Thursday, July 23, 2009

McCrory leads Perdue in new Civitas poll

The Civitas Institute, associated with several organizations such as the John Locke Foundation funded by the family of Art Pope, has a new twist on the “Gov. Perdue's popularity keeps falling” theme. It notes in its new poll that outgoing Charlotte Mayor Pat McCrory now leads Perdue by 14 points. Is it a case of buyer's remorse, the institute asks?

McCrory must be wondering about all those voters: Where were you when I needed you? (He lost the race for governor last year to Bev Perdue.)

Here's part of the Civitas Poll's analysis:

RALEIGH, N.C. – Just nine months after defeating Charlotte Mayor Pat McCrory in the race for Governor, Bev Perdue now trails McCrory by 14 points in a hypothetical matchup according to a new poll released today by the Civitas Institute.
According to the live caller poll of 600 voters, if the election for Governor were held today, 46 percent of voters would support McCrory. 32 percent would vote for Perdue. 22 percent of voters were unsure.
McCrory leads among Republicans (80-7) and Unaffiliateds (45-28), while Perdue is only garnering a bare majority of her own party’s support (52-21).
“It’s pretty clear that many voters in North Carolina are now having buyer’s remorse,” said Civitas Institute Senior Legislative Analyst Chris Hayes. “Perdue’s $1.6 billion tax increase proposal and her handling of the budget crisis have cost her politically – so much so that even voters who overwhelmingly backed her are now not willing to voice support for her.”

Reader: Mountaintop removal is why we need windmills

A reader argues that the mountaintop removal method of mining coal for power plants is one key reason why North Carolina needs commercial wind farms. I don't know of any coal mined in North Carolina by this method, but I do know that N.C. utilities buy a lot of coal mined this way in other states, so there is a clear connection. Here's what Roberta Dees of Charlotte has to say:

Concerning Jack Betts' column of July 19:

Why would anyone want windmills on top of our mountains? Because they would make electricity that would enable us to keep our mountains, instead of having them blown away.

Please take a look at

Look at any of their videos to watch mountain tops being blasted away with dynamite, and to see what the scene looks like afterward. So far over 500 Appalachian mountaintops have been blown away.

After the coal has been removed, the dirt and debris is dumped over the side -- into the valleys -- into creeks and streams. So far, 2,000 miles of Appalachian streams have been buried under mining waste.

Take a look at What's My Connection? to see how we are involved.

Now look at Coal River Mountain to see how residents have sacrificed and worked to get an alternative to having their mountain blasted away. How they have figured out to make a wind farm on top of their mountain. Ask them which view they would prefer to look at.

Coal River Wind

For decades, mountaintop removal and valley fills have had a devastating impact on local communities, the economy, and our environment. How will history look at this period in American history?

Roberta L Dees

Also, my colleague, Observer editorial cartoonist Kevin Siers, ran across this blogpost on wind farms and North Carolina's energy bite. It's worth a look.

Wednesday, July 22, 2009

Yadkin River Trust bill and Hugo Chavez?

Alcoa Power Generating Inc. issued two new items on its blog today aimed at dampening support for a bill in the legislature to create a Yadkin River Trust to operate the hydroelectric plants on the Yadkin for which Alcoa is seeking new federal licenses. Alcoa's N.C. property manager Gene Ellis posted one from a businessman who is so concerned about the prospect of the state gaining control of the dams that he says he's planning to move to South Carolina if the bill passes. He likens the prospect of the state taking over the project to the nationalization of private property by Venezuelan President Hugo Chavez. Here’s a link.

Richard Glenn of Glenn Underwater Services said, "It started very small just like the forced acquisition of Alcoa’s Yadkin projects and ended up with a country that is now state run and has evolved from a healthy democracy to an almost certain dictatorship. During that time, Chavez was using terms such as ‘this would be best for the citizens,’ these companies are ‘sending profits overseas,’ and so forth. These exact phrases are now being used by politicians in North Carolina.”

Adds Ellis: “The government is trying to take our business and that’s an unprecedented attack on our private property rights. North Carolina doesn’t simply want to take our license away. It wants to take our dams and the land around them.”

In another blogpost, Alcoa takes issue with the N.C. Water Rights Committee's assertion that the Yadkin project may produce as much as $80 million in income. Ellis said that figure is absurd, and concludes, "The profit numbers being floated by the N.C. Water Rights Committee are pure fantasy. But if anyone out there can tell me how to create an $80 million profit from a business that only generates about half that in gross revenues, please give me a call."

Readers recall windmill noise over Boone

Some readers of Sunday's column on the possibility of building industrial wind turbines in the Western N.C. mountains reminded me of what happened a generation ago when an experimental windmill was erected in Watauga County on Howard’s Knob overlooking the town of Boone. That device made a racket that eventually led to its removal.

From a reader in Davidson:

You wrote a fine editorial in today's Sunday Charlotte Observer about windmills in the mountains, but left out one very important item.
You did not mention one word of the huge windmill that was built outside Boone on the mountain top back in the early 1970's. The few times that it worked, you could hear it go thump, thump, thump and you could feel the vibration in the ground when the blades turned. The people in Watauga County fought against the windmill, but it was built anyway and never achieved what it was supposed to do. After several years the huge windmill was dismantled.

And from a reader in the Western Piedmont:

Sure you remember this ill-conceived wind turbine, noted here in Time magazine piece of June 2, 1980:

"Shushing the swish-swish

"The world's largest windmill began operating last year in Boone, N.C. With blades that stretch 60 meters (200 ft.) from tip to tip and can generate 2,000 kw of electricity, it is also, it seems, the world's noisiest. Besides dominating the scenic Blue Ridge Mountains landscape—or despoiling it, as some of those living near by complain—the monster rattles windows, bounces cups and saucers and creates an irritating swish-swish.

