-
Complete control of the natural resources of the Yadkin–Pee Dee River basin was given to Tallassee Power Co in the early 1900’s to develop for Hydro Power generation.
-
In 1928 Tallassee Power and Carolina Power entered into a 99-year legal agreement to construct High Rock reservoir and use it to regulate the flow of the Yadkin-Pee Dee River to the extent possible. This agreement was unchangeable for at least 40 years, automatically renewed and was binding to all successors. Carolina Power agreed to pay Tallassee Power $100,000 per year as a Headwater Benefit payment for supplying a regulated river flow at the highest possible rate. The legal agreement included provisions that would allow Tallassee to deviate from the agreement in the event of drought or by simple agreement between the two companies.
-
The Aluminum Corporation of America bought Tallassee Power before High Rock Lake was completed and they finished the project. This resulted in the creation of a 15,000+ acre lake with 395 miles of shoreline, the second largest impoundment in NC. While High Rock Lake is a very large reservoir it is relatively shallow having an average depth of only 16 feet. The generating capacity at High Rock Lake and Badin Lake allowed them to produce power for their aluminum smelting plant at a very low cost since the fuel for their generators was “free” to them. There were virtually no restrictions on how the project could be managed.
-
The Federal Power Commission (FPC) initially licensed Project 2197 in 1958. The goals of the Commission were to maximize the amount of power that could be generated and ensure the economic viability of the project. This is not surprising since the “License Administration” fee they receive annually from all licensees is based on the amount of power they generate. The existing agreement was approved as an acceptable Headwater Benefits Agreement as required by the FPC regulations. The license was issued for a 50-year period based on Alcoa’s contention that the average life expectancy of their facility was 25 years. This guaranteed them a cheap source of power through at least two life cycles of the facility. Once this license was issued, Alcoa was completely exempt from future regulations and legislation for the duration of the license.
-
For 40 years High Rock Lake was managed solely for power generation with little consideration for the environment, the impact on fish and wildlife, or the economic impact to the communities surrounding the lakes. During this period, many parcels of land surrounding High Rock Lake were sold to developers by Alcoa as vacation/resort property. For many years, the citizens of NC complained to the Federal Energy Regulatory Commission (FERC) about the way High Rock Lake was managed. Because there were very few restrictions on what Alcoa was allowed to do, there were no penalties to impose.
-
On January 8, 1968 , only eight days after the first time the Headwater Benefits agreement could be modified, Alcoa Aluminum requested an amendment to their license. This amendment included “limits” (generally considered to be maximums) on how much water they could discharge from High Rock Lake during the recreation season. It also included a drawdown schedule that allowed High Rock to be drawn down as much as 24 feet (177% of the average depth of the lake) while keeping the rest of the lakes downstream relatively full. They advertised it as a change that would be beneficial to the recreational interests at High Rock Lake to convince the general public to support the change. What they did not disclose to the general public was the fact they were also requesting an amendment to the Headwater Benefits agreement. The subtle wording differences in the two requested changes effectively made the “limits” they were requesting in their license, a minimum discharge requirement for High Rock Lake . This change was not advertised and took away the rights of defined stakeholders to comment on or protest this change. The combined changes allowed them to establish river flow and lake discharge conditions that protected the minimum amount of power they were allowed to produce without regard to the environment and without providing any environmental impact studies.
-
Over the next 30 years, many changes occurred in the power generating industry. Many new environmental regulations (the Environmental Policy Act) were enacted that affected the operations of fossil and nuclear fueled power plants as well as the volatility of the price of the fuels they used. Hydropower facilities continued to enjoy exemptions from new regulations as well as unlimited usage of the “free” fuel they used. With the deregulation of the power industry, power brokering became VERY profitable. The operations of the project were changed from supplying power to the Aluminum plant to being a free market peaking facility. This allowed Alcoa to greatly increase their profits by brokering their power at premium prices during peak demand hours. This mode of operation creates very unnatural river flow conditions downstream with excessively high flow rates during the day and drought conditions at night and on weekends.
-
In 1986, the Congress of the United States recognized that excessive control of the natural resources belonging to the citizens of the US had been conveyed to private industry. They enacted the Electric Consumers Protection Act, which requires the FERC to give equal consideration to the environment, recreation, fish and wildlife, and other nonpower values that it gives to power and development objectives in making a licensing decision.
