The long and circuitous path to license renewal | North Carolina | Indy Week
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The long and circuitous path to license renewal 

⇒ See main story, "Give back the Yadkin, dammit"

Alcoa's subsidiary, APGI, began seeking a new license for the Yadkin Project in 2002, six years before the old one, issued in 1958, was scheduled to expire. Under the Federal Power Act, APGI must demonstrate that its operations on the Yadkin "will be best adapted to a comprehensive plan for improving or developing a waterway" in terms of its navigation, hydropower, fish and wildlife, flood control, water supply, recreation and other "beneficial public uses."

Other applicants can vie for the license when it's up for renewal, as the state is doing—over Alcoa's objection that its application came in after the 2006 deadline.

The decision is up to the Federal Energy Regulatory Commission (FERC), a five-member body that must include at least two members of each political party. The board is currently composed of two Democrats and two Republicans; there is one vacancy.

FERC can renew APGI's license on its own authority. The FERC staff recommended renewal in September 2007.

If FERC decides against renewal, however, it cannot strip the license from APGI and assign it to someone else without an act of Congress to "recapture" it. Under recapture, Congress would reimburse APGI for the depreciated value of its investment in the dams and power plants, an amount disputed between North Carolina and APGI but which is likely to be far below what they could be sold for. Whatever Congress paid APGI would be billed to the new licensee.

Alcoa says that if North Carolina wants its facilities, it should use its powers of condemnation to acquire them, which would require that the state pay "fair market value" for them.

Meanwhile, Alcoa (APGI) is seeking a 50-year license with the support of 23 organizations, public and private, including the town of Badin, the city of Albemarle and Montgomery and Rowan counties. Other counties on the Yadkin are either neutral or, in Stanly County's case, opposed.

In its application, APGI promises to donate 1,442 acres of land to Morrow Mountain State Park and other public agencies and to make available for sale 4,000 of the 15,000 acres it owns along the Yadkin. Pending FERC approval, it's promised to supply Albemarle with up to 30 million gallons of water a day from its reservoirs, essentially for free.

It also pledges to keep summer lake levels high at High Rock Lake, even if doing so costs it water for power generation. Otherwise, the company is allowed to charge for withdrawals from its reservoirs if they would cut into the water it has available for its power plants.

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