-Indian site near the Narrows Dam in Badin. One should assume that if the state does capture Alcoa’s dams that any long term land preservation plans between the state and Alcoa will prove extremely difficult.  Even the existing very important and sensitive land agreements from the RSA will be in grave danger since Alcoa’s land holdings are technically outside of the purview of the Yadkin Project and therefore not subject to FERC authority or “recapture” opportunities.  

For the state’s plan to have real merit for the long term environmental benefit of the Yadkin basin it must address not only how the state can take possession of Alcoa’s dams, but also how it can successfully negotiate for the purchase and preservation of thousands of acres of Alcoa’s riverside, uplands and ridgeline properties along the river.  

Any long term solution by the state that includes only the dams and the water without fully addressing the adjoining lands will prove to be a huge mistake, as development of these lands could significantly increase the stresses and challenges to the water quality that the state ostensibly is seeking to improve.    

However it is done, the cost will be significant. Estimates for capturing the dams alone run from well below their tax value of $176 million to more than $500 million. Another $194.5 million may be needed for necessary improvements of the dams. We must add to those figures around $50 million if the state is to purchase a minimum of only 10,000 acres of Alcoa-owned land adjoining the river.  Realistically, then North Carolina’s total expense for the Yadkin Project, including the land that needs to be preserved, could exceed $500 million.                      

Approval for that amount of money in this ongoing recession and with a new Republican legislature in Raleigh will prove very difficult. The state will also have to obtain legislative approval from the new U.S. Congress to direct FERC to accept the state as the new licensed operator for the Yadkin Project.  Such a dramatic change (capture/recapture of the license) has never previously been granted by FERC, and it is hard to imagine that this new Congress will be the first ever to take a hydroelectric operation from a private corporation and give it to a state government to run, Alcoa’s admittedly poor environmental record notwithstanding.   

On the other side with many strange twists, turns and apparent deceptions, we have Alcoa seeking a new license for their four dams. Yet to get that license they must obtain from the state a new 401 Water Quality Certification.  DENR in early December revoked Alcoa’s water certification because internal Alcoa emails indicated problems still exist with the proper levels of dissolved oxygen.  

Surprisingly, DENR this fall reduced their request for an Alcoa $240 million surety bond down to $80 million to insure that Alcoa will complete all the necessary improvements to the hydroelectric dams and especially “to modernize the facilities and to improve dissolved oxygen levels in the discharge of the dams.”  

For several years Alcoa’s opponents have shown that Alcoa has been responsible for significant pollution in the Yadkin River and responsible for ground water contamination around its Badin aluminum smelting plant that operated for more than 90 years. However, every problem in the Yadkin River and the reservoirs are not necessarily an indication of illegal pollution and cover-up by Alcoa.

While there is no doubt that the aluminum smelting plant created health risks to many employees and the plant’s dumping put significant toxins into the river, the fact is that every other manufacturer, mill, farm, town and city along the Yadkin has also dumped huge amounts of toxic substances into river for many, many decades. Unfortunately, the Yadkin River was the proverbial sewer system of the 20th century industrial manufacturing culture and economy that dominated the piedmont region of North Carolina for several generations. There are few towns in all of the Yadkin and Pee Dee Basin that can’t attribute some significant portion of their growth in the last century with a few key industrial manufacturers that were located alongside the Yadkin or an adjoining tributary. In an older N.C., when the population was less than half our current size, citizens generally had an insufficient understanding of the science of pollution. In that different era it was understandable that many factories and cities found it convenient to just dump their wastes in the river to float downstream.

It was not until the mid-1970s that any significant anti-pollution laws and regulations were written, and even now there remains significant reluctance on the part of federal and state agencies to properly enforce environmental regulations along the Yadkin.

Meanwhile, Alcoa has adequate funds at its disposal to do all the necessary pollution clean-up created by the now-defunct Badin plant. Alcoa needs to sufficiently modernize their dams so that toxic oil will not leak from the hydroelectric generators and dissolved oxygen problems will be corrected. Alcoa is in a far better position to pay for these necessary improvements than the state of N.C., which does not now or in the foreseeable future have sufficient funds to take over, clean-up, up-grade and properly run the Yadkin dams. Even if the state did scrape together the operational funds, it could continue to ignore the essential need to preserve the land along the Yadkin River.

With all of these obstacles, it is time to acknowledge the need for cooperation among the major players for the protection of the Yadkin River and its adjoining land.  Winning is not all that it is cracked up to be, especially since winning for the state of N.C. could mean the loss and eventual development of Alcoa’s approximately 16,000 acres of natural land along the Yadkin as well as environmental degradation of the river’s water quality due to development. There must be a new way forward with both sides re-committed to the long term protection of the Yadkin River basin.  

