Judge peers to US independence as NC fights Alcoa dams title

RALEIGH — Colonial-era land grants and settlement patterns on North Carolina’s frontier are among the evidence a federal judge will consider at a trial opening Tuesday that will determine ownership of the riverbed under Alcoa’s dams.

U.S. District Judge Terrance Boyle is scheduled to start the non-jury trial in a lawsuit in which North Carolina officials challenged whether Alcoa Inc. ever owned the underwater land on which it built four hydropower dams, the oldest of which has been operating for nearly a century.

Boyle’s first task is combing through ancient descriptions of the 40-mile stretch of the Yadkin River to decide whether it was navigable by boats at the time North Carolina and the rest of the original 13 United States became independent of Great Britain. Boyle then will consider whether Alcoa and its corporate predecessors bought property that included the riverbed, with some chains of title extending back to the mid-1700s Colonial period.

The dispute is about who will control the flow of North Carolina’s second-largest river system and billions of dollars of clean, hydroelectric water for the coming decades.

The dams powered an aluminum smelter for most of the 20th century and employed hundreds of workers. They were laid off, and the plant closed in 2007. The company has sold the electricity to commercial customers since then.

With the jobs gone, Republican Gov. Pat McCrory and his Democratic predecessor, Beverly Perdue, have resisted a new federal license for Alcoa that would allow it to continue operating the dams for up to 50 years. Alcoa sold a similar hydropower complex on the North Carolina-Tennessee border for about $600 million in 2012, seven years after receiving a new 40-year license and three years after shutting down production at its smelter in Alcoa, Tennessee.

“A declaratory ruling that the state owns the riverbed will not deprive defendant of the ability to maintain and operate its dams or the ability to continue to sell the power generated,” state attorneys argued in court filings. “It will merely re-establish the balance between the private benefit enjoyed by defendant and the state’s interest in the use of its public resources for a public benefit.”

Alcoa attorneys say they can prove the river wasn’t a navigable route at independence, enhancing its ownership of titles the company says show it had before building the dams. The state can’t now stake the public’s claim on the river bottom after recognizing it as private property for more than a century unless it’s willing to pay millions in compensation, company lawyers said.

Lawyers for Alcoa say because its relicensing is before the Federal Energy Regulatory Commission, the federal agency has oversight and Boyle could discard the state’s case. North Carolina’s deadline to contest the relicensing ended in 2006, a year before the company announced the layoffs and smelter closing, Alcoa attorneys said.