COALITION OF CITIZENS, POLITICIANS AND ENVIRONMENTALISTS BATTLE ALCOA TO RETURN THE YADKIN RIVER TO THE PEOPLE
Alcoa shuttered its Badin Works aluminum smelting plant in 2002, laying off more than 300 workers. (photos by Gerald W. Poplin)
The growing environmental and economic development issue facing the citizens of Stanly County and the 25 others that comprise the Yadkin River Basin is echoed in the words of former President Theodore Roosevelt.
“The conservation of our natural resources and their proper use constitute the fundamental problem which underlies almost every other problem of our national life,” Roosevelt told Congress in 1907.
Dean Naujoks, the Yadkin Riverkeeper, cited the conservation movement of the early 20th century as a source of inspiration for the coalition of citizens, politicians and environmentalists who vigorously oppose Alcoa’s efforts to seize another 50 years of control over water rights along the 38-mile stretch of the river. The span of flowing water passes through Davie, Davidson, Rowan, Montgomery and Stanly counties and encompasses four hydroelectric dams at the High Rock, Tuckertown, Narrows and Falls reservoirs.
In a memo regarding Alcoa’s bid to win another 50-year license from the Federal Energy Regulatory Commission, or FERC, Naujoks referred to Teddy Roosevelt’s well known opposition to corporate monopolies and his firm belief the nation’s natural resources belong to the people. Naujoks cited Roosevelt’s philosophy to highlight the disparity between the legendary president’s philosophy and
FERC’s policies. The federal agency “has never denied a FERC permit and exercised ‘recapture’ provisions on behalf of the public interest since permits were first issued in the 1920s under the Federal Power Act,” Naujoks stated.
North Carolina hopes to become the first state in the union to snap that streak. Gov. Beverly Perdue officially came on board with the Yadkin River Coalition — a group of local businessmen, citizens and politicians who oppose Alcoa’s re-licensing efforts — last September and her influence has proved invaluable to the cause.
The governor’s office filed papers with the FERC “seeking return of the right to plan the use of the Yadkin River flows and the Yadkin hydroelectric project for the benefit of the people of North Carolina,” according to a press release.
Recapturing the water rights to the Yadkin is essential to the health and well being of the citizens of the nearly 25 counties that comprise the Yadkin River Basin, Perdue stated.
“Given the Yadkin River’s broad impact on the state, we believe strongly that the state is the most appropriate body to plan use of this invaluable natural resource, to help assure the region’s municipal water supply and quality and to facilitate future growth and development,” Perdue stated.
BEGINNINGS OF A COALITION
Gov. Perdue’s intervention has helped thrust the battle over the Yadkin into the media spotlight. The movement started quietly more than 10 years ago. In the late 1990s, local banker Roger Dick began carefully studying the agreement struck between Alcoa and FERC. Dick, the president of Uwharrie Capital Corporation, had joined with other area businessmen to develop a long-range economic development plan for Stanly County. Dick said he quickly realized the county was being denied the economic benefit of its greatest natural resource — the Yadkin River.
The Badin Works aluminum smelting plant did bring 1,000 jobs to the area after Alcoa applied for its water rights license in 1958. But Alcoa, a multi-billion dollar corporation and the world’s largest producer of aluminum, ceased operations at the plant in 2007. The plant employed only 377 people when it shut down, said Alcoa spokesman Gene Ellis.
As Dick researched the histories of energy cooperatives such as the Santee Cooper Electrical Authority and the Tennessee Valley Authority, he discovered a connection between public ownership of natural resources and a region’s overall economic vitality.
“Some of the poorest counties in our state are the richest in terms of this commodity called water, so why would you let it get away from you?” Dick asked.
That simple question led Dick and a contingent
from Stanly County to take their case to the NC General Assembly. One of the first legislators to take their side was NC Sen. Fletcher L. Hartsell Jr., who represents Cabarrus and Iredell counties.
Hartsell came on board with the Yadkin River Coalition two years ago after meeting with Dick, Jim Nance, a former board member of the NC Department of Transportation, and Stanly County Commissioner Lindsey Dunevant at his legislative offices in Raleigh.
