FERC staff in 2008 made recommendations in the Final Environmental Impact Statement (FEIS) on arguments which continue to this day.
Jobs and Allocation of Low-Cost Power
As noted previously, the Yadkin Project’s provision of inexpensive power to the aluminum industry indirectly supported hundreds of local jobs in the past. However, the scaling back of that industry in Stanly County has eliminated most of those jobs. In Stanly County, industrial employment has declined in recent years in part due to closure of the Badin Smelting Works. In its comments on the draft EIS, Stanly County indicated that there were more than 900 jobs associated with the Carolina Aluminum Company’s aluminum operations in 1958, and that Alcoa, Inc. currently employs fewer than 70 people in the county. To help address this loss of employment, Stanly County recommends that the Commission consider in this EIS an alternative that would offer inexpensive, cost-based power from the Yadkin Project to support the local economy and jobs. Stanly County also recommends that the EIS acknowledge the negative effects of Alcoa Generating’s proposal to instead sell the power at market prices for the benefit of its shareholders.
Alcoa Generating’s proposal for power allocation would depend on market-based forces, while Stanly County is recommending that power be offered locally at below market prices to support local economic development. The Commission’s policy on wholesale electric energy issues is that an open-market mechanism is the most appropriate and efficient means of allocating wholesale electric energy in the United States. Providing cost-based power to local entities would simply shift the power related benefit to local entities and away from those who would otherwise purchase the power. There would be no net benefit overall.
We recognize Stanly County’s desire to improve local economic conditions, and understand that the low-cost power previously provided to the smelting operation supported many jobs in the area. However, we also recognize that the factors affecting the aluminum industry go much beyond the cost of power. Closure of the smelting operation would have been tied to market forces that include the demand for and price of aluminum in global markets, the supply of and cost of raw materials, transportation costs, the number and market power of competing companies, and other factors. We do not view the decisions made by businesses that have used project power, however negatively they have affected the local economy, as a project effect. Thus, it is not incumbent upon the project to remedy that effect.
Federal Government Takeover
We do not consider federal takeover to be a reasonable alternative for the Projects. Federal takeover of the Projects would require Congressional approval. While that fact alone would not preclude further consideration of this alternative, there is currently no evidence showing that a federal takeover should be recomended to Congress. No federal agency has suggested that federal takeover would be appropriate, and no federal agency has expresed an interest in operating the Projects.
Recommendation (Executive Summary)
Based on our independent analysis of the Yadkin Project and the Yadkin-Pee Dee River Project, incuding our consideration of all relevant economic and environmental concerns, we conclude that issuing new licenses for the Projects as proposed by Alcoa Generating and Progress Energy, along with Staff's modifications and additions to those proposals, would be best adapted to a comprehensive plan for the proper use, conservation, and development of the Yadkin and Pee Dee rivers.