Fortune mag on 'the Great North Carolina Power Grab'

North Carolina's bid to recapture the Yadkin River and the power plants operated by Alcoa Power Generating Inc. has stirred up huge controversy over the past couple of years, and it won't be decided until sometime in 2011 at the earliest. A state water permit is tied up in an N.C. Office of Administrative Hearings procedure, and Gov. Bev  Perdue's administration continues to hope for a Federal Energy Regulatory Commission decision rejecting a new license for Alcoa to operate the hydroelectric plants on the Yadkin.

In the current issue (Dec. 6, 2010)  of Fortune magazine, journalist Ken Otterbourg, a former Raleigh correspondent and managing editor of the Winston-Salem Journal, writes through the power struggle in a seven-page text-and-photo spread under the headline "Alcoa and the Great North Carolina Power Grab."  Here's a link.

In part, Otterbourg writes,
Alcoa bristles when its opponents say that the company acts as though it owns the river and the water. It doesn't, but the license gives it substantial water rights and a powerful negotiating position for changes to those rights. State officials can imagine a time during the life of the next license when North Carolina might need to use the Yadkin as a major water source, and they don't relish having to possibly pay Alcoa for revenue lost when water is diverted from the turbines.

Water rights were just one part of a 2007 settlement agreement that Alcoa hammered out after five years of meetings with property owners and governments. The state of North Carolina, which is now fighting to strip Alcoa of its license, signed the agreement. Twice. Stanly County didn't sign and has sued the state. It says Alcoa's industrial legacy has left the land and water polluted, and that state regulators looked past that record when granting the company a key permit. Alcoa disputes those allegations and is assisting the state in its defense, helping one North Carolina agency while it fights others.

And for Perdue and her team, there is this slightly inconvenient truth: Federal regulators have never taken back, or recaptured, a license. The Federal Power Act contains a brief section that addresses the process, which requires congressional approval, but there's no precedent for how it might actually work.

Alcoa's opponents say that regulatory complexities aside, the morality of their argument couldn't be clearer. Alcoa, they say, had a deal with Stanly County and by extension the state of North Carolina when the license was granted in 1958. It got to use the river to make power to provide local jobs. And with the jobs gone, the company doesn't deserve the license.