"Surprised by this unexpected noise pollution from an experimental power plant that was supposed to be almost entirely free of environmental headaches, engineers from the U.S. Department of Energy and NASA flocked to Boone (pop. 8,754). Their findings: though the very low-frequency sound waves (about 2 cycles per sec.) from the windmill are below the usual range of human hearing, they can be amplified by wind and weather conditions and the terrain over which they are directed and thus become powerful enough to vibrate objects in the home.

"Muffling the wind machine may force a major retooling of the $6 million project, including a change of blades and electrical generators to allow for slower rotation. It may also require a reorientation of the basic design, so that future windmills face into the wind rather than away from it. Meanwhile, the Department of Energy has given Boone some temporary relief. Until some way can be found to hush the noisy blades, they will no longer be allowed to whirl at night, in the early morning or on weekends."

The reader went on:

During WWII my mother negotiated, entirely by mail and telephone, the lease of a summer house in the barren mesa northeast of Albuquerque. The owner was a professor at the University of New Mexico who was off to Spain on a sabatical. The property included a three-bedroom home and swimming pool enclosed by an adobe wall. Water was provided by a windmill. Upon arrival we found everything exactly as stated in the lease; what was not stated was that house did not have indoor plumbing and the windmill was soon revealed as grossly unproductive. It was a long, hot summer, albeit one that in later years we enjoyed recalling and often cited as a lesson in contracts.

I don't think I'd put a great deal of stock in wind turbines.

Speaker relents; Yadkin River bill up in committee next week

House Speaker Joe Hackney has given the go-ahead to Rep. Cullie Tarleton, D-Watauga, to hold another committee meeting on the proposed Yadkin River Trust bill. Hackney last week asked Tarleton to cancel this week's meeting, at which Chairman Tarleton planned for his House Water Resources and Infrastructure Committee to vote on the Yadkin River bill. The Senate passed the bill earlier this year with bipartisan support. It would create a trust that could purchase and operate the hydroelectric dams on the Yadkin River if the Federal Energy Regulatory Commission does not issue another federal license to Alcoa Generating Inc. to operate the dams -- and if Congress engages, for the first time ever, in a "recapture" of the license as part of a process that would lead to another operator producing power with the waters of the Yadkin. The committee will meet at 2 p.m. July 28 in its usual place, Room 1228 of the Legislative Building.

Last week Hackney mentioned several reasons why he had asked that the committee meeting be cancelled. He lifted that freeze on the bill Tuesday afternoon about the same time as House and Senate negotiators came to an agreement over raising taxes to balance the 2009-10 state budget. If anyone suspects a connection between the two actions, they've got a lot of company. Backers of the bill think so, anyway.

Tuesday, July 21, 2009

Catching up on the Alcoa controversy

Here's a lonnnnngggg blogpost catching up on some developments in the legislature and elsewhere regarding Alcoa's quest for another federal license to operate the Yadkin River hydroelectric projects.

Gene Ellis, Alcoa property manager for its North Carolina operations, posted the following on his blog after appearances before the House Water Resources and Infrasture Committee in recent weeks:

A couple of weeks ago, he testified, in part:
My name is Gene Ellis and I represent Alcoa Power Generating Incorporated. I was born and raised in North Carolina and I have lived in Stanly County for more than 30 years. For the past seven years, I’ve been working on the relicensing of the Yadkin Hydroelectric Project.
I have to tell you, I never thought I’d see the day when the State of North Carolina contemplated taking over a private business. And that’s exactly what this State Trust bill is – the taking of a privately-owned business that Alcoa started here in 1915.
And, it could cost the state of North Carolina $500 million or more – a half-billion dollars – at a time when the state is in the midst of its worst budget crisis in years.
Some people say this bill doesn’t really do anything – it just puts a structure in place to operate the Yadkin Project if a takeover happens. But a vote to create a Yadkin River Trust is a clear indication that the General Assembly supports a government takeover despite the cost. If this bill becomes law, it will be possible for the state to pursue a government takeover.
See the blog for the remainder of his thoughts.

After last week's session, he posted this on his blog:

I was back at the N.C. General Assembly again this week for another meeting of the N.C. House Water Resources Committee on Tuesday. The meeting was designed to give committee members an opportunity to ask questions about Senate Bill 967, a bill that would authorize North Carolina to take over Alcoa’s privately-owned hydroelectric business along the Yadkin River.
A couple of highlights worth sharing:
1. Faison Hicks, a lawyer with the N.C. Attorney General’s office who has been involved in Gov. Perdue’s push for a government takeover, acknowledged that it is impossible to know what a government takeover of the Yadkin Project would cost. Alcoa believes a takeover will cost North Carolina more than $500 million.
2. When pressed about why the legislature needed to pass Senate Bill 967 this year – without knowing the potential price tag associated with it – Mr. Hicks said it wasn’t necessary to pass this legislation for the state to continue its pursuit of a takeover. He said the state can continue its efforts at the federal level regardless of whether this bill is approved or not.
3. Richard Whisnant, a professor with the UNC School of Government who has extensively studied water issues in North Carolina, acknowledged that control of the water in the Yadkin River will still be subject to federal regulation even if North Carolina succeeds in taking over the Yadkin Project.
Committee members asked a lot of thoughtful and probing questions that underscore the complexity and uncertainty of a government takeover and the associated cost for North Carolina.
One member asked whether a takeover of the Yadkin Project would be a pilot project that could ultimately lead to a state takeover of other privately-owned hydro projects, such as those operated by Duke Energy and Progress Energy. “I don’t know,” Mr. Hicks said.
Following that, the N.C. Water Rights Committee responded with the following explainer:

