Whose water is it anyway!?

by Keith Barber


Alcoa shuttered its Badin Works aluminum smelting plant in 2002, laying off more than 300 workers. (photos by Gerald W. Poplin)

Thegrowing environmental and economic development issue facing thecitizens of Stanly County and the 25 others that comprise the YadkinRiver Basin is echoed in the words of former President TheodoreRoosevelt.

“Theconservation of our natural resources and their proper use constitutethe fundamental problem which underlies almost every other problem ofour national life,” Roosevelt told Congress in 1907.

DeanNaujoks, the Yadkin Riverkeeper, cited the conservation movement of theearly 20th century as a source of inspiration for the coalition ofcitizens, politicians and environmentalists who vigorously opposeAlcoa’s efforts to seize another 50 years of control over water rightsalong the 38-mile stretch of the river. The span of flowing waterpasses through Davie, Davidson, Rowan, Montgomery and Stanly countiesand encompasses four hydroelectric dams at the High Rock, Tuckertown,Narrows and Falls reservoirs.

Ina memo regarding Alcoa’s bid to win another 50-year license from theFederal Energy Regulatory Commission, or FERC, Naujoks referred toTeddy Roosevelt’s well known opposition to corporate monopolies and hisfirm belief the nation’s natural resources belong to the people.Naujoks cited Roosevelt’s philosophy to highlight the disparity betweenthe legendary president’s philosophy and

FERC’spolicies. The federal agency “has never denied a FERC permit andexercised ‘recapture’ provisions on behalf of the public interest sincepermits were first issued in the 1920s under the Federal Power Act,”Naujoks stated.

NorthCarolina hopes to become the first state in the union to snap thatstreak. Gov. Beverly Perdue officially came on board with the YadkinRiver Coalition — a group of local businessmen, citizens andpoliticians who oppose Alcoa’s re-licensing efforts — last Septemberand her influence has proved invaluable to the cause.

Thegovernor’s office filed papers with the FERC “seeking return of theright to plan the use of the Yadkin River flows and the Yadkinhydroelectric project for the benefit of the people of North Carolina,”according to a press release.

Recapturingthe water rights to the Yadkin is essential to the health and wellbeing of the citizens of the nearly 25 counties that comprise theYadkin River Basin, Perdue stated.

“Giventhe Yadkin River’s broad impact on the state, we believe strongly thatthe state is the most appropriate body to plan use of this invaluablenatural resource, to help assure the region’s municipal water supplyand quality and to facilitate future growth and development,” Perduestated.


Gov.Perdue’s intervention has helped thrust the battle over the Yadkin intothe media spotlight. The movement started quietly more than 10 yearsago. In the late 1990s, local banker Roger Dick began carefullystudying the agreement struck between Alcoa and FERC. Dick, thepresident of Uwharrie Capital Corporation, had joined with other areabusinessmen to develop a long-range economic development plan forStanly County. Dick said he quickly realized the county was beingdenied the economic benefit of its greatest natural resource — theYadkin River.

TheBadin Works aluminum smelting plant did bring 1,000 jobs to the areaafter Alcoa applied for its water rights license in 1958. But Alcoa, amulti-billion dollar corporation and the world’s largest producer ofaluminum, ceased operations at the plant in 2007. The plant employedonly 377 people when it shut down, said Alcoa spokesman Gene Ellis.

AsDick researched the histories of energy cooperatives such as the SanteeCooper Electrical Authority and the Tennessee Valley Authority, hediscovered a connection between public ownership of natural resourcesand a region’s overall economic vitality.

“Someof the poorest counties in our state are the richest in terms of thiscommodity called water, so why would you let it get away from you?”Dick asked.

That simple question led Dick and a contingent

from Stanly County totake their case to the NC General Assembly. One of the firstlegislators to take their side was NC Sen. Fletcher L. Hartsell Jr.,who represents Cabarrus and Iredell counties.

Hartsellcame on board with the Yadkin River Coalition two years ago aftermeeting with Dick, Jim Nance, a former board member of the NCDepartment of Transportation, and Stanly County Commissioner LindseyDunevant at his legislative offices in Raleigh.

