Lawmakers to examine water rights to Yadkin

Water rights to the Yadkin River, including aluminum giant Alcoa's hydroelectric dams, will come under scrutiny this week in the N.C. legislature.

Alcoa has been under growing political fire over its four dams, which once powered a Stanly County smelting mill that has largely closed. The company now makes about $8 million a year selling electricity. It has asked federal regulators to renew its hydroelectric license. Stanly County commissioners are trying to block the license, saying money made with local resources should stay in the region. Gov. Mike Easley, Lt. Gov. Bev Perdue and commissioners in six other counties have taken up the cause, urging the Federal Energy Regulatory Commission to delay its decision.

The N.C. House is expected to vote today on a bill directing the legislature's Environmental Review Commission to study the impact of granting the Alcoa Power Generating a new license, which would be in effect for decades. Supporters expect the Senate to act by Thursday.

“It's the state's last chance to take a look before a 50-year licensing decision is made,” said Bruce Thompson, a Raleigh lawyer representing Stanly County.

The study, to be submitted to legislators by Feb. 1, may cover the closing of the Badin smelter and future water supplies for the region.

“We have been supportive for a long time of studying water issues,” said Alcoa official Gene Ellis. “From that perspective, we think (the bill) is a good thing.”

Alcoa isn't OK with suggestions that the state consider transferring Alcoa's hydroelectric operations to the public. Such a step, the company said, would amount to an unconstitutional taking of private property by the government.

The company-vs.-county fight has roiled well outside Stanly.

A statewide poll Alcoa commissioned last month found widespread opposition to using tax money to take over a private business. The pro-Stanly N.C. Water Rights Committee responded last week with a poll heavily supporting control of the Yadkin by N.C. residents, not the multinational Alcoa.

State regulators, meanwhile, are taking a second look at Alcoa's operations.

Because of a public-notice error in April, the state made Alcoa reapply for a key permit needed before the federal license can be granted. The permit certifies that the water pouring through Alcoa's dams meets state standards.

Stanly County then filed a consultant's report saying sediment in a swimming area of Badin Lake, near the aluminum mill, is contaminated by toxic chemicals once used in electrical transformers, fuels, oils and greases. The contamination has been known since the 1990s.

The state now wants Alcoa to sample water discharged from its dams to learn whether the chemicals are flowing downstream, said John Dorney, an official of the N.C. Division of Water Quality. Alcoa will also produce a plan for studying whether the contaminated sediment is migrating toward the Badin dam.

A decision on the state permit is expected by early April.