Contact: Roger Dick at
Hydroelectric power from established projects is the cheapest energy to produce, sells for the highest price on the electrical grid, and generally, because it is the cheapest in terms of fuel cost, most of what is available will be dispatched before energy produced from coal or natural gas. It is extremely profitable for projects that are already built, produces cash whenever the water runs, and can be more certain to produce a cash flow than an insurance company annuity… water running down hill with gravity on its way to the ocean is creating virtual guaranteed profits without risk of failure.
Regulated utility companies such as Duke and Progress provide a public service to our citizens. These companies are regulated by the State of North Carolina Utilities Commission. They have retail customers; they provide jobs to thousands of North Carolina citizens; they invest millions in the state’s economic development; and they have as their primary business the purpose of providing electric power to the public.
Alcoa is in the primary business of making aluminum. In order to make aluminum, you need two primary resources: bauxite and lots of cheap electrical power, like hydroelectric. Alcoa is not a regulated public utility providing electrical power services to the public. Alcoa is a private manufacturer, not regulated as a public utility providing a public service. Yet Alcoa has been allowed to hold a “monopoly” on the use of a public resource, by virtue of a FERC license, for a limited amount of time.
Under the terms of its federal license, Alcoa is free to sell its power in the open unregulated wholesale market to the highest bidder. The profits are to be recorded on its books, and the net benefit and profits from the waters of Yadkin, I assume, are then transferred from our state’s economy with an accounting entry, just as any subsidiary of any global corporation would be expected to do. Billions of dollars from a local natural resource that belongs to the public are thus “lost” to a multinational interest, whose first loyalties necessarily belong to an international base of investors.
The primary benefits of the waters, jobs created, and other public good our utility companies create are considered to be of primary benefit to the citizens in our state. The same is not the case with Alcoa … a multinational company, whose primary raw material in this state is lots of cheap electrical power. That raw material was once used to purchase jobs for citizens all across the lower Yadkin Basin, which contributed to a strong regional economy. Alcoa now sells that power in the wholesale market for its own gain with very little of its wealth benefiting the public and very little of the profits generated being invested to create new jobs and capital investment inside North Carolina.
Alcoa gave the U.S. Government an option to take back the Yadkin Hydroelectric Project and all the land and other assets (including the dams) necessary to use the water to produce electrical power, when its original license expired. These assets are called “project property”, and the takeback or “recapture” cost of the option in the agreement, payable at the end of a license period, is stipulated in the 1958 license. In exchange for the option, the US Government, through the Federal Power Commission, granted Alcoa an exclusive license for 50 years to generate electricity. That license has expired. Alcoa’s attorney acknowledged this option, backed up by the Federal Power Act, in formal filings more than 50 years ago, perhaps to persuade the Commission to give the company a license for 50 years instead of the shorter period customarily resulting from the Commission’s practice at that time.
Over the next 50 years, and because it had the license, Alcoa made a guaranteed profit worth many millions. Its cost and investment have been returned to its investors many times.
To the extent it has any unrecovered cost on its books because of recent, major improvements, the license agreement specifically addresses how Alcoa will be compensated by the government or any other succeeding licensee. The Company understood and agreed to these terms in exchange for the license to use the public’s waters.
Alcoa struck a business contract more than 50 years ago. It completely understands this and it is being dishonest in making a takings claim. The existing law and the language in the license easily refute Alcoa’s takings claim; it is a matter of Alcoa’s honoring a contract and exclusive right that has been quite profitable to it, in the past and now for the foreseeable future.
None of the financial information that Alcoa has provided is from an independent source, so it cannot be relied upon, especially since Alcoa has its own motives. FERC and the public need independently prepared financial information on the value of the Yadkin Project.
We know the amount of power that can be and has been reported as generated. Taking published market values for hydroelectric and applying conservative hydroelectric industry operating standards, it appears that the real profits are much higher than those being reported.
By exercising its option, the U.S. Government could acquire the Project and return the use of the waters to its citizens in North Carolina. This will prevent them from being exploited of their God given rights to their very own water.
At a time of budget crisis why would our state not attempt to recover the use of their own water resources that are capable of generating millions in profits, provide water to drink, and create low cost power to support jobs? .
I am confident that our situation could be improved if we had the right to use our own natural resources, and the public would benefit if the State were to pursue this course. Let’s get some good independent financial information and validate the value that we instinctively believe is there.
Hydroelectric industry operating standards applied to the “Yadkin Project” annual mega hours output indicate that Alcoa could earn a much higher net profit than $8 million. We believe the value could be as high as $75 to 80 million in net profits, not gross. If Alcoa is telling the truth, then it should have no objections to an audit of Alcoa’s past and present operation on the Yadkin.
The company may well be using different accounting methods for different purposes, for example, using cash flow accounting part of the time and creative financial accounting another part of the time, with no consistent accounting standard available to assess their operations across-the-board. One example is the case where Alcoa has added a line item for the “opportunity cost of capital” in one of its exhibits. Normally, opportunity cost is a judgment-laden value, not a verifiable cost actually experienced by the company and normally included in accounting documents.
The financial information operating statistics released by Alcoa for relicensing purposes does not fit industry standards and begs to be questioned and should be validated by independent audit. The resource is just too valuable to the public not to get better information. We need independently prepared numbers; no private individual would try to make decisions of this scale and value in either their private or business affairs, without independent financials.
The public interest begs the question on independent financial information, and Alcoa has not been forthcoming with that information. And if there is “only $8 million” in profits every year, that still does not answer why those dollars should belong any more to a private corporation than to one established to reinvest those profits for the benefit of North Carolina’s citizens.
