The Federal Energy Regulatory Commission properly permitted
North Carolina failed to show Alcoa played “bait-and-switch” throughout the years-long relicensing process by misrepresenting its intent to keep Badin Works open after FERC renewed its license for the Yadkin Hydroelectric Project, the U.S. Court for Appeals for the District of Columbia Circuit said Jan. 18.
The project was originally licensed in 1958 and Alcoa once employed 1,000 or so workers at Badin Works, Judge David B. Sentelle said. But Alcoa began shrinking its Badin operations in 2002, citing adverse market conditions, and sold the bulk of the hydro energy produced by the Yadkin project on the open market, he said.
After FERC granted Alcoa a new license, it sold the Yadkin Project to Cube Yadkin Generation LLC for $243 million in 2017.
Contrary to North Carolina’s assertions, the company “disclosed the curtailment of industrial production at Badin Works every step of the way,” Sentelle said. Its openness about the worsening market conditions meant the state couldn’t show it gained an unfair advantage that chilled competing license applications for the power plant that would have authorized FERC to reopen the licensing process, he said.
The state also failed to show FERC should have allowed it to take over the plant under the Federal Power Act’s “federal recapture” provisions, the court said. North Carolina didn’t “identify a single case” supporting its proposal that the federal government could assume control of the Yadkin Project and then transfer it to the state. And no federal agency stepped forward to participate in the state’s taking-and-transfer proposal during the more than 10 years the proposal was pending, the court said.
The jobs lost when Badin Works closed left “a dark and menacing cloud” hanging over North Carolina. But “Alcoa did not conceal this impending squall,” Sentelle said.
Judges Robert L. Wilkins and Gregory G. Katsas joined the opinion.
The state attorney general’s office represented North Carolina. FERC attorneys represented the agency. Van Ness Feldman LLP represented Cube Yadkin as an intervenor.
The case is North Carolina v. FERC, 2019 BL 17280, D.C. Cir., No. 17-1243, 1/18/19.
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