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Alcoa appeals water quality permit

Three months ago, Alcoa celebrated when it won approval from the North Carolina Division of Water Quality to continue operating its dams on the Yadkin River. Now Alcoa says the certificate is a bad deal and is challenging part of it. WFAE's Julie Rose reports: Before Alcoa can get another 50-year license on the Yadkin River, it needs the state to approve the quality of the water running through its dams. In May, the state issued that approval in what's called a 401 certificate. But the state also said Alcoa would have to post a $240 million surety bond to guarantee that it made improvements to water quality on the river. Alcoa's Gene Ellis now says the Division of Water Quality can't make that demand. "We don't believe there's anything within the 401 regulations within the state of North Carolina to give the state the ability to require a bond for someone requesting a certificate," says Ellis. It's not common for the state to require a surety bond as part of a water quality certificate. Division of Water Quality officials refused to comment on the matter because of the lawsuit. But in her original letter issuing the water quality license, Director Coleen Sullins said the $240 million bond was necessary because of the nearly $500 million loss Alcoa reported in March. As of late Wednesday, analysts expected Alcoa to report more big losses for the third straight quarter. Ironically, those losses are another reason Alcoa's Gene Ellis is arguing against the bond. "A surety bond is a very expensive thing to finance," says Ellis. "You don't want to have to spend money on a surety bond if you don't need to." If the judge does decide the state can require the bond, Ellis says $240 million is far too high. But water quality watchdog Dean Naujoks of the Yadkin Riverkeeper wants the state to be even stricter: "Which is why we're gonna go to court and challenge this," says Naujoks. "But I just think Alcoa's being extremely unreasonable and irresponsible that they would try to thwart any attempt by the state to really hold their feet to the fire and force them to address water quality concerns that their dam operations have created." Naujoks is concerned about the oxygen levels in the water. He also wants the state to consider pollution in the lakes above the dams. Alcoa contends that is not a requirement of the certificate. Governor Bev Perdue is also involved. She wants the state to take control of Alcoa's dams. Until a judge rules, Alcoa's hydropower license will likely remain on hold.