RELICENSING ISSUE:
FEDERAL TAKEOVER OPTIONS

• What The Law Says
  There is a process that could allow the federal government to take over hydroelectric projects when a license expires.  Such an effort requires an act of Congress.  The federal government has never exercised this option, and legal experts say it is unclear whether FERC’s regulations regarding a takeover are legally valid or whether they would result in an unconstitutional taking of property.
  
  
• The Deadline For A Federal Takeover Has Passed
  A recommendation to take over a hydroelectric project must be made within two years of expiration of the current license, or by the end of the comment period specified in the notice of the license application.  In the case of the Yadkin Project, the deadline to recommend a takeover of the project was June 25, 2006 — more than two years ago.
   
• FERC: Takeover Is Not A Reasonable Option
  FERC staff issued a Final Environmental Impact Statement in April 2008 that clearly stated a federal takeover is not a reasonable option and will not be considered further.
  
  
• Takeover Would Require Significant Tax Dollars
  In the event of a takeover, the Federal Power Act would require the government to pay Alcoa-Yadkin for the “net investment” of the Yadkin Project plus “severance damages.”  It is difficult to determine the potential amount of “severance damages” because there has never been a federal takeover of a private hydropower project.
  
  
• The “Recapture” Argument
  Stanly County and others frequently use the term “recapture” instead of “takeover” to describe its efforts to take control of Alcoa-Yadkin’s hydroelectric business.  They claim that a “recapture” does not involve the taking of Alcoa-Yadkin’s property — it simply recaptures the right to control the water in Yadkin River.  But no matter what you call it, the process involves the taking of Alcoa-Yadkin’s private property, including four dams and powerhouses built and paid for by Alcoa-Yadkin with no government assistance.