And finally, the Yadkin Riverkeeper Dean Naujoks put out the following:
Yadkin Riverkeeper Criticizes Alcoa
For Appealing Conditions of 401 Water Quality Certification Granted by the State
Environmental Group Asks Company to Explain Why it Accepted and Then Denied Conditions for its Permit to Operate the Yadkin Hydroelectric Project
WINSTON-SALEM, N.C. - The Yadkin Riverkeeper® has announced a call for Alcoa to explain why it has flip-flopped and decided to appeal its 401 Water Quality Certification from the N.C. Department of Environmental and Natural Resources (NC DENR) for the Yadkin Hydroelectric Project after saying it was fine with the terms of the permit when it was issued May 7. In a petition for contested case hearing filed July 6 with the N.C. Office of Administrative Hearings, Alcoa now claims that the certification was issued unlawfully and objects to having to pay a $240 million surety bond for the Project as well as address dissolved oxygen levels in the four dams along a 38-mile stretch of the Yadkin River that make up the Project. Along with its April 9 appeal of the fish consumption advisory the N.C. Department of Health and Human Services issued Feb. 11 after finding elevated PCBs in fish caught from Badin Lake (a reservoir within the project), Alcoa has rejected virtually every restriction the state has put on it for the Yadkin Hydroelectric Project this year while at the same time claimed to follow all environmental laws for the Project.
Dean Naujoks, the Yadkin Riverkeeper, said Alcoa does not want any limits on its current setup with the Yadkin Hydroelectric Project as it files for another 50-year federal license to operate it, especially ones that will cost it money to comply with environmental regulations that apply to other businesses in North Carolina.
"By filing this petition after previously saying in public they were fine with the terms of the certification, Alcoa has shown it is concerned more with its bottom line than with the needs of North Carolina residents who use the Yadkin River for drinking water, fishing, swimming and other recreational purposes," said Naujoks. "They even have the gall to conclude that ‘there remains the possibility that additional petitions for contested case will be filed with respect to 401 Water Quality Certification." There are hardly any other conditions DENR issued in the certification that Alcoa has not already objected in this petition.
"Yadkin Riverkeeper filed suit against NC DENR on May 13 for issuing the Water Quality Certification to Alcoa because we felt the agency failed to exercise its full authority under federal Clean Water Act, which Administrative Law Judge Webster agreed by issuing a temporary injunction. We also felt the NC DENR ignored state laws regarding water quality protections and environmental review, in this case," add Naujoks.
"Alcoa is now fighting for the water quality permit they requested yet saying its restrictions are unfair and should be dropped. Apparently in Alcoa's view, DENR was right in issuing a permit but wrong in asking the company to correct any of the environmental concerns the permit is supposed to address. Alcoa is putting the public at risk by trying to block the state from posting signs about PCB contaminated fish in Badin Lake, while trying to thwart efforts to address environmental problems linked to Alcoa. If there has ever been any doubt Alcoa is putting their own self interest over the public interest, their petition just erased all doubts. They should be ashamed of themselves! Why is the media ignoring this issue?"
Alcoa states in the petition that it believes North Carolina officials acted erroneously and capriciously in delivering the terms of the water quality certification, the same charge it made regarding the fish consumption advisory. This is in spite of these facts:
• The N.C. Division of Water Quality, which is part of DENR, issued a report in May that acknowledges Alcoa is in violation of water quality standards for dissolved oxygen in the Project, that "significant contamination" exists at the Alcoa site where 47 hazardous waste sites have been identified and that some of the PCBs it found can be traced to Alcoa's operations.
• PCBs are probable human carcinogens and are associated with other health risks, including anemia; acne-like skin conditions; damage to the liver, stomach or thyroid gland; changes in the immune system or reproductive system; and behavioral problems. Because of those possibilities, the state always issues advisories for bodies of water carrying PCBs that urge pregnant women, nursing women and children under age 15 not to eat fish from them.
When he was appointed Yadkin Riverkeeper, Naujoks reviewed reports of existing contamination at Badin Lake, a 5,300-acre body of water that flows into the river in Stanly County via Narrows Dam. It is one of four reservoirs along a 38-mile stretch of the Yadkin River that comprise the Yadkin Hydroelectric Project. Reports of decades of pollution in the area associated with a now-defunct smelter Alcoa operated near it, including data that Alcoa discharged such contaminants as PCBs into the air, land and waterways, prompted Naujoks to investigate other items regarding the firm's activities.
After considerable discussions with all parties involved, Naujoks concluded that Alcoa was a major reason for the contamination at the lake and the river, and the company insufficiently planned to correct it as part of its license renewal application for the Yadkin Hydroelectric Project. Therefore, he opposes its relicensing effort, because his obligations as Yadkin Riverkeeper involve respecting, protecting, and improving the Yadkin Pee Dee River Basin, and Alcoa's application fails to meet these goals for the river. Its recent filings have only encouraged Naujoks in believing he is pursuing the right course for the Yadkin.
"Alcoa is asking for special treatment by the state, saying it does not have to abide by its regulations ," added Naujoks. "Let's face the facts - the river is contaminated, the contamination came from Alcoa, and Alcoa does not want to clean it up or address environmental problems related to the dam operations." Indeed, the surety bond amount the state requires in its certification is the very same figure Alcoa provided in its Relicensing Settlement Agreement in its federal relicensing application, as it had promised a $240 million investment to upgrade and improve the efficiency of its power generators at the Project.
"So what is wrong with guaranteeing that you will pay what you say you will pay - unless of course you do not really plan to do so, and sell your project license instead for a tidy profit? Alcoa has denied planning that, but the suspicious circumstances here indicate otherwise, unless officials can explain fully their turnabout on the permit's conditions. Many other North Carolinians await the news as well."
Alcoa must have a 401 Water Quality Certification from DENR in order to proceed with its federal application for another 50 years of overseeing the Yadkin Hydroelectric Project. The Yadkin Riverkeeper filed a motion May 29 to consolidate the appeal of the DENR certification with a similar appeal by Stanly County into one case with the N.C. Office of Administrative Hearings while the cases are pending before the state office. In the meantime, Alcoa continues to operate the Project on an extension of its 50-year license it received from the federal government in 1958.