-
The state agencies and politicians of SC began planning their strategy to protect the resources of SC in the mid 1990’s. They funded a USACE study to establish the need for changes to the operations of the hydroelectric facilities in NC to benefit the environmental and economic interests of SC.
-
The drought of 1998 – 2002 proved the current operating guidelines were grossly inadequate to protect the environment in the river basin and allowed High Rock Lake to be almost completely drained while maintaining every other impoundment below it at near full pool. While High Rock Lake was being devastated, power generating profits continued to climb right up to the time the High Rock dam was closed by the environmental experts. Several fish kills occurred as the waters receded and much of the wildlife living around the lake was severely impacted. Local citizens banded together and inundated the FERC with complaints and concerns about the environmental indifference occurring at High Rock Lake . The state officials in SC immediately lobbied for changes beneficial to SC by filing requests to the FERC through their most powerful politicians. During that period, other notable hydroelectric power producers proactively modified their generation schedules to help protect the environment in their projects. Duke Power managed their Catawba River basin projects very effectively, resulting in minimal impacts to their 13 impoundments while maintaining adequate river flows below the project.
-
The Badin Works plant has been unprofitable for Alcoa for many years. They initially closed the plant down in 2002 but have now resumed minimal operations with a greatly reduced staff, minimizing the positive economic contribution their facilities have on NC communities. The only reason to keep the plant open at all is to justify some of the issues that will be raised during relicensing. Once their new license is issued there is a very high probability the plant will be closed for good.
-
During the next 18 months representatives from state agencies and recognized stakeholder groups will be involved in helping define the terms and conditions that should be included in Alcoa’s new license to operate Project 2197. The operation of High Rock Lake is the controlling factor of the Yadkin-Pee Dee River from Davidson County NC to Myrtle Beach , SC. The way High Rock Lake is operated has a profound effect on not only the citizens of Davidson and Rowan counties, but on hundreds of thousands of people, many industries, recreational opportunities, tourism, and a vast array of fish and wildlife throughout the remainder of the river basin. Many of the industries located along the river in SC chose their location based on the leniency of the regulations in SC on wastewater assimilation. While many changes will be required to comply with today’s environmental regulations there are many aspects that are somewhat subjective and will be negotiated between Alcoa, state agency officials and representatives of recognized stakeholder groups. At this point in time Alcoa has not committed to negotiating settlements on issues raised during the relicensing process, even though negotiated settlements are most likely to be approved by the FERC. If they feel that an issue is likely to be highly controversial, they will simply submit their request to the FERC and note the opinion of opposing groups in the official record submitted. This will result in someone in Washington , DC who may never have been to NC making decisions that will affect NC and SC citizens for the next 50 years with little to no recourse.
-
Since 1928, High Rock Lake has been managed solely for the profit of private industry and their stockholders with little regard for the environment, the economic impact to the communities surrounding it, or the recreational interests stated in the Electric Consumers Protection Act of 1986. While it would be foolish not to utilize the environmentally friendly power generating capabilities of the river, it must be done in an environmentally correct fashion with full consideration for all affected stakeholders within the river basin. If managed properly High Rock can be used to protect the environment within the river basin, the economic interests throughout the river basin, drinking water supplies for many communities, as well as the preservation of recreational opportunities and safety. To accomplish this, operational guidelines based on watershed management principals, not just power production, will have to be established. There will have to be very specific rules included to address periods of drought that will require early implementation and will maintain as much water as possible at the highest points in the river basin to allow for potentially prolonged protection needs of the rest of the river basin. Depletion of those reserves must be managed proportionately throughout all of the impoundments to protect the environment and ecosystem at each. Once the reserves upstream have been unnecessarily released, any excess simply flows into the ocean and is effectively lost.
-
The state officials in SC fully understand the impact the rules included in Alcoa’s new license can have on the natural and economic resources in their state. They are fully prepared to provide whatever political influence or legal resources are necessary to ensure changes are made that are beneficial to their state. They are intent on influencing as many changes as possible in Alcoa’s new license and have already discussed the possibility of legal action if they are unhappy with the results of the relicensing process. To ensure the future protection of the environment and the economic interests of the citizens of NC, we will NEED the support of our elected legislators. Without it, the future of many NC citizens and communities will be at the mercy of SC officials.