Hartsell, a lawyer, admits he was a bit skeptical at first. But after he studied the Federal Power Act, he became fascinated with the issue of Alcoa attempting to maintain its monopoly over the 38-mile stretch of the Yadkin. Convinced of the appropriateness of the coalition’s cause, Hartsell signed on and recruited fellow Republican state senator, Stan Bingham.
“As far as I’m concerned, Alcoa got the gold mine and we got the shaft,” Bingham said.
Bingham cited the town of Denton, population 1,450, as a perfect example of how Alcoa is reaping all the benefits of the Yadkin without sharing that boon with the North Carolinians who reside in the Yadkin River Basin.
“The little town of Denton is having to pay [Alcoa] for the use of the water coming down the Yadkin for drinking,” Bingham said. “The way that’s calculated is they charge because it’s a loss of power generation…. This whole thing was done many, many years ago, and a lot of people didn’t think about the people they were dealing with at the time.”
Hartsell and Bingham made a push last year to educate their colleagues in the NC Senate about what they characterized as the economic injustice of Alcoa’s effort to re-license the water rights for another 50 years. Their efforts resulted in a bill that would transfer ownership of the Yadkin Hydroelectric Project to the Yadkin River Trust in the event FERC denied Alcoa’s re-licensing application.
A LEGISLATIVE BATTLE
Senate Bill 967, or the Yadkin River Trust bill, was introduced by Hartsell last March and co-sponsored by Bingham, along with state senators Tony Rand, Phil Berger, Dan Clodfelter, William Purcell and Jerry Tillman. It cleared the Senate in May by a vote of 44 to 4.
“It was a totally bipartisan group in the original filing,” Hartsell said.
The passage of SB 967 represented a victory for the people of North Carolina, Naujoks said. The bill received overwhelming support in the NC Senate because it stipulated that hydroelectric power funds “could provide millions annually for riparian buffer protection, upgrades for aging sewage treatment plants and funding for innovative stormwater pollution,” Naujoks said.
“It [would’ve] created green jobs and generate[d] critical funding needed for all Yadkin River Basin municipalities facing pending water quality mandates required for the High Rock Lake [Clean Water Act] requirements,” Naujoks continued.
However, the House version of the bill, HB 1455, failed to pass after Alcoa mounted an anti-propertyrights campaign, Hartsell said.
When the bill reached the House in July, it had to go through three committees as the legislature’s summer session was winding to a close.
“It didn’t get started moving until early July,” Hartsell said. “It had to move pretty quickly. We got it through two committees, and it went to the floor just days before the end of the session, but we didn’t have enough time to explain a very simple, yet very complex circumstance to 120 people.”
The bill failed to pass by a 2-to-1 margin. Hartsell said the property rights rhetoric perpetuated by Alcoa’s lobbyists got traction in the House, which determined the bill’s fate. However, Alcoa’s property-rights argument is based on a false assumption, he added.
“Alcoa and others keep talking about it being a ‘taking’ [of property],” Hartsell said. “It’s not a taking; it’s not even close to it. All we’re asking Alcoa to do is to fulfill the obligations that were identified in 1958 that they agreed to.”
“They acknowledged when the license was up, they no longer had the right to use the property,” Hartsell explained. “We’re saying there needs to be an equivalency for the run of our river, and when I say ‘our,’ I mean everybody’s. It’s not a private entity. The feds and the state have had control of the run of the rivers since the beginning of the republic.”
The language of the Federal Power Act includes a stipulation that the controlling entity, in this case Alcoa, must estimate the recapture value of the resource in the event it must surrender the rights to that resource, Hartsell said.
“There is a statutory formula for how you calculate recapture and Alcoa computed it to be $24.2 million in 2006,” Hartsell said.
Therefore, if the FERC denies Alcoa’s application and returns the water rights to the people, the state of North Carolina will have to compensate Alcoa $24. 2 million for its four hydroelectric dams and related infrastructure, Hartsell said.
Despite last summer’s legislative defeat, the Yadkin River Coalition is now backing HB 1099, that passed during the most recent legislative session.