Monday, July 20, 2009

Former Supreme Court justice beats the Guv

For Bob Orr, Courtroom 5A in the Wake County Courthouse was a happy place to be at midday on Friday. It was there that Orr, a former associate justice of the N.C. Supreme Court and now the executive director and senior counsel of the N.C. Institute for Constitutional Law, won a big one.

It was the first big courthouse win, in fact, for Orr and the institute, which has filed several lawsuits involving constitutional principles over the years since Orr retired from the Supreme Court almost five years ago after he wrote the majority opinion for a unanimous Supreme Court in the landmark Leandro schools case. The institute is one of a number of nonprofit organizations such as the John Locke Foundation that were created by and are financially supported by former state Rep. Art Pope, R-Wake, and his family to advance the cause of limited government and other libertarian principles. Orr has previously sued the state over its use of public tax resources to persuade businesses to bring plants to North Carolina and create jobs.

Orr and the institute filed a lawsuit earlier this year on behalf of Superintendent of Public Instruction June Atkinson. She was elected by the people to run the state's public schools but who had been relegated to serving as an "ambassador" to schools, as Gov. Bev Perdue put it when she appointed former Cumberland County schools superintendent Bill Harrison to the State Board of Education and called for him to be named chief executive officer of the state's schools. The lawsuit challenged whether the governor and the board could in effect alter the terms of the Constitution by transferring the superintendent's authority to the board. Hobgood ruled that Perdue and the board had violated her rights with an unconstitutional transfer of authority, and ordered that the board restore Atkinson's power to run public schools. The state is planning to appeal, but for now, Orr and the center have won a major victory.

Perhaps it's all the sweeter for Orr because in the 2008 election he ran for the Republican nomination for governor. Had he won the Republican primary (taken by Charlotte Mayor Pat McCrory), he would have run against then-Lt. Gov. Bev Perdue for governor in the general election. Orr didn't win the primary and thus didn't get to match up with Perdue, but it no doubt gave him some satisfaction not just to win the lawsuit in the trial court on a constitutional principle, but also to in effect beat Perdue and foil her model for school governance with an appointed schools chief. Of course, the result could turn around on appeal, but for now Orr is basking in the glow of a big win.

Moments after Hobgood announced his decision, I asked Orr to talk about his first big win. It's all about context, he said. The previous lawsuits were successful at least in airing an issue that hadn't gotten much legal discussion in a courtroom and heightened public understanding about key constitutional concerns. But judging by the grin on his face as he watched Atkinson talking to the press, it's a whole lot better to heighten public understanding when you've just whipped the opposition in court and won a big lawsuit.

Friday, July 17, 2009

Judge: School governance 'unconstitutional'

Judge Robert Hobgood ruled Friday that Superintendent of Public Instruction June Atkinson's authority to run the state schools bureaucracy cannot be transferred to an executive officer answerable to the State Board of Education without a Constitutional amendment approved by the state's voters. The current governance arrangement, he ruled, is unconstitutional.

The ruling in effect means that Bill Harrison, appointed to the State Board of Education by Gov. Bev Perdue and named its chief executive officer to run schools on a day to day basis, works for Atkinson now. Atkinson's job, among other things, will be to carry out the policy of the State Board of Education.

That may throw governance of schools into some disarray once again; the state will appeal Hobgood's ruling. And it leaves before the General Assembly a question that has been there for many years: If it wants to put accountability for public school performance closer to the governor's office, it will have to do so through a Constitutional amendment that the state's voters must approve.

Hackney puts brakes on Yadkin River Trust bill

Here's an interesting development on a Senate-passed bill that has pretty broad bipartisan support in the General Assembly to create a Yadkin River Trust that might one day own and operate the hydroelectric dams for which Alcoa Power Generating Inc. is seeking another 50-year license to operate: House Speaker Joe Hackney, a lawmaker with a strong environmental ethic whom many assumed would back the bill, has applied the brakes.

Rep. Cullie Tarleton, D-Watauga (and a former Charlotte broadcaster who now lives in Blowing Rock) is chairman of the House Water Resources and Infrastructure Committee. His committee has held two hearings allowing proponents and opponents of the Yadkin River Trust bill to have their say. He had planned another committee session next week with a vote on the bill. But Hackney called him and asked him to cancel the meeting, he said. The speaker did not give him a reason why, he said. (Just for the record, when a speaker requests a committee session be cancelled, it's something considerably more than a request, and legislators fully understand what it means. It's more like an order, but more politely put.)

I talked to Hackney last night about why he wanted the session cancelled, and it's still not entirely clear to me. I understood him to say that the bill has passed the Senate and thus still would be eligible next year when the legislature reconvenes. He thought it might be best to wait and see whether Alcoa got relicensed by the Federal Energy Regulatory Commission. He didn't perceive a need to rush. And a delay would give everyone the opportunity to work out a compromise. BUT, when I repeated my understanding of those words to make sure I followed what he was saying (he was on a cell on his way home, I was on a cell in my truck, and I could not hear perfectly and couldn't take notes) he seemed to say, well, not necessarily.

It was also unclear that Hackney was up to date on everything that had transpired in the water resources committee. When I told him that Deputy Attorney General Faison Hicks had testified in the committee this week that it would help the policy of Gov. Bev Perdue to stop the relicensing of the dams if the legislature were to approve the Yadkin River Trust first, Hackney said he had not known that the attorney general had taken that position. But it was clear that there will be no committee session next week, when Tarleton had told committee members that they would vote on the bill. But Hackney also noted that while there was a lot going on right now, lawmakers would still have time to consider important legislation.

He also told me that he and Sen. Fletcher Hartsell, R-Cabarrus and the prime sponsor of the Senate bill, had talked and that he and Hartsell wanted the same thing. I don’t think that’s correct. Hartsell wants the state to be able to recover the federal license that Alcoa has had for 50 years, and for the state to manage the water quality and quantity. I don’t think Hackney is to that point, yet anyway.