Hartsell,a lawyer, admits he was a bit skeptical at first. But after he studiedthe Federal Power Act, he became fascinated with the issue of Alcoaattempting to maintain its monopoly over the 38-mile stretch of theYadkin. Convinced of the appropriateness of the coalition’s cause,Hartsell signed on and recruited fellow Republican state senator, StanBingham.

“As far as I’m concerned, Alcoa got the gold mine and we got the shaft,” Bingham said.

Binghamcited the town of Denton, population 1,450, as a perfect example of howAlcoa is reaping all the benefits of the Yadkin without sharing thatboon with the North Carolinians who reside in the Yadkin River Basin.

“Thelittle town of Denton is having to pay [Alcoa] for the use of the watercoming down the Yadkin for drinking,” Bingham said. “The way that’scalculated is they charge because it’s a loss of power generation….This whole thing was done many, many years ago, and a lot of peopledidn’t think about the people they were dealing with at the time.”

Hartselland Bingham made a push last year to educate their colleagues in the NCSenate about what they characterized as the economic injustice ofAlcoa’s effort to re-license the water rights for another 50 years.Their efforts resulted in a bill that wouldtransfer ownership of the Yadkin Hydroelectric Project to the YadkinRiver Trust in the event FERC denied Alcoa’s re-licensing application.


SenateBill 967, or the Yadkin River Trust bill, was introduced by Hartselllast March and co-sponsored by Bingham, along with state senators TonyRand, Phil Berger, Dan Clodfelter, William Purcell and Jerry Tillman.It cleared the Senate in May by a vote of 44 to 4.

“It was a totally bipartisan group in the original filing,” Hartsell said.

Thepassage of SB 967 represented a victory for the people of NorthCarolina, Naujoks said. The bill received overwhelming support in theNC Senate because it stipulated that hydroelectric power funds “couldprovide millions annually for riparian buffer protection, upgrades foraging sewage treatment plants and funding for innovative stormwaterpollution,” Naujoks said.

“It[would’ve] created green jobs and generate[d] critical funding neededfor all Yadkin River Basin municipalities facing pending water qualitymandates required for the High Rock Lake [Clean Water Act]requirements,” Naujoks continued.

However,the House version of the bill, HB 1455, failed to pass after Alcoamounted an anti-propertyrights campaign, Hartsell said.

Whenthe bill reached the House in July, it had to go through threecommittees as the legislature’s summer session was winding to a close.

“Itdidn’t get started moving until early July,” Hartsell said. “It had tomove pretty quickly. We got it through two committees, and it went tothe floor just days before the end of the session, but we didn’t haveenough time to explain a very simple, yet very complex circumstance to120 people.”

Thebill failed to pass by a 2-to-1 margin. Hartsell said the propertyrights rhetoric perpetuated by Alcoa’s lobbyists got traction in theHouse, which determined the bill’s fate. However, Alcoa’sproperty-rights argument is based on a false assumption, he added.

“Alcoaand others keep talking about it being a ‘taking’ [of property],”Hartsell said. “It’s not a taking; it’s not even close to it. All we’reasking Alcoa to do is to fulfill the obligations that were identifiedin 1958 that they agreed to.”

“Theyacknowledged when the license was up, they no longer had the right touse the property,” Hartsell explained. “We’re saying there needs to bean equivalency for the run of our river, and when I say ‘our,’ I meaneverybody’s. It’s not a private entity. The feds and the state have hadcontrol of the run of the rivers since the beginning of the republic.”

Thelanguage of the Federal Power Act includes a stipulation that thecontrolling entity, in this case Alcoa, must estimate the recapturevalue of the resource in the event it must surrender the rights to thatresource, Hartsell said.

“There is a statutory formula for how you calculate recapture and Alcoa computed it to be $24.2 million in 2006,” Hartsell said.

Therefore,if the FERC denies Alcoa’s application and returns the water rights tothe people, the state of North Carolina will have to compensate Alcoa$24. 2 million for its four hydroelectric dams and relatedinfrastructure, Hartsell said.

Despitelast summer’s legislative defeat, the Yadkin River Coalition is nowbacking HB 1099, that passed during the most recent legislative session.

The entrance to the Narrow’s Dam on the Yadkin River. The dam is oneof four on a 38-mile stretch of the river built by Alcoa. The SedimentControl Plan sign posted by the NC Department of Environment andNatural Resources includes the disclaimer “with performancereservations.”

