By Mark Wineka
mwineka@salisburypost.com
State Sen. Stan Bingham, R-Denton, has introduced a bill that would allow Stanly and Davidson counties to impose a privilege license tax on hydropower companies, which would include Alcoa Power Generating Inc.
Alcoa issued a press release Monday citing its objections to the bill.
“If this bill passes,” said Gene Ellis, licensing and property manager for Alcoa Power Generating Inc., “we believe other counties will be lining up at the General Assembly, seeking permission to create all sorts of new taxes.
“In this economic environment, it just doesn’t make sense. Our state leaders should focus on measures that will make North Carolina more friendly to private business.”
Bingham’s Senate Bill 569 was filed and referred to the Senate Finance Committee last Thursday.
Alcoa charged the legislation appeared “to be another attempt by Stanly County to push for the takeover of the Yadkin Project.”
The hydroelectric project with its dams and four reservoirs covers 38 miles of the Yadkin River and includes High Rock Lake. It is one of 22 privately owned hydropower projects in North Carolina.
Alcoa says Stanly County officials have described the privilege tax as a “Plan B,” if they fail to win support for a “state trust” concept calling for the state to condemn the Yadkin Project.
The state trust concept would cost N.C. taxpayers hundreds of millions of dollars, plus $240 million needed to upgrade the dams, Alcoa says.
Alcoa continues efforts to renew its 50-year license to operate the hydroelectric project with the Federal Energy Regulatory Commission. Stanly County officials have strongly opposed the relicensing.
Bingham and three others ó Sen. Fletcher Hartsell, R-Concord; Sen. William Purcell, D-Laurinburg; and Sen. Daniel Clodfelter, D-Charlotte ó also are sponsors for Senate Bill 568, which would allow Davidson and Stanly counties to impose a privilege license tax on businesses that require significant withdrawals “from local water resources.”
That bill says the counties “may levy an annual privilege license tax on a business that withdraws from local water resources at least 10 million gallons of water a day.”
Alcoa has said the proposed privilege taxes could hamper N.C. efforts to be a national green energy leader and attract companies in the renewable energy industry.
Hydropower accounts for 20 percent of the world’s energy and is widely regarded as the cleanest form of renewable energy, Alcoa said.
“North Carolina passed a landmark renewable energy bill in 2007 that requires utilities to significantly increase their use of renewable energy by 2012,” a company statement said. “In addition, the state has established a ‘Green Business Fund’ that provides tax financial incentives to companies developing renewable energy technologies.
“It’s disappointing that North Carolina would consider forcing companies that generate hydropower to pay additional taxes, especially at a time when generating clean, renewable energy is a high priority with voters.”
Stanly County officials have cited concerns with water quality in the reservoirs, contamination of sites connected to Alcoa’s past Badin Works aluminum producing operation and giving a private company another 50-year license on public waters.
Opponents to the relicensing have called for the state to manage the hydroelectric project to create jobs and also clean up the waste sites.
Alcoa counters that it is working to redevelop the closed Badin Works site and has already spent $10 million to remediate old waste sites associated with its former operations.
“Alcoa has acknowledged that it has a permanent, legal responsibility to manage waste sites in a responsible manner that will protect public health,” the company said. “Taxpayers will never be asked to pay for the cost of remediation.”
In a March 2 letter to Gov. Beverly Perdue, Albemarle Mayor Elbert Whitley expressed concerns that the county’s opposition to APGI would discourage other businesses from locating In North Carolina.
Whitley said Stanly County commissioners have spent $965,000 in taxpayer money trying to take over Alcoa’s four dams.
“Why is this issue even on the table?” Whitley asked. “The only true consideration is greed, and I am appalled that the state of North Carolina is buying into this type of thinking.”
Whitley told the governor Stanly County’s efforts have implications for Duke Energy and Progress Energy, both of which have hydroelectric projects in the state.
The city of Albemarle depends on the Yadkin Project reservoirs for water, which it also sells to Oakboro, Pfeiffer University, Misenheimer, New London, Richfield and other parts of Stanly County.
“We have been very fortunate that Alcoa over the years has impounded the water with their dams, and we would consider Alcoa to have been good stewards of the water,” Whitley said in an April 29, 2008, letter of support for Alcoa which he included in his recent correspondence to Perdue.