Point of View

Alcoa and the question of who owns North Carolina's water

May 12, 2013 



For the past six years, a battle has been fought on behalf of the state’s residents by stalwart souls in Stanly County and beyond.

In one way, the fight has been about re-licensing four dams that generate electricity on the Yadkin River. But it’s really about more than that. It’s about jobs provided by an important revenue stream during a period of severe economic austerity in this state. It’s about economic abandonment of an asset by a major corporation in a depressed economic area. It’s about a question that is fundamental to all of us: Who owns our water and our riverbeds?

Alcoa owns an abandoned aluminum plant in Stanly County. It shuttered the smelter in 2002 and closed its last operation there in 2007. The dams on the Yadkin were built decades ago to provide a cheap source of power for the smelter. Alcoa recovered its costs long ago.

During and especially after closure of the plant, Alcoa has enjoyed an immense income stream from the power generated, by some estimates as high as $40 million per year. This is clean, renewable energy that is sent wherever it will enjoy the highest price; frequently this means wheeling the power out of state so that all economic benefit of our resource is drained out of state.

The battle started in 2007 when Alcoa applied for a 50-year renewal of its license to operate the plant. Completion of the renewal would mean that Alcoa would continue to use the Yadkin River to derive revenues from the sale of hydro-electricity, which will no doubt only grow in the coming years and decades as energy costs increase. However, a license renewal means much more than that.

It means that Alcoa would control access to the river and millions of gallons of water flow every minute of every day of every year.

Under the license, Alcoa can do whatever it wants with the water.

Water, as we know, has gone from being the earth’s most common resource to one of its most precious and bitterly contested. In fact, the value of the water flow in the coming years no doubt will exceed the value of the electricity. This means that Alcoa, rather than generating electricity, could siphon off the water flow in this great river and sell it, thereby denying our residents of enjoyment and critical access to the water for drinking supplies and other uses.

Says Keith Crisco, North Carolina’s outgoing Secretary of Commerce: “Everybody’s done a good job of making this a complicated issue, but to me it’s pretty basic: There’s an economic asset there, and it’s our job today to get the best value for the people of North Carolina.”

The contract with Alcoa, and the laws surrounding it, allow the state to recover the dams – if recovery will better serve the public interest. What is important to recognize is that we are talking about who will retain control of an increasingly critical asset – and about the crucial question of who owns the riverbed itself.

That’s the one issue the state must determine before re-licensing goes a step further: Does the state (and the people) own the Yadkin Riverbed or Alcoa? Without ownership of the riverbed, Alcoa cannot generate power under federal energy law.

Currently, the state Department of Environment and Natural Resources is considering Alcoa’s request for a 401 Water Quality Certificate, a prerequisite to the Federal Energy Regulatory Commission’s renewing Alcoa’s license. Let us hope DENR denies the certificate in order to protect the rights and resources of the people of North Carolina.

Some complain that we should grant the license because denying a hydro plant relicensing has never been done. I say this sounds like a good time to start. Since when is “we’ve always done it that way” a good excuse for anything. It’s a new day in terms of critical resources, revenues and fundamental rights in this wonderful state.

Let’s keep this water right and its benefits for our citizens.

John Robbins of Concord is president of Greathorn Properties, Inc. and vice chair of the N.C. Wildlife Federation.

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