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Wednesday, 07 January 2009 14:09

Macon pulls out of fight with Duke over dam mitigation

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It appears a piece of property in Nantahala had something to do with Macon County pulling out of a fight against Duke Energy over the utility’s hydroelectric dams.

Macon County wants to renew a lease on the land — which is owned by Duke but used by the county for a recreation complex — but the fight over Duke re-licensing its dams was putting the two at odds in lease negotiations.

County Commissioner Bob Simpson said it is possible that Duke may have refused to lease the land if Macon County didn’t back down.

Now that the county has withdrawn from the fight, Duke may be “more amenable” to leasing the land, Macon County Commissioner Jim Davis said.

“We prefer to work in partnership with Duke rather than be in an adversarial role,” Davis said.

Macon County had joined forces with Jackson County and the town of Franklin several years ago in challenging Duke’s quest for new federal permits for a host of profitable hydroelectric dams. Duke is required to cough up environmental and recreational benefits in exchange for operating the dams, but many felt the region was getting shortchanged by Duke.

In the suit, Macon County was attempting to get “a lot of money” from Duke in return for the company using local rivers to generate electricity, according to Davis. Some think Macon County should have remained in the fight to get more money out of Duke.

It appears the land lease did, in fact, have something to do with the county withdrawing from the fight. According to the minutes from the Oct. 13 commissioners meeting, County Manager Jack Horton alluded that it may be best to withdraw from the fight since the county was negotiating renewing the lease.

The minutes state: “The manager advised the board they should consider if it is in the best interest of the county to continue with the intervention or withdraw. He added in the meantime this issue is putting the county at odds with the power company when it comes to negotiating property and extending leases for recreation purposes, i.e., Nantahala Recreation Park. The manager recommended the board study this situation before the Nov. 10 meeting.”

Horton could not be reached for comment as he was out of the office last week and Monday (Jan. 5).

Davis said Duke did not promise the county a good deal on a lease in return for withdrawing from the fight. Nor did Duke threaten to deny a lease if the county remained at odds.

“There was no quid pro quo on that issue,” said Davis.

For more than 20 years Duke has leased the property to the county, but the current lease is expired. The county continues to use the property anyway.

Duke and the county are in the process of negotiating a lease renewal.

Simpson said the county is considering building a gymnasium on the site but first wants a long-term lease in place to ensure the land will be available.

“We can’t do anything without a long-term lease,” Simpson said.

Duke Business Relations Manager Fred Alexander of Franklin said with Macon County withdrawn from the lawsuit it makes negotiating a lot easier.

In a statement about Macon County withdrawing from the fight Alexander said, “We certainly believe Macon made a good decision to get out of re-licensing at this stage.”

However, Alexander said he has “no doubt” that a lease agreement would still be worked out if the county were still in the fight.

Alexander added that the county and Duke are currently working on a “revised draft” of the lease agreement.

Davis said the county also dropped out of the suit because it didn’t look likely that it would win.

Alexander agreed that the Federal Energy Regulatory Commission turned down “every single request” Macon County made.

 

Is compensation due Macon County?

Some, like Franklin Town Alderman Verlin Curtis, think Macon County should be compensated in return for Duke utilizing the county’s waterways to generate millions of dollars worth of electricity.

Duke realizes “great profits” off using Macon County’s waterways and should pay the county back for their use, Curtis said.

If the county would have stayed in the lawsuit, it could have gotten Lake Emory dredged at Duke’s expense as well as received bank restoration along the Little Tennessee River, Curtis said.

Now Macon County “stands to get nothing,” said Curtis.

“Look at what Duke has done for the area — nothing,” said Curtis. “Look what they’ve taken.”

Alexander said Duke does not owe Macon County anything. Those who feel Duke is indebted to Macon County for using the waterways are “completely misinformed over the nature of re-licensing,” Alexander said.

He said the water Duke uses in Macon County is owned by the state and that residents have benefited from Duke providing “lower cost electricity.”

Some have been misinformed into believing that when a utility is re-licensed that it means there is a “pot of gold” available for the taking. He said this belief could have come from other utilities giving away large sums of money when they re-licensed.

For example, Progress Energy ponies up $325,000 a year for a single dam on the Pigeon River in Haywood County, with the money managed by the Pigeon River Trust Fund. The dam there isn’t nearly the size of the one at Nantahala Lake in Macon County.

Also, Alcoa, a Tennessee power company, agreed to provide an environmental trust fund of $125,000 annually as mitigation for four dams — Cheoah and Santeetlah lakes in North Carolina and two lakes in Tennessee. Like the Pigeon River Fund, Alcoa’s payments are doled out by a board comprised of community members. The fund is in addition to a 5,000-acre conservation easement.

But Alexander said Duke did not want to hand out cash for a “small group” to spend as it wanted years later, but would rather go ahead and fix certain issues.

Duke has proposed a host of small perks for Macon County, like adding more campsites, lighting, parking, a toilet and a handicap-accessible pier at Nantahala Lake. Also on the list are a wildlife-viewing platform and boat launches. The biggest ticket item, however, is $40,000 for water and soil conservation, but it can only be spent on “Duke approved initiatives.”

Macon County didn’t get everything it wanted. The county had asked for $700,000 upfront, then an annual payment based on how much electricity Duke generated off its hydro operations within the county. Macon also sought payments of $150,000 annually for sediment and erosion control initiatives — rather than a single payment of $40,000 as Duke has proposed.

 

Jackson County, Franklin continue the fight

Jackson County and Franklin are continuing in the fight against Duke’ re-licensing despite the fact that rulings have consistently been in favor of Duke.

Currently Jackson County and Franklin are awaiting the rescheduling of an administrative hearing in the case. That hearing will take place in Jackson County District Court.

Some, like Jackson County Commissioner Tom Massie, advocate Jackson County throw in the towel and stop spending money on legal fees. Jackson County is fighting Duke to prevent demolition of the Dillsboro dam and also hopes to get monetary payments from Duke.

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