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C And that was before it sank in that the aluminum smelter no longer employed its once-large workforce -one reason Alcoa cited in its 1957 petition as an argument in favor of a 50-year license. Or that Alcoa had gotten a big break on sales taxes on its electricity. Or that Alcoa might one day sell its operations to a company outside the state. And it was before local residents began focusing on reports of environmental contamination linked to smelter operations. The state seemed on track to issue a key water quality permit Alcoa needed last year when a small group of local officials and state legislators began raising questions. Soon, Gov. Mike Easley and then-Lt. Gov. Bev Perdue asked the Federal Energy Regulator Commission to delay its relicensing until the state could sort through a number of environmental and other issues. That and a bureaucratic foulup have delayed the issuance of the permit -and provided state officials a window to act. In recent weeks both Republican and Democratic legislators have taken steps that could thwart Alcoa's license renewal plan and might even lead to astate-chartered trust to buy and operate the Yadkin River hydro projects. State Sen. Stan Bingham, R-Davidson, and other legislators have filed legislation to impose a tax on the water Alcoa's hydro plants use to generate power. But what has attracted the most attention is a bipartisan bill backed by key Senate leaders. Senate Democratic leader Tony Rand, D-Cumberland, and Republican leader Phil Berger, R-Rockingham, and Sen. Dan Clodfelter, D-Mecklenburg, have joined in sponsoring Cabarrus Republican Sen. Fletcher Hartsell's bill to create a Yadkin River Trust that could purchase and operate the hydro plants. It could use proceeds to clean up environmental problems and provide economic development and recreational benefits in the region, among other things. A rare bipartisan coalition What makes this discussion even possible in apro-business state is the fact that Alcoa doesn't employ a lot of people here anymore. If Alcoa loses this fight, that's the key reason. The company lost its best argument for renewal about 1,000 jobs ago. That bill has generated a lot of attention because its cosponsors are four Republicans and three Democrats who are sometimes sharply at odds on public issues. But all are pro-business legislators who in effect support legislation to create a new owner to buy a going business from a longtime player in state corporate and civic affairs that doesn't want to sell -- at least not to a group backed by the state. "The notion that the state would take over a private business that has been here nearly 100 years is really appalling," says Gene Ellis, property manager for Alcoa Generating. "I really can't imagine a business relocating to North Carolina after viewing this." Ellis has pointed out that while federal law allows for the "recapture" of power plants from licensees, it has never before happened and isn't likely to begin now. Hartsell: Not a taking Hartsell says it isn't a taking. The Yadkin River Trust could purchase the Yadkin River projects and operate the hydro plants. The money might come from bonds paid off by revenue from the hydro plants. But the most anticipated voice in this movement to shift ownership of the plants belongs to the governor. Earlier this year, Perdue said she was "very troubled" by the fact that Alcoa would still control much of the river if it gets a renewal. "It's hard forme to understand how a company could own water rights to an entire river basin," Perdue told the Observer's Bruce Henderson last month. Will governor intervene? Speculation is that Perdue's office will soon file a motion with the Federal Energy Regulatory Commission that would in some way support the notion of astate-created agency buying and operating the dams. Her office declined to confirm that Thursday. For Hartsell, this is a rare opportunity to establish firmer state control over a public resource vital to the region's prosperity and quality of life: "This could create a partnership to share control of the water and use it for the best interests of the state," he said. "The real issue is not electricity, but the use of the state's water." ~I L n i~ i] i ii i r L L r Attachment number 1 Page 46 of 320 F-2