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July 10, 2009

Alcoa’s position on Yadkin River Trust

Anonymous The Stanly News & Press Fri Jul 10, 2009, 09:56 AM EDT

Thursday, July 9, 2009 — On Tuesday afternoon at the North Carolina General Assembly, Alcoa spokesman Gene Ellis spoke before the NC House Water Resources Committee, which is one of three House committees currently considering Senate Bill 967.

That legislation supports creation of the Yadkin River Trust, which would challenge Alcoa Power Generating, Inc. (APGI) for a 50-year license to operate the dams of the Yadkin Hydroelectric Project and has the support of Gov. Bev Perdue.

Ellis, a North Carolina native and Stanly County resident for more than 30 years, has been working for the past seven years on the relicensing of the Yadkin Hydroelectric Project.

“I have to tell you, I never thought I’d see the day when the State of North Carolina contemplated taking over a private business,” Ellis said.

“And that’s exactly what this State Trust bill is — the taking of a privately-owned business that Alcoa started here in 1915.”

Ellis put the cost to North Carolina at $500 million should a takeover occur.

“Some people say this bill doesn’t really do anything — it just puts a structure in place to operate the Yadkin Project if a takeover happens. But a vote to create a Yadkin River Trust is a clear indication that the General Assembly supports a government takeover despite the cost. If this bill becomes law, it will be possible for the state to pursue a government takeover,” Ellis said.

Ellis spoke to the issue of control of the water of the Yadkin River, saying: “We don’t claim to own the water... Granting Alcoa a new federal license for the Yadkin Project will not change the state of North Carolina’s ability in any way to control withdrawals of water.”

Despite believing “that we don’t believe a government takeover is possible,” Ellis estimated the cost to the state at $500 million should that occur. That total came from Alcoa’s estimated net investment of $91 million plus severance damages that Ellis said “would add hundreds of millions” to the price tag. Then, there’s $200 million of required upgrades to dams, generators and turbines that have Alcoa projecting negative cash flow for the next several years.

Addressing the idea of the state taking private property, Ellis said a survey paid for by Alcoa showed 81 percent of North Carolinians opposed o a state using taxpayer money to take over a privately-owned business while 63 percent oppose the government getting in the power business.

As to the environmental issues raised by supporters of a Yadkin River Trust, Ellis said, “The truth is, we take full responsibility for our waste sites. We’ve already spent more than $10 million on remediation efforts and have followed the direction of the state.

“If there is any evidence that Alcoa needs to be doing more to clean up these waste sites, then the state of North Carolina already has the full authority to require additional steps. Taking over the Yadkin Project won’t add to the control the state already has.”

As to the huge job losses and closure of the Alcoa smeltering plant, Ellis said, “No hydro business in America is required to support a certain number of jobs in order to receive or maintain a license.”

In his closing to the committee, Ellis said, “At the end of the day, this bill is not about protecting North Carolina’s control of the water. It is not about protecting the environment. It is not about economic development. It is about taking private property. It is about a dangerous precedent that threatens North Carolina’s business climate. It is about the $500 million burden to North Carolina taxpayers.”