After nearly a century generating power in North Carolina, aluminum maker Alcoa is selling its four hydroelectric dams along the Yadkin River. The buyer is a Maryland company that bills itself as a producer of clean energy.
Alcoa originally built the dams to power its Badin Works smelter on Badin Lake. After shutting the smelter in 2002, the company began selling the electricity, and that became a profitable business.
But the dams don’t really fit with Alcoa's main businesses producing aluminum and aluminum products. In a quarterly earnings report Monday, the company called the Yadkin Project a "non-essential asset."
So it's selling the High Rock, Tuckertown, Narrows and Falls hydroelectric plants to a Maryland company called to Cube Hydro Partners. The sale price was not disclosed.
Cube specializes in hydro power, mostly in the Northeast. It's led by Kristina Johnson, an engineer and former U.S. Undersecretary of Energy under President Obama. To her, the four dams are an opportunity.
“The Yadkin plants are some of the best-run, best preserved, and they have a very experienced workforce,” Johnson said.
Johnson is familiar with North Carolina. She spent eight years as dean of Duke University's engineering school, leaving in 2007.
Cube runs 14 other hydroelectric dams in New York, Pennsylvania, Virginia and West Virginia with a capacity of 126 megawatts. This week's deal adds another 215 megawatts, and Johnson thinks improvements can boost that.
“Our interest is to upgrade and modernize the plants even more than what's been done to help clean the water more … and what I mean by that is provide better oxygenation so that it is a better environmentally sustainable habitat … [and] build the economy in the community, and to preserve hydropower for future generations,” she said.
That's a message welcomed by Alcoa's Yadkin Valley critics. The company has faced criticism for tapping the river for electricity without providing the jobs or community investments it once did.
The state of North Carolina even took Alcoa to court, challenging its claim to ownership of the riverbed near the dams. A federal court last fall ruled in favor of Alcoa, but the state is appealing. The case is now pending at the Fourth Circuit Court of Appeals.
Will Scott is the Yadkin Riverkeeper, and he's watching the dam sale closely.
“We hope this is a positive development. Alcoa has a pretty poor record as a steward of water quality, and they've delayed necessary improvements to the dams for years now,” Scott said.
He's already talked to folks at Cube and hopes they'll follow through with promised upgrades and continue listening to community concerns.
Meanwhile, Alcoa still seeks renewal of a federal license to operate the dams and manage 38 miles of the Yadkin. Its previous 50-year license expired in 2008, and it's been operating under 1-year permits since.
Last fall, state regulators granted Alcoa a water quality certificate, a key milestone in the relicensing. Johnson hopes a new license is issued before the deal closes, but says Cube can operate with a year-to-year permit if it's not.
Nobody from Alcoa was available for an interview. But a spokeswoman said the company will continue to own the Badin Business Park, which it developed on the old plant site. It’s also keeping most of its land holdings along the river.