news-record.com

RALEIGH (AP) — Federal energy regulators should deny Alcoa Inc.'s bid to keep operating a series of Yadkin River dams because the company's profit motive could conflict with managing droughts and attracting new jobs, Gov. Beverly Perdue's administration said.

"There is the potential during severe droughts for conflicts between municipal water supply and water used to generate electricity," state officials said in a new filing to the Federal Energy Regulatory Commission. The federal regulator is considering Alcoa's bid for a new license to generate and sell electricity from the Yadkin River dams for up to another 50 years.

An Alcoa spokesman said Monday the arguments are part of the state's campaign to take away a company asset worth millions of dollars.

FERC has never decided against renewing a hydroelectric operating license, an agency spokesman said. If FERC did so in the North Carolina case, Congress would have to decide whether a state or municipal body should take over operating the hydroelectric project after compensating Alcoa.

Perdue's Commerce Department argued in a document filed with FERC late Friday that droughts in 2002 and 2008 show the company's license to generate power could interfere with using the river's water to support life.

"Rapid urban growth in North Carolina will lead to more conflicts over the uses to which the available water in the Yadkin River basin should be applied," the state's filing said. "It is not unreasonable to conclude that there could come a time when some or all of the Yadkin River waters now used for hydroelectric power generation are likely to be more valuable to the state for other purposes."

Greater state control of the river is more important now because Alcoa has severed its main economic relationship with North Carolina, making the company less responsive to the state's concerns, officials said.

Alcoa had North Carolina's backing in 1958 when it won a federal license to operate the dams, which powered an aluminum smelter that employed nearly 1,000 people. But the company closed the plant, its 50-year license expired, and state official said they see no reason the corporation should keep the $44 million a year in electricity sales the dams generate.

Perdue's aides said the state would use profits from power generation to speed up cleanup of pollutants the aluminum plant may have left behind and expand incentives to draw jobs to the region bordered on Greensboro to the east and Charlotte's suburbs to the west.

Alcoa spokesman Kevin Lowery said the Pittsburgh-based company promised in 2007 that if its license is renewed it would improve the river's water quality, allow cities and towns to increase water withdrawals, and expand recreational access.

"It's disappointing to see that the governor continues to pursue this takeover," Lowery said. "At the end of the day, it's just an attempt to get the assets."

Battles over water rights have multiplied in the Southeast in recent years as political leaders confront the limits to growth posed by available water supplies.

Georgia is fighting a federal court ruling in July that could restrict Atlanta from the main water supply for 3 million people. The ruling on the Lake Lanier federal reservoir is part of a long-running water war between Georgia, Alabama and Florida. Tennessee and Georgia have had some testy exchanges over the Tennessee River.

Mississippi has asked the U.S. Supreme Court to decide whether Tennessee's largest city, Memphis, is pumping too much water out of an aquifer shared by the two states. The high court last year appointed a special master to sort out differences between North Carolina and South Carolina over water use on the Catawba River, which flows between the states.