As anyone who has paid attention to the legislature knows, Speaker Hackney defies pigeonholing. While he is inclined to look favorably on environmental protection, he also has to contend with a lot of other issues, including legal and business ramifications of issues as well as the views of his membership, which can run the gamut from other there to over here. Because water quality and water supplies are two issues wrapped up in the Alcoa issue, many might assume that Hackney would go along with the Yadkin River Trust bill. Maybe he will, maybe he won't. But it sounds to me like he has not decided.

Thursday, July 16, 2009

Ticking off the judge

Wake County school board member Ray Margiotta didn't think much of the deal when former House Speaker Jim Black, serving a five-year-plus sentence in federal prison, was allowed to pay off half of a $1 million fine with the transfer of some land he used to own in Matthews. Margiotta is certainly entitled to his views, which no doubt were shared by a great many people who thought Black ought to have paid off the entire $1 million fine in cash.

Margiotta especially didn't like the arrangement because Wake County schools, the recipient of the proceeds after Superior Court Judge Donald Stephens levied the fine in 2007, got $500,000 in cash and the Matthews property assessed at $613,000. Margiotta noted that the Mecklenburg tax valuation was a fraction of that, about $149,000, and complained that the appraisal had been arranged by Black's family.

"We've got an appraisal done for a criminal," he had said earlier. "Give me a break."

Margiotta was exercising not only his First Amendment right to say what he thinks, but also his right to royally tick off the presiding judge.

As the News & Observer's Rob Christensen reports, Stephens was "livid at the remarks and summoned a Wake County School Board attorney to his court room to be chewed out. The judge called the remarks 'idiotic' and noted that he had not been obligated to levy any fine against Black."

Christensen wrote, "'It's like giving your daughter a Toyota and her saying,"Dad, I'd rather have a BMW,"'Stephens said. The judge said he would have to give serious thought to whether he would levy fines in the future that would benefit the Wake County school system."

Stephens made his remarks about the fine at a hearing in Raleigh Thursday morning in which he ruled that Black can serve his state sentence concurrently with his federal sentence -- but that even if Black gets time off from his federal sentence, he'll have to continue serving his state sentence.

AP Reporter Gary Robertson noted in his story today that Stephens said, "If that occurs, I will not reduce this sentence." The judge added, "He'll have to go to the governor to have it reduced."

Wednesday, July 15, 2009

Wind farms on Ocracoke? Nope

The state Senate has suspended debate on a bill to control the permitting of industrial wind farms, apparently over a dispute between competing environmental concerns in Western North Carolina. Some environmentalists, and others, want to be able to put commercial wind turbines on mountain ridges, where they'll get the best winds, to help generate alternative, sustainable energy; other environmentalists, and others, want to keep them off the ridges because wind farms with turbines soaring into the sky would mar the view and destroy what's unique about the mountains.

This dispute caused Democrats to interrupt Senate debate Wednesday afternoon, and finally to return the bill to a Senate committee.

The bill at the moment allows commercial wind farms in coastal areas -- offshore, or in the sounds, but not in parks, national seashores or other inappropriate places. The current bill also restricts commercial wind turbines in Western North Carolina -- barring them from ridge tops, to comply with the 1983 ridge law preventing tall structures.

Sen. Steve Goss, D-Watauga, wanted to allow them in certain ridge top areas; Sen. Martin Nesbitt, D-Buncombe, was against that, but would allow them in other areas as well as smaller windmills for single family residences.

Nesbitt argued that the plan for allowing wind farms on the coast prohibited them in national seashores and on the state's barrier islands; the law also ought to ban them on the state's magnificent ridge tops.

As he put it, lawmakers would not allow wind farms at Kitty Hawk near the Wright Brothers Memorial, nor would it allow them on Ocracoke Island, nor would it allow them on top of the Cape Hatteras Lighthouse. "They're national treasures," he said. "If they damaged our crown jewels along the coast, I dare say we'd be here voting no."

Tuesday, July 14, 2009

Perdue: Regulate utilities' coal-ash ponds

Gov. Bev Perdue is calling for legislature to regulate power companies' coal ash, the leftover waste from coal-fired power plants. Utility companies have opposed more regulation of coal ash ponds, though more recently they have embraced the idea of some regulation, following public reaction after last winter's breach of a holding pond in Tennessee that released a toxic tide of coal-ash slurry.

Duke Energy has a number of the ponds, including several near Mountain Island Lake, Charlotte's water supply.

The Environmental Protection Agency recently announced that North Carolina has more than one-fourth of the nation's high-hazard coal-ash ponds -- defined as ponds where a failure could mean deaths.

Perdue is backing legislation sponsored by Rep. Pricey Harrison, D-Guilford, to bring about more state monitoring and regulation of coal ash ponds and make them subject, at long last, to the state Dam Safety Act. Here's Perdue's announcement earlier this afternoon:

RALEIGH – Gov. Perdue today urged state lawmakers to pass legislation that would increase the safety oversight of coal ash ponds in North Carolina. The legislation would subject the dams that create coal ash ponds to direct inspection by the N.C. Department of Environment and Natural Resources.
“Because of where some of the ponds are located, greater safety oversight and more frequent inspections will help reduce potential risks,” said Gov. Perdue.
A “high hazard” designation was created in the 1980’s for coal ash impoundments and other similar dams that are near densely populated areas or downstream water supplies because of the potential impact of a dam’s failure. The designation does not reflect the structural condition of the dam.
Currently, power companies are only required to file reports every five years by private engineers on the structural conditions of the dams. The impoundments are exempt from regulation under the N.C. Dam Safety Act.
The proposal will be sponsored by Rep. Pricey Harrison of Greensboro and will subject coal ash dams to the Dam Safety Act, which would more closely regulate the impoundments and would require a state inspection every two years.

Monday, July 13, 2009

Readers weigh in on Perdue tax proposals

Readers of Sunday's column on the state budget shortfall noticed that a url link to Gov. Bev Perdue's proposed tax changes wasn't working, so here's a link.

