Relicensing
The hydroelectric dam and control over the lake resources is licensed to Alcoa by FERC (U.S. Federal Energy Regulatory Commission), traditionally by the issuance of 50-year licenses to operate. This license gives the operator the ability to control all water that goes through the dam or over the spillway, within the bounds of the contract and under the guidance of FERC. Additionally, it grants a degree of control over properties that adjoin the lake, including all homes and business that border the lake. All public and private docks, public areas, and even individual home sites are subject to the rules and approval of Alcoa. This license expired in April 2008 and has been under negotiation for renewal since 2001. This means they will be operating under an annual license until the new contracts are signed and the license is issued.
As of April 2008, this licensing process has stalled due to efforts by Stanly County and the City of Salisbury due to disputes about the new license, including Salisbury's demands that Alcoa pay to dredge areas near the city. This multi-million-dollar project would seek to restore this section of the lake where the city takes in water. In some areas, sedimentation has grown to over 10 feet (3.0 m) deep, and the city, the county (and many private groups and individuals) have claimed that it is due to Alcoa's management of the dam, not allowing the free flow of water during times of maximum inflow, instead only reducing the lake levels during peak demand for electricity which nets a greater profit. During the drought of 2007–2008, Alcoa has been operating under the new contract (under the supervision and with the permission of FERC), although they are not required to do so until (and if) the contract is renewed.
In June 2008, North Carolina legislators began consideration of condemning all lakes on the Yadkin River so the state could take control of hydroelectric capacity, the justification being based on the fact that Alcoa now has virtually no employees in the area (unlike in the 1950s when the previous contract was signed) and no longer uses the electricity for aluminum production, instead selling the electricity for profit on the open market. Because the river and hydroelectric capacity are public assets, the question being raised is if a private company or the public (i.e.: the state) should have control over the project. Previous environmental damages caused by the management by Alcoa have also called into question the priorities of the project when it is operated solely for profit. Funding for a study to look at the issue was being considered in the 2008–2009 state budget.
As of December 2010, the licensing is currently under review after the N.C. Division of Water Quality revoked their water-quality certificate that the company needs to continue operating its power-generating dams along the river. The governor of North Carolina, Bev Perdue, and other North Carolina politicians have made it a priority to recapture the Yadkin River water rights, an action that will require a vote in the United States Congress.
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