This afternoon, the House Committee on Water Resources and Infrastructure defeated Senate Bill 967, Yadkin River Trust.

The bill, establishing a state trust to acquire and operate four hydroelectric dams on the Yadkin River owned by Alcoa, passed the Senate 24-4 in May. 

Alcoa operates the dams under a 50-year license from the Federal Energy Regulatory Commission which expired in 2008 and is up for renewal. The license probably would have been renewed without a hitch had former Gov. Mike Easley not intervened in April 2008, citing concerns from some local governments about the project.

In the House, the bill ran into trouble over several concerns. First of all, the state could not take control of the project without a FERC license. Had Alcoa won a renewal, and the bill passed, would North Carolina have to undergo the full application process, or would the feds transfer the license from Alcoa?

There were also worries about the powers granted to the trust — which, for starters, gave it the ability to sell revenue bonds and build, buy, sell, and operate the hydroelectric dams without any oversight from the North Carolina Utilities Commission.

It was also likely that any takeover would land in court, because Alcoa does not want to sell for the price the state was likely to offer. Alcoa valued the project at $500 million; the state placed the value between $24 million and $176 million.

At today’s meeting, Rep. Mitch Gillespie, R-Burke, offered a Proposed Committee Substitute (PCS) that would have limited the role of the trust. Its goal would be only to attempt to acquire the FERC operating license; if successful, the trust would have to operate under the same rules that applied to Alcoa. (No revenue bonds, for instance.) The trust would have to get operating funds from the General Assembly. And if FERC renewed Alcoa’s license, the trust would be dissolved.

The PCS was defeated by a 6-8 vote, effectively killing the legislation.

Read more about the Alcoa dispute here.

UPDATE, JULY 29: This morning, the Stanly County Board of Commissioners issued an odd press release praising the committee for keeping the bill alive:

STANLY COUNTY, N.C. ? The Stanly County Board of Commissioners (www.co.stanly.nc.us
) has expressed its appreciation to the members of the N.C. House Water Resources and Infrastructure Committee for continuing to give careful study to Senate Bill 967. By a narrow vote, the Committee chose not to transfer the legislation to another committee. Instead, the Committee voted to keep the bill and thus, preserved the ability to conduct further hearings and ultimately send the legislation to the full House for a vote.

JLF’s Becki Gray has learned it’s possible that, before the end of the session, a committee member could request reconsideration of the bill. It’s also possible the House leadership could bypass the committee entirely and bring the bill directly to the floor for a vote. The takeover legislation is a priority for Gov. Bev Perdue, so stay tuned.