Look on the third page for the 37 tax changes she suggested the legislature consider. Meanwhile, readers weighed in:

A Statesville reader wrote:

I have not seen any empirical data to support my opinion but I feel quite sure if the legislature were to add the service industries sector to the sales tax base, the sales tax rate could be reduced and probably give the citizens of NC a reduction in their income tax rate as well. Many other states in which I have had personal dealings, SC for one, have long charged a sales tax on services rendered. In one sense of the word, it is user friendly. If you don't buy the item, you don't incur the tax or in this case if you don't want the service you don't have to pay the tax.
The citizens of NC have a large enough tax burden as it is.

To add another 1 cent along with one of the highest state income burdens in the country is not right. Just as is not right to be building a $25,000,000 pier and taking over $100,000,000 from the Clean Water Management Trust Fund to be used for general budget needs. We need to get it right in Raleigh. There have been too many years of the "good ole boy" network getting a pass. I trust you will use your pulpit to ferret out the wrongs of the past and see that all citizens of this great state get fair and equitable treatment.

A good example of the unfairness is the fact we have no roads in the Charlotte Metro area. If the folks in Raleigh had this problem, they would go crazy. I hate to say this, because it would certainly tend to divide, but the folks from Greensboro to Charlotte need to come together to break the grip that eastern NC has on the politics, influence, and flow of money in this state.

We used to have good government in the days of Skipper Bowles, and the legislature was responsible in its fiduciary capacity to its citizenry. That is no longer the case. It is now all about special interest and not what is best for the state as a whole. North Carolina used to be looked at as a beacon, our light no longer shines.

And a Charlotte reader wrote:

It seems uncanny the way recent North Carolina governors time their inaugurations to coincide with budget disasters. At this point, the Governor and the General Assembly may have no recourse but to raise the income and sales tax rates. Doing so would be much less harmful than laying off more teachers.

I believe, however, the GA (though, of course, not Governor Purdue) at one time had available at least one option that could have averted much of the current fiscal disaster. Back in 2003 the GA could have bought an insurance policy against budget shortfalls by paying a relatively (relative to the current shortfall) small premium each year into North Carolina's Rainy Day Fund. The Fund was anemic, even before the Governor and GA withdrew funds last fiscal year. Back in 2002 the Governor's Commission to Modernize State Finances included a report providing evidence of the problem (copy attached). You may recall that one Commission recommendation called for a sizable increase in the Fund.

If the GA had increased Fund contributions back in 2003, North Carolina would be in a much better fiscal position this biennium. Probably many fewer teacher layoffs would have been necessary. It is hard not to think how much better off we would be today, had the GA taken the Commission's recommendations to heart.

Friday, July 10, 2009

U.S. Attorney for the Easley District of N.C.?

Sen. Kay Hagan, D-N.C., has made recommendations for new U.S. Attorneys for the Eastern, Middle and Western districts of North Carolina. Barbara Barrett has the story here. Sen. Kay Hagan, D-N.C., has made recommendations for new U.S. Attorneys for the Eastern, Middle and Western districts of North Carolina. Washington Correspondent Barbara Barrett has the story here.

That may surprise folks who recall that she wants U.S. Attorney George Holding, a Republican, to stay on in the Eastern District to complete inquiries of public officials, including former Gov. Mike Easley and former Sen. John Edwards, both Democrats and both under fire. But Hagan wants Holding to keep on those cases while President Obama names someone else to take over all other duties in the U.S. Attorney’s office.

Here's a copy of her letter to President Obama recommending three for each job, including Peter Anderson, Danny Davis or Anne Tompkins for U.S. Attorney in the Western District, which includes Charlotte. Among the nominees in the Middle District are Superior Court Judge Ripley Rand, son of powerful N.C. Senate Majority Leader Tony Rand, D-Cumberland, and in the Eastern District, one nominee is Hampton Dellinger, former legal counsel of Gov. Mike Easley and a partner in the Charlotte firm of Robinson, Bradshaw and Hinson.

In her letter, Hagan told the president she believes Holding should remain on the job "to complete the ongoing investigations of public officials in the state" while someone else takes over the job of handling other matters.

Perhaps that would make Holding the U.S. Attorney for the Easley District of North Carolina. Or the Easley/Edwards District?

Wednesday, July 08, 2009

Best places to stand in North Carolina?

My colleague Mary Newsom has pointed readers to the fun in coming up with a list of best places to stand in Charlotte.

And here's a Web site that invites readers to vote on the 100 best places to stand in the United States.

But I was disappointed to see that only one N.C. attraction -- the Cape Hatteras Lighthouse -- made the list of nominees for the 100 best places.

What would you put on the list of best places in North Carolina to stand?

Here are a few thoughts, in no particular order:

1. On the deck of a 37-foot sailboat at anchor in Silver Lake harbor at Ocracoke Island

2. Ankle deep in the waters of Hatteras' Cape Point -- with the Hatteras Light in the background.

3. On the 50-yard-line at Kenan Stadium late on a fall Saturday afternoon.

4. On the sidewalk in Pinehurst any day between Thanksgiving and Christmas.

5. In the bleachers at the Durham Bulls Athletic Park on a summer evening.

6. In Duke Chapel, after a stroll in Duke Gardens, any sunny day.

7. On top of Mt. Mitchell on a snowy day in August. Well, a flurry, anyway.

8. Atop Chimney Rock on a clear day.

9. On the second floor of the state Capitol, listening to a choir singing under the dome.

10. Sitting at a Formica-topped table (okay, standing at a counter) at any of two dozen good N.C. barbecue joints. I'd start in places like Lexington, Kinston, Greenville, Ayden and Goldsboro.

The list goes on. What's on your list?

