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Alcoa could sell its Yadkin hydro assets

As Alcoa inches toward renewal of its embattled Yadkin River hydro license, the aluminum giant acknowledges the 38-mile project could be sold.

Control of the Yadkin’s economic value has pitted Stanly County, site of a now-closed smelting operation, against Alcoa for more than six years. Alcoa now sells electricity that once powered the smelter.

The two finally settled their dispute earlier this month. The county agreed to support the hydro license in exchange for access to 30 million gallons of water a day and $3 million.

But Alcoa’s chief sustainability officer, Kevin Anton, wouldn’t rule out Wednesday that the hydro project could be sold once the license is in hand.

“I don’t think you could ever get a global company to say that an asset will stay in its portfolio forever,” Anton said after a ceremony marking electronics recycling company ERI’s first anniversary at the redeveloped Alcoa plant.

Last November, Alcoa sold its Tapoco hydro project in Western North Carolina and eastern Tennessee for about $600 million, a few years after winning a 40-year renewal of its license. The four-dam project had also powered a smelter that is now shuttered.

The same scenario could play out on the Yadkin, says a New Hampshire private equity fund that has proposed buying Alcoa’s hydro assets and eventually turning the project over to public ownership.

The Tapoco sale “lay bare (Alcoa’s) basic goal – to acquire a new, long-term federal license allowing control over a public resource, and to flip that license to the market for an immediate and large profit,” New Energy Capital Partners wrote last month.

The fund asked the Federal Energy Regulatory Commission to allow New Energy to become a party to the relicensing. Alcoa protested, saying the deadline for such interventions passed years ago. State officials asked FERC for 90 days to respond to the request.

Stanly County commissioners’ Chairman Gene McIntyre couldn’t be reached Wednesday.

Anton said Tapoco was sold as aluminum markets struggled – prices have fallen by more than one-third since 2011 – and because the operation no longer fit the company’s portfolio.

“We like hydro assets. We do strategic reviews and determine what should stay there,” he said. “It would probably depend on world markets.”

Anton wouldn’t speculate on when a new license could be issued but said it’s possible by the end of this year.

Before then, the state would have to certify that Alcoa’s dams don’t hurt water quality in the Yadkin. The state revoked that certification in 2010, saying Alcoa had omitted data.

Alcoa says it has installed equipment to improve oxygen levels in water released from its Badin Lake dam and would now meet state standards. The state has not yet ruled.

State studies reported this month, meanwhile, appeared to shift the blame from Alcoa for contamination of its Yadkin lakes by the cancer-causing chemicals called PCBs.

Alcoa has acknowledged PCB contamination near its Badin smelter and in January finished capping lake sediment to prevent its spread.

The state studies found PCBs in two lake sediment samples but said they pose no health risks.

The state also found PCB-contaminated catfish in three lakes Alcoa controls and has urged pregnant or nursing women and children not to eat them. It did not identify a source but called the contaminants widespread.

The Yadkin Riverkeeper has blamed the state for not alerting area residents of the contamination sooner, and says more testing is needed.

Recycling unit expanding

Alcoa’s 123-acre Badin smelting works, meanwhile, is being redeveloped as Badin Business Park.

Electronic Recyclers International, of which Alcoa owns a stake of less than 10 percent, became the park’s first tenant in May 2012.

The company recycles electronic waste such as computers, cellphones and televisions.

ERI now employs 66 people at the site and “we’re not going to be happy until we have 150-plus employees,” CEO John Shegerian said Wednesday.

“This will be the biggest electronics recycling site in the Southeast,” he said.

The company plans to add a $5 million shredder, and Shegerian said he expects the 18 million pounds a year now being processed to double over the next one to two years.

Henderson: 704-358-5051 Twitter: @bhender
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