Alcoa sells NC river dams to Maryland clean-power company

By Emery P. Dalesio, AP Business Writer

Alcoa Inc. is ending a century of ownership and its years-long relicensing fight over four North Carolina hydroelectric dams by selling them to a Maryland company that specializes in running clean-power projects.

 

RALEIGH, N.C. (AP) — Alcoa Inc. is ending a century of ownership and its years-long relicensing fight over four North Carolina hydroelectric dams by selling them to a Maryland company that specializes in running clean-power projects.

Spokeswomen for Alcoa and Cube Hydro Partners on Wednesday declined to disclose the purchase price for the dams, which were originally built to power an aluminum smelter on the Yadkin River. Alcoa said it sold the dams along with land in Ferndale, Washington, and a former Frederick, Maryland, smelter property to separate buyers for about $400 million.

Alcoa in 2007 closed the factory that once employed 1,000 people. The company has made about $200 million since then by selling the electricity to commercial customers.

"We are committed to being good stewards of these well-run hydropower plants that have a long history of generating reliable, carbon-free electricity," Cube Hydro Partners CEO Kristina Johnson said in a prepared statement. Johnson is a former dean of Duke University's engineering school and a former U.S. Energy Department undersecretary.

Alcoa in 2012 sold a similar hydroelectric dam complex at a former smelter site on the North Carolina-Tennessee border for about $600 million after receiving a new 40-year operating license from the Federal Energy Regulatory Commission.

Alcoa's Yadkin sale does not include some 15,000 acres of land surrounding the 40-mile-long string of dams, Alcoa spokeswoman Sonya Elam Harden said.

Republican Gov. Pat McCrory and his Democratic predecessor Beverly Perdue have fought Alcoa's efforts to renew its federal operating license for the Yadkin dams by 50 years. Inexpensive energy from the dams on the state's second-largest river system could generate thousands of jobs in an otherwise underdeveloped region, both governors said, while the water is an important supply for North Carolina's 10 million residents.

"We should be able to use it for North Carolina water needs and to create North Carolina jobs. The benefits of the Yadkin River belong to North Carolina's people," McCrory said in 2013 when the state filed a federal lawsuit.

The litigation challenged Alcoa's ownership of the riverbed on which the dams were built beginning in 1917. Alcoa won its case after a trial last year and the state is appealing.

McCrory spokesmen didn't respond when asked how Alcoa's sale would affect the state's relicensing fight.

The state isn't clear how the sale will affect the riverbed ownership lawsuit, but expects to win its case, said Christopher Mears, a spokesman for the state Administration Department, which manages state property.

Cube Hydro Partners said it would upgrade the plants and increase electricity output by about 50 percent over what Alcoa reported last year. The aluminum smelter has left a legacy of pollutants including cyanide, fluoride, PCBs and trichloroethylene — which the federal Centers for Disease Control and Prevention links to certain kinds of cancer.

Alcoa had said it would not upgrade the dams until its new license was in hand. Alcoa's relicensing case submitted to FERC in 2007 will likely transfer to Cube Hydro, agency spokeswoman Celeste Miller said.

"We hope the new ownership will be willing to make those investments to improve water quality and to make improvements to how the project is managed," said Yadkin Riverkeeper Will Scott, whose environmental group has opposed Alcoa's relicensing efforts.

The North Carolina purchase doubles the electricity now generated by the hydro projects in New York, Pennsylvania, Virginia and West Virginia owned and operated by Bethesda, Maryland-based Cube Hydro.

Alcoa announced Tuesday its second-quarter profit slipped nearly 4 percent, but earnings and revenue beat Wall Street expectations.

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