Alcoa, North Carolina Meet in Court to Decide Who Owns a Riverbed

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According to a Charlotte Observer report, US District Judge Terrance Boyle must soon decide whether to rule in a lawsuit pitting the state of North Carolina – its governor, attorney general and other officials – against Alcoa Inc. over the right to control the water and electricity coming from the state’s second-largest river system.

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The argument is over who owns 40 miles of the Yadkin River bottom, on top of which Alcoa and its predecessor built 4 hydroelectric power dams in the early 20th century. Alcoa says they bought the land along the river banks from private landowners and have always felt that the sales included the riverbed between those banks. North Carolina asked Boyle to rule that the state has always owned the riverbeds since it entered the union following the American Revolution.  The Yadkin flows nearly 200 miles from the Appalachian foothills south through central North Carolina and becomes the Pee Dee River before entering South Carolina on its route to spilling into the Atlantic Ocean.

Boyle called the lawsuit “a case of significant import,” but didn’t announce when he’d issue a ruling on whether the case goes ahead to a trial.

I’ll say. Alcoa built the dams prior to World War I to power an aluminum smelter that employed thousands before closing in 2007. Since then, it has sold the electricity to commercial customers and the dams have generated sales of about $30 million over the year ending in September 2013. The state would acquire landowner rights and a cut of the profits if Boyle rules in its favor. Gov. Pat McCrory (R) backed the lawsuit filed by Attorney General Roy Cooper last year.

Should he rule in Alcoa’s favor, the company can continue to sell clean electrical power to the highest bidder. McCrory joined his Democratic predecessor, Beverly Perdue, in opposing a new federal license letting Alcoa run the dams for another 50 years. Both governors say inexpensive energy from the dams could generate thousands of jobs and that the river’s water is important to supply North Carolina’s 9.5 million residents.

One does, however, have to wonder if the state would have brought this lawsuit had Alcoa merely continued to use the dams to supply power to the smelter rather than started selling it on the open market. Alcoa attorney Mike McCool said any state ownership of the riverbed was lost long ago because state officials failed to claim it until McCrory brought his lawsuit in 2013. Alcoa estimated in 2006 that the dams generated almost $44 million a year in revenues. Over 50 years, that could mean revenues of more than $2 billion.

If the river’s water was, indeed, so important to the residents and the state, why have the dams been allowed to operate unchecked for nearly a century? And would this action have taken place if the smelter was still running?

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