“We put the YadkinRiver Trust Bill into that bill, and that bill’s in conference betweenthe House and the Senate and will be put into consideration once wereconvene in May,” Hartsell said. “Frankly, it would be nice to putthis into a one-page, very clear expression of what we’re trying toaccomplish.”

Thebill clearly outlines the three primary issues at stake — A) whocontrols the waters of the Yadkin for the next 50 years; B) theenvironmental issue related to the condition or quality of the wateritself and the immediate environs; and C) the use of the electricitygenerated by the run of the river.

“It’sfar from being dead, and I’m beginning to feel good about this,”Bingham said. “Politics can be up and down but I think a lot of thefacts are finally going to come forward.”

From an economic fairness standpoint, the General Assembly’s and FERC’s decision should be easy to make, said Hartsell.

“[Alcoa]signed an agreement. We’re just asking them to live up to their ownword,” he said. “The state of North Carolina intervened 50 years ago onAlcoa’s behalf to assist them to get a 50-year license and operate theplant at Badin, but conditions have changed dramatically. If they’regoing to use it, what is the return to the people of the state on thestate’s investment in the raw material, which is the water? That wateris owned by the people.”

Alcoa’s re-licensing application represents “the mother of all incentives,” Hartsell said.

“Theywant the state to concede they should have $1 billion in benefit overthe next 50 years and provide nothing to the state,” he said. “I’m aRepublican for heaven’s sake and I’ve supported incentives but this isridiculous.”

“Whyshould we give it away?” Hartsell continued. “From an economicdevelopment perspective, energy is the major issue associated with jobgrowth and development regardless of the industry.”

Binghamcharacterized Alcoa’s stewardship of the Yadkin in much harsher terms.He pointed out that Alcoa is capitalizing on the hydroelectric energygenerated by the Yadkin by selling electricity “on the grid” ratherthan investing in the local communities.

“We’redealing with John Dillinger and Al Capone,” Bingham said. “Alcoa reaps[millions] in profits each year and North Carolina gets zilch.”


Anenvironmental study commissioned by Stanly County and conducted byprofessor John Rodgers of Clemson University last year established aconnection between contami nation of polychlorinated biphenyls, orPCBs, in fish and soil samples taken from Badin Lake near Alcoa’s BadinWorks operation.

Rodgers’findings led the Yadkin River Coalition to appeal the waterqualitycertification issued by the NC Department of Environment and NaturalResources, or DENR. Administrative Law Judge Joe Webster granted aninjunction on May 26 prohibiting DENR from issuing a 401 Water QualityCertification to Alcoa until the full appeal is heard.

Thestate issued a fish-consumption advisory for Badin Lake between Stanlyand Montgomery counties last February due to elevated levels of PCBsfound in largemouth bass and catfish. Alcoa attempted to block theadvisory by filing a legal appeal. The company claimed that the state“changed its stated evaluation criteria after the study was completeand held Badin Lake to a different standard than the other lakes andrivers in North Carolina,” according to a posting on a company website.

Despite Alcoa’s claims, the state implemented the fish-consumption advisory that currently remains in effect.

PCBs can cause anemia; acne-like skin conditions; damage to the liver, stomach or thyroid gland; changes in the immune system orreproductive system; and behavioral problems, according to the NCDepartment of Health and Human Services.

Binghamsaid Alcoa’s objection to the posting of the fish-consumption advisoryspeaks volumes about their concern for the people who swim and fish atBadin Lake.

“Itjust tells me how they do business,” Bingham said. “They fought thefish-advisory signs; they say we’re taking their property and we haveno rights to the water. We’re stuck with the bastards, at least for themoment, but I feel good about the direction of the fight we’re takingon in the future.”

Naujokssaid he’s concerned about the high concentration of PCBs in thelandfills and dumping sites near Alcoa’s four hydroelectric dams.Naujoks said Alcoa has not been entirely forthcoming about the numberof waste dumping sites in and around their facilities.

“Alcoaknows they can’t hide these dumping sites,” Naujoks said. “They’regoing around pointing out the buried bodies that they want us to find.They’re not showing us where all the buried bodies are found. As westart digging down through the layers, we’re going to find much more.”