The entrance to the Narrow’s Dam on the Yadkin River. The dam is one of four on a 38-mile stretch of the river built by Alcoa. The Sediment Control Plan sign posted by the NC Department of Environment and Natural Resources includes the disclaimer “with performance reservations.”
“We put the Yadkin River Trust Bill into that bill, and that bill’s in conference between the House and the Senate and will be put into consideration once we reconvene in May,” Hartsell said. “Frankly, it would be nice to put this into a one-page, very clear expression of what we’re trying to accomplish.”
The bill clearly outlines the three primary issues at stake — A) who controls the waters of the Yadkin for the next 50 years; B) the environmental issue related to the condition or quality of the water itself and the immediate environs; and C) the use of the electricity generated by the run of the river.
“It’s far from being dead, and I’m beginning to feel good about this,” Bingham said. “Politics can be up and down but I think a lot of the facts are finally going to come forward.”
From an economic fairness standpoint, the General Assembly’s and FERC’s decision should be easy to make, said Hartsell.
“[Alcoa] signed an agreement. We’re just asking them to live up to their own word,” he said. “The state of North Carolina intervened 50 years ago on Alcoa’s behalf to assist them to get a 50-year license and operate the plant at Badin, but conditions have changed dramatically. If they’re going to use it, what is the return to the people of the state on the state’s investment in the raw material, which is the water? That water is owned by the people.”
Alcoa’s re-licensing application represents “the mother of all incentives,” Hartsell said.
“They want the state to concede they should have $1 billion in benefit over the next 50 years and provide nothing to the state,” he said. “I’m a Republican for heaven’s sake and I’ve supported incentives but this is ridiculous.”
“Why should we give it away?” Hartsell continued. “From an economic development perspective, energy is the major issue associated with job growth and development regardless of the industry.”
Bingham characterized Alcoa’s stewardship of the Yadkin in much harsher terms. He pointed out that Alcoa is capitalizing on the hydroelectric energy generated by the Yadkin by selling electricity “on the grid” rather than investing in the local communities.
“We’re dealing with John Dillinger and Al Capone,” Bingham said. “Alcoa reaps [millions] in profits each year and North Carolina gets zilch.”
A TOXIC LEGACY?
An environmental study commissioned by Stanly County and conducted by professor John Rodgers of Clemson University last year established a connection between contami nation of polychlorinated biphenyls, or PCBs, in fish and soil samples taken from Badin Lake near Alcoa’s Badin Works operation.
Rodgers’ findings led the Yadkin River Coalition to appeal the waterquality certification issued by the NC Department of Environment and Natural Resources, or DENR. Administrative Law Judge Joe Webster granted an injunction on May 26 prohibiting DENR from issuing a 401 Water Quality Certification to Alcoa until the full appeal is heard.
The state issued a fish-consumption advisory for Badin Lake between Stanly and Montgomery counties last February due to elevated levels of PCBs found in largemouth bass and catfish. Alcoa attempted to block the advisory by filing a legal appeal. The company claimed that the state “changed its stated evaluation criteria after the study was complete and held Badin Lake to a different standard than the other lakes and rivers in North Carolina,” according to a posting on a company website.
Despite Alcoa’s claims, the state implemented the fish-consumption advisory that currently remains in effect.
PCBs can cause anemia; acne-like skin conditions; damage to the liver, stomach or thyroid gland; changes in the immune system or reproductive system; and behavioral problems, according to the NC Department of Health and Human Services.
Bingham said Alcoa’s objection to the posting of the fish-consumption advisory speaks volumes about their concern for the people who swim and fish at Badin Lake.
“It just tells me how they do business,” Bingham said. “They fought the fish-advisory signs; they say we’re taking their property and we have no rights to the water. We’re stuck with the bastards, at least for the moment, but I feel good about the direction of the fight we’re taking on in the future.”
Naujoks said he’s concerned about the high concentration of PCBs in the landfills and dumping sites near Alcoa’s four hydroelectric dams. Naujoks said Alcoa has not been entirely forthcoming about the number of waste dumping sites in and around their facilities.