Tuesday, July 07, 2009

Sustainable energy? Get wind of this

What started out as a bill to give the Department of Environment and Natural Resources the authority to issue permits for large electricity-producing wind turbines -- and preventing their location on ridgetops blocking views in Western North Carolina -- wound up as a much different bill in the Senate Agriculture, Environment and Natural Resources Committee Tuesday. The committee adopted a substitute bill, dropping the language dealing with ridgetop wind turbines in the western part of the state, and keeping a section giving permit-granting authority to the Coastal Resources Commission to allow construction of wind turbines along the coastline. Sen. Charlie Albertson, D-Duplin, said the committee will try to deal with the western N.C. sites later on, but wanted to get the permits bill rolling now.

The revised bill allowing coastal area wind turbines would grant permits only after a study of the effects of noise from the turbines, unless they were at least 0.60 miles from a shoreline, and a study of "shadow flicker impacts" unless they were at least 1.6 miles from the shoreline. These features are designed to deal with complaints from neighbors of wind turbines in other states about the strobe-like flickering on sunny days caused by turning of the blades, and the noise problem that some residents have described as like a constant running of a dishwasher.

The bill originally would have banned the sometimes-400-foot-tall turbines from mountaintop ridges. Attorney General Roy Cooper's office opined a few years ago that the state's Ridge Top Law, designed to stop the construction of hotels, condos and other tall structures on mountain ridges that would interfere with the viewscape, prevented construction of the huge turbines -- though it clearly allows windmills of the size more commonly associated with small farms. As Sen. Joe Sam Queen, D-Haywood, put it, "I do think North Carolina has some opportunities with wind -- particularly at the coast." Senate President Pro Tem Marc Basnight, D-Dare, is especially interested in building windmills in coastal areas, perhaps the state's large sounds that are somewhat protected from the ocean's severe weather.

But some legislators such as Sen. Ellie Kinnaird, D-Orange, believe a ban on wind turbines in Western N.C. conflicts with state law requiring development of new, sustainable energy sources. She’s disappointed that the bill doesn’t recognize places where wind turbines and wind farms -- industrial concentrations of wind turbines -- could be built in the western areas where winds are strong, and said she’s glad to hear of Albertson’s hopes that the bill eventually will address that issue.

Monday, July 06, 2009

Yadkin River Trust bill up for hearing Tuesday

A state House committee has scheduled a hearing for tomorrow on a Senate-passed bill that would create a Yadkin River Trust to operate the hydroelectric plans now owned and operated by Alcoa Power Generating Inc. The hearing before the House Water Resources and Infrastructure Committee on Senate Bill 967 will be at 2 p.m. in room 1228 of the Legislative Building in Raleigh -- but it's notable that no action is planned. The House calendar says the session will be for discussion only. If the bill get the committee's approval, it will also have to go to two more committees -- the Public Utilities Committee and the Finance Committee -- before it can go to the House floor for consideration by the full House.

The bill has a formidable journey before it, in other words, especially at this juncture of the 2009 session. On the other hand, the House and Senate don't seem to be rushing to a conclusion. They're at odds over how to raise more revenue to balance the 2009-10 budget, and no once expects a quick adjournment. For another thing, this bill has a remarkable coalition of Republicans and Democrats favoring it. In the Senate, it included Majority Leader Sen. Tony Rand, D-Cumberland, and Minority Leader Sen. Phil Berger, R-Rockingham. In the House, the bill's backers include former House Speaker Harold Brubaker, R-Randolph, and Rep. Paul Luebke, D-Durham, senior chairman of the House Finance Committee. There are a lot of Republicans and Democrats behind this bill, which indicates that it isn't a partisan political battle.

It's a fascinating subject because it involves a legislative attempt to create a way to recapture the Yadkin River hydroelectric generating plants that Alcoa and its predecessors have operated for a long time on the Yadkin. Alcoa once employed as many as 1,000 people at its Badin aluminum smelter, but the plant is closed now and there is a relative handful of employees left. Alcoa sells the power it generates on the open market; those backing the bill in the legislature want the Federal Energy Regulatory Commission to deny issuing another license to Alcoa to continue operating the plant. Its 50-year license expired last year, and the company is close to getting a license renewal. But lawmakers backing the Yadkin River Trust don't think the company should be allowed to continue operating the plant without the significant workforce it once had. They point to the 1957 licensing process when the employment was cited as a major reason for granting the license.

It's also interesting from this standpoint: Alcoa is a going business and if the bill becomes law it would put the state in the position of purchasing and operating a business whose owner doesn't want to sell. But the Federal Power Act has long contemplated the "recapture" of a facility on public trust waters if a license is denied. That clause has never been invoked, and this could be the first time. What's not clear is how much the recapture would cost -- and how it would work out financially.

Gov. Bev Perdue has intervened in the federal process, and likely would sign the legislation creating the Yadkin River Trust if it passes the legislature.

Thursday, July 02, 2009

Head of Water Rights Committee resigns

The head of the N.C. Water Rights Committee, Raleigh City Council member Nancy McFarlane, has resigned. It apparently was related to the committee head's reluctance to answer questions recently when Carolina Journal inquired about the group, which opposes a new Federal Energy Regulatory Commission license for Alcoa Power Generating Inc. on the Yadkin River. It's a hot topic because a bipartisan group of legislators proposes a Yadkin River Trust to eventually buy and take over operation of Alcoa's hydroelectic plants on the river.

David Bracken of the N&O has the story.

Bracken reported, "In an interview conducted before McFarlane's announcement, Roger Dick, one of the founders of the N.C. Water Rights Committee, said her lack of openness is not helping the organization.

"We don't need people being suspicious about the N.C. Water Rights group," said Dick, who lives in Stanly County and is the CEO of Uwharrie Capital, a holding company for several banks. "We didn't maybe make the best choice right now with having Nancy as the president of the water rights because her political platform, I guess, is getting in the way of this."