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Perdue, Alcoa and the jobs

Jack Betts
Jack Betts writes on politics and life in The Carolinas for the Charlotte Observer's Editorial page.

RALEIGH A lawyer from the N.C. attorney general's office surprised a lot of folks the other day in an administrative law hearing. He asked Judge Joe Webster if he could summarize the views of Gov. Bev Perdue on a request by Stanly County to stop a state permit the Alcoa Power Generating Inc. wants. The company needs it to renew its Federal Energy Regulatory Commission license to operate hydroelectric dams on the Yadkin River.

What surprised folks was not that the governor opposes Alcoa's getting the new license. Perdue made her views known last year.

What surprised folks at the May 20 hearing was that she took a position that, in effect, is at odds with a permit issued by her administration. The Department of Environment and Natural Resources on May 7 issued a clean water certification, a key document Alcoa needs in order to renew its license.

Getting that permit in early May was a major victory for Alcoa, which came just-that-close in 2008 to getting the permit. It was delayed on a technicality after Alcoa opponents complained that the state had not done a required fish study in the river near Alcoa's now-mothballed plant.

Alcoa's N.C. jobs dwindled

Alcoa once employed about 1,000 workers at the aluminum plant. But when the company began reducing its employment and shut down the smelter entirely, support for the company – and its federal license to run the dams – began to dwindle. With its license up for renewal in 2008, Alcoa was negotiating an agreement with local groups, environmentalists and the state in support.

The state's official support began to unravel last year when Gov. Mike Easley and Lt. Gov. Perdue began opposing renewal. Perdue doesn't think Alcoa should get a license to use public waters to generate unregulated power and sell it on the open market – unless it comes with a lot of jobs.

So it was that Special Deputy Attorney General Faison Hicks asked Judge Webster if Perdue could express her view “of the significant public interests that are at stake here,” Hicks wrote the next day. Perdue, he said, relied on experts in her administration to decide permits, but since the permit was issued, “the governor believes that an important development has occurred.”

That development, he said, was that Stanly County “has raised questions going directly to the welfare of our environment, the life of the Yadkin River and, ultimately, the health and safety of the people of this state.” She was concerned about “cancer-causing toxins that even Alcoa agrees reside in sediments at the bottom of Badin Lake as a result of Alcoa's past activities.” Alcoa says they're not a threat. Stanly County disputes that, and Perdue was aware of the state's recent fish study showing toxins in the tissue of a significant percentage of Badin Lake fish, Hicks said.

Public interest ‘supreme'

Perdue, he went on, wasn't thinking only of procedural rules and technicalities. She's also thinking about “common sense decision-making and ordinary prudence” – and, he added, she believes the public interest “should reign supreme” in this case.

That's high-toned language for a governor to use, through a spokesman, in a legal proceeding, to take issue with a state permit issued by her administration, without challenging the decision to issue the permit.

But boiled down to its non-rhetorical essence, Perdue's words seemed to raise a question: why did DENR issue the permit when the fish study, and a consumption advisory about the fish issued by the Department of Health and Human Services, should have raised red flags?

Administration officials say privately that Perdue was careful not to take issue with DENR's decision to issue a permit. What she wanted to draw attention to was Stanly County's arguments about health and safety of the Yadkin and Badin Lake in particular.

But the larger issue, Perdue told me Thursday, is how the state takes care of its waterways, and whether the state should endorse a company's use of the water for its own commercial purposes without a significant benefit such as a substantial number of jobs.

Another license ‘not right'

One reason Alcoa got its 50-year permit in 1958, she said, was its workforce at the Badin plant. That benefit no longer exists. And questions about environmental issues further undermine the company's request, she said.

“I believe private use of the state's waters has to be tied to providing jobs,” she said, “and it's not right” to grant a license to Alcoa without such a tie.

“Alcoa in my mind has not shown much of a good-faith effort in terms of either hiring people or making sure the water quality is well-taken care of,” she went on.

Perdue is likely to sign legislation, if the General Assembly approves it, creating a Yadkin River Trust that might eventually purchase and operate the Yadkin River hydroelectric dams. While Alcoa has protested the creation of such an entity as a “taking” of a legitimate business, under federal law such dam projects on public waters can be “recaptured” at a fair price – though it has never happened. If it did, Alcoa argues, it would send the wrong message about doing business here.

Perdue sees a different message: “We want jobs, but the state has to derive for the people some sort of benefit – and (for Alcoa) to sell it (power) off in the market without a benefit to the people of this state sends the wrong message.”

Jack Betts is an Observer associate editor based in Raleigh: jbetts@charlotteobserver.com.

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