“Alcoa knows they can’t hide these dumping sites,” Naujoks said. “They’re going around pointing out the buried bodies that they want us to find. They’re not showing us where all the buried bodies are found. As we start digging down through the layers, we’re going to find much more.”
If FERC denies Alcoa’s application, HB 1099 would implement enforcement of environmental cleanup requirements against Alcoa where 47 hazardous waste sites have been identified as well as PCB contamination in Badin Lake swimming areas, Naujoks said. The bill would also transfer control of the Yadkin River lakes and dams from Alcoa to the Yadkin River Trust, support efforts to return proceeds from the production of hydro power electricity to the Yadkin River Basin to protect water quality, clean up environmental contamination and fund other projects in the public interest within the basin, Naujoks said.
“The Trust will use a portion of the proceeds from power generation to create a Yadkin River Basin Clean Water Trust Fund to acquire land for water-quality improvements, innovative storm-water strategies, state-ofthe-art wastewater improvements and aquatic habitat improvements,” he added.
Additionally, Naujoks said he’s interested in making sure there is an equally important campaign push to ensure proper implementation of the legislation regarding environmental clean up and to leverage as much funding as possible from hydro power profits, which could generate more than $44 million a year, to ensure a dedicated source of funding for comprehensive basinwide water quality improvements throughout the Yadkin/ Pee Dee River Basin.
The Yadkin River Coalition’s challenge of NC DENR’s water quality certification is scheduled to go to mediation next month. But Naujoks strongly believes the matter will have to go before a judge.
“We’re going to court and I’m very confident we’re going to win because the law is on our side,” he said.
Naujoks said Alcoa’s legacy will be a toxic one and the state should brace itself for a long legal battle to force the aluminum-maker to clean up the toxic waste sites it will leave behind.
“We’ll be fighting them for decades to clean this up,” Naujoks said. “It’s just wrong. It’s morally wrong. I’m just glad we have some pretty powerful people on our side like the governor and Stanly County.”
A PROMISING FUTURE
Bingham said once Perdue joined the Yadkin River Coalition, it changed everything.
“It’s been wonderful; it’s been extremely important,” he said. “We were facing a multi-billion-dollar corporation, but when the governor lis tened to our pleas, they began to take this extremely seriously. They realized they’re in for a fight.”
Gene Ellis said the governor’s filing with the FERC is not timely and that before the state could be granted the license, the federal government would have to take it over.
“The governor doesn’t really have the opportunity for the takeover that’s being proposed,” he said. “There’s nothing in the Federal Power Act or the commission’s regulations that allow for a state to take over a project once the federal government has taken it over.”
Despite the federal government’s regulations, Bingham said the coalition will never quit until the Yadkin River is returned to the people of North Carolina.
“We’re not going to roll over and play dead, I can tell you that much,” he said.
For his part, Naujoks said the Yadkin Riverkeeper will continue to focus on the advocacy, media and legal campaign, while generating support and participation in the coalition and educating the public about the benefits of the legislation.
“Our legal case could take years to resolve, but the campaign to support the legislation through the coalition and FERC re-licensing could be decided within the next year,” he said. “We will work on a targeted campaign to unify and strengthen grassroots efforts of local governments, public interest organizations, businesses and individuals to reclaim the waters of the Yadkin River to benefit the public interest.”
Bingham said he can see a day in the near future when the Yadkin is returned to the people and the economy of the 25 counties in the Yadkin River Basin begin to flourish.
“We can offer industry power at a reduced rate and that plays a big part in manufacturing,” he said. “That would be a tremendous incentive. For years, we’ve stood by the sidelines and watched industries go elsewhere. We don’t have anything to offer industry. Our greatest resource is just flowing down the river and the dollars are being exported, which doesn’t do anything for us.”
The NC Department of Health and Human Services issued a fish-consumption advisory last February on Badin Lake after high levels of PCBs were found in fish tissue samples. Alcoa unsuccessfully filed a legal challenge to the advisory last April. The advisory remains in effect.
Alcoa, the world’s largest producer of aluminum, is hoping to win its relicensing effort to seize another 50 years of control over the water rights along a 38-mile stretch of the Yadkin River that encompasses High Rock, Tuckertown, Narrows and Falls reservoirs.
