North Carolina asks FERC to reconsider Yadkin River hydropower project relicensings

The state of North Carolina has asked the Federal Energy Regulatory Commission’s to repeal a 40-year operating license awarded earlier this year to Alcoa Inc. for the operation of four hydropower plants on the Yadkin River.

The license was approved September 22 and covers the 108-MW Narrows, 38-MW Tuckertown, 33-MW High Rock and 31-MW Yadkin Falls plants — all of which had been operating under one-year permits since the original license expired in 2008.

Energy generated by the four hydroelectric projects had fed a thousand-employee Alcoa-owned aluminum smelting complex until the company shuttered it in 2007, at which point Alcoa began selling power from the plants for an estimated $200 million in cumulative profit since. State attorneys argue that the decision to sell power from the plants represents a significant shift since the company applied for the new license in 2006.

“[FERC] has taken the erroneous position that Alcoa Power’s decision where to sell project power is not a relevant issue,” the state said in its appeal.

The appeal also questions FERC’s decision to relicense the project whilst Alcoa was working to sell the plants, given that a 40-year operating license could likely increase their appeal to prospective buyers. Indeed, Alcoa announced that it had sold the Yadkin project to Cube Yadkin Generation LLC for an undisclosed amount in September, just days after receiving the new license.

“By these actions, Alcoa violated the deal it made with the Federal Power Commission and people of North Carolina in 1958 — a deal which enabled Alcoa to become the licensese in the first place,” the state attorney’s office said, adding that FERC “ignored these critically important historical and legacy facts, and how they bear upon the public interest in this relicensing proceeding.”

This move by the state follows an effort last year in which a North Carolina administrative law judge overturned the state’s denial of water quality certification that was intended to precent FERC from relicensing the plant.

Previous Gov. Beverly Perdue also unsuccessfully urged FERC to reject Alcoa Power Generating’s relicense to allow the state to take ownership of the project.

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Michael Harris formerly was Editor for HydroWorld.com.

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