As it stands, the possibility for sufficient cooperation appears unlikely; however, only through such a process will the Yadkin River and its land be protected. As a first step towards cooperation I urge the General Assembly and the newly created Uwharrie Regional Resources Commission to consider how the land along the Yadkin can be protected.

The following are a few rough suggestions for such cooperation between Alcoa and the state of NC:

1.  Alcoa needs to do all that is necessary to locate and clean-up its pollution in a timely manner.  

2.  Alcoa needs to modernize its dams to insure proper levels of dissolved oxygen.  

3.  Alcoa needs to sufficiently address the leakage of oil and other toxins from its generators so that they are not released into the water. Alcoa needs to post a more realistic surety bond, maybe the originally discussed $240 million, to insure their full compliance of 1, 2, and 3.  

4.  Alcoa should make clear that any new FERC license “gives N.C. the authority to regulate water use within the Yadkin River, including the right to issue new water withdrawal permits (at no charge).” In other words Alcoa needs to clarify that it does not own the water in the Yadkin River nor in its reservoirs and cannot profit from old or new state approved water withdrawal for purposes of meeting critical economic development or growth needs from municipalities within the watershed.

5.  Because of the significant loss of jobs due to the closing of the Badin Works plant, Alcoa should consider some system of providing additional funds for the region.  Maybe a small percentage of its yearly profits could be directed for business, economic and jobs development in the region – possibly through annual grants to community colleges located in each of the counties adjoining the Project. Or perhaps Alcoa could provide discounted electricity to the region to attract new business such that new jobs could be created in a significant number.  The state of N.C. and Stanly County have made a very compelling case that these waters need to help us provide jobs for the citizens of the region, and Alcoa can and should meet this challenge with tangible proposals for how they will use the waters of the Yadkin to create jobs now and for the entire term of the license.

6. While the current Relicensing Settlement Agreement already provides for more than 1,000 acres of land protection including the wonderful gift to Morrow Mt. State Park of Alcoa’s Falls Reservoir property around to the Hardaway site, Alcoa should consider a new generous gift to the state (rather than sale as in the RSA) of the remaining 2,310 acres around High Rock Lake and the 2,420 acres along Tuckertown Lake. It would also be very significant and important for land preservation along the Yadkin if Alcoa agreed to work actively with The Land Trust for Central N.C. and the state of N.C. to create a long-term preservation plan by gift and purchase for Alcoa’s remaining approximately 10,000 acres along the Yadkin River.

7. DENR and the EPA should become more active, aggressive and diligent in their oversight of the Yadkin River. They need to insure that Alcoa and manufacturers, farms and cities along the Yadkin River are in full compliance with all water quality regulations and laws.

8. The state of N.C. should with sufficient laws and regulations make it clear that all water in the river systems of N.C. belongs to the people of N.C. Alcoa, Duke Energy, Progress Energy and all other N.C. businesses should understand that the state of N.C. has the full authority to regulate water usage in all of N.C.’s river basins, including the right to issue new water withdrawal permits. The water in all of N.C. river basins belongs to the people of N.C. and is not a commodity to be sold by any business or corporation in the state.

9. The state of N.C. should, under the conditions similar to those above, or far more likely under more refined conditions for cooperation agreed to by the Uwharrie Regional Resources Commission and Alcoa, support a 40 year relicensing of Alcoa’s four dams along the Yadkin River. Fifty years is too long, however, since the current process has already taken nearly a decade, any amount of time less than this would not provide enough time to reclaim the investments necessary to realize all the benefits of the RSA (new public swim areas, fishing piers for the public, upgrades to existing facilities, upgrades to the dams themselves, upgrades for an expected future “smart grid” which will limit electricity losses in the lines distributing electricity, etc.)

10. It would prove helpful if Bill Ross, or perhaps someone from DENR who was very familiar with the initial important land conservation agreements in the RSA, could become both an advisor and negotiator for the Uwharrie Regional Resources Commission. Such a person will be needed to help facilitate cooperation and coordination so that the land and the water along the Yadkin River are fully protected.

John D. Young moved to Albemarle, down the road from Morrow Mt. State Park, with his wife in the summer 2009. His provides the following background information: I was active for more than 34 years in a family retail furniture store in High Point – Young’s Furniture & Rug Co. that closed in 2002. When I moved from Greensboro I was chair of the Guilford County Open Space Committee. I had also been active with the expansion of the Haw River State Park. I was drawn to this very scenic area of the state for my retirement to hike its many trails and fish in its lakes. I am a strong believer that ecotourism and tourism associated with the culture and history of the region have a great potential. I have been active at New Garden Friends Meeting in Greensboro over many years and I am a former clerk of that Quaker meeting. I have found that cooperation and reconciliation is often the best path.