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Wednesday, 17 June 2009 20:01

NC Utility Commission OK with dam seizure

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Jackson County appears to be on firm footing in its quest to seize the Dillsboro dam from Duke Energy as far as state law goes, but it is unclear whether the county could hit a roadblock from the Federal Energy Regulatory Commission.

Jackson County commissioners have voted to pursue condemnation of the Dillsboro dam and adjacent shoreline under the pretext of creating a river park. On the surface, recreation is grounds for condemnation under state law. Eminent domain law in North Carolina is complex to say the least, however, with seemingly endless exceptions and disclaimers written into the statute.

One pitfall Jackson County can cross off the list, though, is the North Carolina Utility Commission.

“I am not aware of any restrictions under North Carolina public utility law,” said Antoinette Wike, chief counsel for the N.C. Utility Commission.

That’s not to say counties can go around condemning any utility operation they please, such as coal plants or nuclear plants, and converting them into parks. Power plants of larger stature operate under a “certificate of public convenience and necessity” from the state. Considered integral to serving the public demand for electricity, those power plants would be protected from any foray into condemnation, Wike said.

But the Dillsboro dam is so old — nearly 100 years — and produces so little power, it never operated under a certificate of public necessity. Further, the power turbines at the dam have been off-line for five years.

“In this instance the Dillsboro dam and powerhouse have not been used for several years so the Utility Commission, as far as I know, doesn’t really have any jurisdiction over this,” Wike said.

Duke’s lack of upkeep on the Dillsboro dam could ultimately work against the utility in the condemnation fight. Maintenance on the dam was already in decline when major flooding on the Tuckasegee River in 2004 sidelined the hydro plant. Duke had already set its sights on demolishing the dam by then and chose not to invest in repairs to get it working again.

Prior to the flood, the two turbines in the powerhouse were capable of churning out just 225 kilowatts of power — although outside hydropower specialists say that the turbines could be retrofitted and additional ones added to make more power.

Had Dillsboro dam been operational, Duke may have been shielded by the state’s eminent domain laws. Statue allows for the condemnation of property owned by a public utility only if “the property is not in actual public use or not necessary to the operation of the business.”

Duke could try to claim that tearing down the dam is necessary to its operation. Tearing down the Dillsboro dam was considered environmental mitigation to continue operating its 10 other dams in the region — or so everyone thought. Special interests, from environmental agencies to paddling groups, supported dam removal following a three-year series of negotiations aimed at developing a mitigation package for the region that would allow Duke to renew its licenses for the other dams.

In a confusing ruling last summer, however, the Federal Energy Regulatory Commission disputed the notion that Dillsboro dam removal has anything to do with mitigation for the other hydro operations.

“The Commission is not bound to accept that view, and indeed, as the record demonstrates, we do not,” FERC ruled.

That could frustrate any claims by Duke that the dam’s removal is “necessary to the operation” of its business.

Duke may not be without recourse, however. The utility could turn to its powerful and long-standing ally in the fight against Jackson County: none other than the Federal Energy Regulatory Commission. FERC has consistently sided with Duke, from minor tiffs over language to major appeals.

FERC may — or may not — have something to say about Jackson County’s bold move to condemn the dam and halt its demolition.

“It would be premature to speculate on this matter at this point,” said Celeste Miller, spokesperson with FERC.

Miller said it is too early to know what if any sections of the Federal Power Act could come into play in this complicated situation.

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