IfFERC denies Alcoa’s application, HB 1099 would implement enforcement ofenvironmental cleanup requirements against Alcoa where 47 hazardouswaste sites have been identified as well as PCB contamination in BadinLake swimming areas, Naujoks said. The bill would also transfer controlof the Yadkin River lakes and dams from Alcoa to the Yadkin RiverTrust, support efforts to return proceeds from the production of hydropower electricity to the Yadkin River Basin to protect water quality,clean up environmental contamination and fund other projects in thepublic interest within the basin, Naujoks said.

“TheTrust will use a portion of the proceeds from power generation tocreate a Yadkin River Basin Clean Water Trust Fund to acquire land forwater-quality improvements, innovative storm-water strategies,state-ofthe-art wastewater improvements and aquatic habitatimprovements,” he added.

Additionally,Naujoks said he’s interested in making sure there is an equallyimportant campaign push to ensure proper implementation of thelegislation regarding environmental clean up and to leverage as muchfunding as possible from hydro power profits, which could generate morethan $44 million a year, to ensure a dedicated source of funding forcomprehensive basinwide water quality improvements throughout theYadkin/ Pee Dee River Basin.

TheYadkin River Coalition’s challenge of NC DENR’s water qualitycertification is scheduled to go to mediation next month. But Naujoksstrongly believes the matter will have to go before a judge.

“We’re going to court and I’m very confident we’re going to win because the law is on our side,” he said.

Naujokssaid Alcoa’s legacy will be a toxic one and the state should braceitself for a long legal battle to force the aluminum-maker to clean upthe toxic waste sites it will leave behind.

“We’llbe fighting them for decades to clean this up,” Naujoks said. “It’sjust wrong. It’s morally wrong. I’m just glad we have some prettypowerful people on our side like the governor and Stanly County.”


Bingham said once Perdue joined the Yadkin River Coalition, it changed everything.

“It’s beenwonderful; it’s been extremely important,” he said. “We were facing amulti-billion-dollar corporation, but when the governor lis tened toour pleas, they began to take this extremely seriously. They realizedthey’re in for a fight.”

GeneEllis said the governor’s filing with the FERC is not timely and thatbefore the state could be granted the license, the federal governmentwould have to take it over.

“Thegovernor doesn’t really have the opportunity for the takeover that’sbeing proposed,” he said. “There’s nothing in the Federal Power Act orthe commission’s regulations that allow for a state to take over aproject once the federal government has taken it over.”

Despitethe federal government’s regulations, Bingham said the coalition willnever quit until the Yadkin River is returned to the people of NorthCarolina.

“We’re not going to roll over and play dead, I can tell you that much,” he said.

Forhis part, Naujoks said the Yadkin Riverkeeper will continue to focus onthe advocacy, media and legal campaign, while generating support andparticipation in the coalition and educating the public about thebenefits of the legislation.

“Ourlegal case could take years to resolve, but the campaign to support thelegislation through the coalition and FERC re-licensing could bedecided within the next year,” he said. “We will work on a targetedcampaign to unify and strengthen grassroots efforts of localgovernments, public interest organizations, businesses and individualsto reclaim the waters of the Yadkin River to benefit the publicinterest.”

Binghamsaid he can see a day in the near future when the Yadkin is returned tothe people and the economy of the 25 counties in the Yadkin River Basinbegin to flourish.

“Wecan offer industry power at a reduced rate and that plays a big part inmanufacturing,” he said. “That would be a tremendous incentive. Foryears, we’ve stood by the sidelines and watched industries goelsewhere. We don’t have anything to offer industry. Our greatestresource is just flowing down the river and the dollars are beingexported, which doesn’t do anything for us.”

The NC Department of Health and Human Services issued afish-consumption advisory last February on Badin Lake after high levelsof PCBs were found in fish tissue samples. Alcoa unsuccessfully filed alegal challenge to the advisory last April. The advisory remains ineffect.

Alcoa, the world’slargest producer of aluminum, is hoping to win its relicensing effortto seize another 50 years of control over the water rights along a38-mile stretch of the Yadkin River that encompasses High Rock,Tuckertown, Narrows and Falls reservoirs.