Jackson County’s lawsuit against Duke Energy to seize the Dillsboro Dam and surrounding river shore through eminent domain has been kicked up to federal court.
Jackson County filed the condemnation lawsuit in state court in August, but Duke attorneys argued that federal law is in play and therefore the case belongs in federal court. While state law allows for the condemnation of land by a county to create parks and recreation facilities, Duke claims that the Federal Power Law governing utilities preempts state statutes.
The case could ultimately come down to the interpretation of both state and federal laws.
Meanwhile, the county was seeking a restraining order against Duke to keep the utility from demolishing, altering or removing any part of the dam or nearby powerhouse while waiting for the condemnation suit to be heard. Jackson County wants to transform the dam and surrounding shoreline of the Tuckasegee into a river park and promenade, replete with walking paths, benches, fishing areas and river access. The dam and powerhouse are intended as focal points and therefore must be protected through a preliminary injunction, Jackson pleaded.
But Duke says it does not plan to start demolishing the dam until January 2010.
For that reason, Jackson County’s request for a restraining order to stave of demolition is unnecessary for the time being, Judge Martin Reidinger ruled.
Jackson County can “refile such motions for a temporary restraining order as may be necessary,” Reidinger wrote in his ruling.
Jackson County has formally filed a lawsuit against Duke Energy to seize the Dillsboro Dam and surrounding river shore, using eminent domain to create a public park and in the process save the dam from being torn down.
The county is also seeking a preliminary injunction against Duke to keep the utility from demolishing, altering or removing any part of the dam or nearby powerhouse.
“Duke intends to immediately begin preparing the Dillsboro Dam and Powerhouse for demolition and removal,” the lawsuit states. But any forays toward removal would cause “irreparable harm as these historic structures cannot be replaced.”
Jackson County wants to transform the dam and surrounding shoreline of the Tuckasegee into a river park and promenade, replete with walking paths, benches, fishing areas and river access. The dam and powerhouse are intended as focal points in the county’s Dillsboro Heritage Park Plan, and, therefore, must be protected through a preliminary injunction against Duke, Jackson pleads.
The injunction also seeks to allow county officials to come onto Duke’s property. Duke had threatened the county with trespassing charges if it attempted to do so, keeping the county from surveying the property it plans to seize or conduct an appraisal.
The lawsuit claims the county is within its rights to seize the property under a state statue allowing for eminent domain for the purpose of creating, enlarging or improving a park or other recreational facility.
Duke has previously countered that condemnation would interfere with an order from the Federal Energy Regulatory Commission to tear down the dam. Jackson claims that the “order” to tear down the dam is being misrepresented by Duke and that FERC merely granted Duke permission to tear it down. Once Duke no longer owns the dam, the FERC ruling will become moot, Jackson argues.
Jackson points out in the suit that the hydropower operation at the Dillsboro dam has been offline for five years, and therefore isn’t a core part of Duke’s business operation. In addition, Duke no longer has a federal license to operate the dam, having relinquished it in anticipation of demolition.
The county would be required to compensate Duke for the monetary value of the dam if condemnation is successful. At the time of filing the condemnation suit, the county was supposed to deposit the money upfront in an escrow account with the courts.
However, Jackson County only deposited $1. The county argues that by seizing the dam, Duke has been saved the trouble and expense of tearing it down, an undertaking that would have cost more than $1 million. That savings should more than suffice as the monetary compensation Jackson would otherwise owe Duke, the suit argues.
Swain County commissioners expressed their disapproval of an 18 percent hike in electric bills being sought by Duke Energy to pay for construction of a new coal plant.
Most of Jackson, Macon and Swain counties get their power from Duke.
In a resolution passed unanimously last week, commissioners protested the rate hike on the grounds that this region is partially supported by hydropower, a far cheaper form of power.
Duke has 10 hydropower dams straddling five rivers in the region. Swain County commissioners said they had always been told by Duke that the electric rates in the region would be lower than elsewhere because of those hydropower operations.
The water is free, unlike the fuel that powers coal, natural gas or nuclear plants. Duke’s rates are currently 31 percent below the national average. Other than annual adjustments to cover fluctuating fuel costs, there hasn't been an baseline rate increase since 1991.
Swain County forwarded its resolution to the N.C. Public Utility Commission, which holds final say on a rate increase.
As a regulated monopoly, Duke cannot raise power rates without permission from the N.C. Utility Commission. Duke operates under a profit ceiling. However, Duke claims that it needs to raise rates to cover the construction costs of a new $2.4 billion coal plant being built near Hickory and the increased cost of coal. The company has another $2 billion in capital investments in new power lines and pollution controls on plants.
Of the 18 percent hike, 13.5 percent would cover capital costs for projects like the new coal plant while 4.5 percent is intended to cover the increased costs of coal, according to Avram Friedman, director of the Sylva-based Canary Coalition. One theory is that Duke is asking for a bigger rate increase than it expects to get in anticipation of bargaining down.
Friedman proposes an alternative solution: don’t build the new coal plant.
Duke says the new coal plant is needed to meet the future demand for electricity. Friedman says the public should scale back its appetite for power. Instead of building a new coal plant, the money should be invested in energy efficiency programs and renewable energy, Friedman said.
“The Utility Commission must stop allowing Duke Energy to waste customers’ money while risking an environmental and health tragedy,” Friedman said. “North Carolina wants to be part of the national surge toward energy efficiency and clean power that is creating thousands of jobs everywhere.”
A bill passed by the state legislature in 2007 allowed utilities to start billing ratepayers to front money for new plants while still under construction. Previously, utilities couldn’t enact a rate hike tied to a new power plant until that plant came on-line. It forced utilities to secure financing for new plants through the financial markets rather than on the backs of rateplayers. Under the old financing rules, Friedman doubts the coal plant would have been built.
Friedman was among 43 arrested for a peaceable mass demonstration against the coal plant at Duke Energy’s headquarters in Charlotte on Earth Day this April, going down in history as the largest act of nonviolent civil disobedience on climate change in the country.
By Julia Merchant • Staff Writer
Whitewater releases from the Nantahala Lake dam will be suspended in October, forcing rafting outfitters downstream in the Nantahala Gorge to miss out on critical fall tourist season.
Rafting outfitters rely on a predictable flow of water released upstream by Duke Energy, which has a hydropower operation below the Nantahala dam. But starting Oct. 5, Duke will shut down its 67-year-old generator for maintenance and cease water releases.
“There’s going to be two to four weeks lost revenue for sure, and a lack of things for tourists to do,” said Steve Matz, owner of Adventurous Fast Rivers Rafting and president of the Nantahala Gorge Association.
Matz said he wishes Duke had held out on the repairs for a few more weeks.
“The community is a little unclear as to why this could not have been delayed until after the tourist season,” Matz said. “Especially in a recession year like this. It’s a tough year for everybody.”
Other rafting outfitters say that while they’re taking a hit, they understand the repairs must be done to avoid a more detrimental scenario.
Mark Thomas, owner of Paddle Inn, estimates he could lose as much as $15,000 by shuttering his business early. But he’d rather see Duke perform maintenance in fall than risk an unplanned shutdown in summer.
“If this thing broke during this time of the year, that $15,000 would turn into something much larger than that,” Thomas said.
Ken Kastorff, owner of Endless River Adventures, agrees.
“None of us were enthused, but when you take a look at the alternative and the chance of having a problem, it was for sure the lesser of two evils,” Kastorff said. “I wish it could have been done at a different time of year, but you have to consider, this isn’t taking your car to the mechanic. It’s a bit of a bigger job.”
In a press release, officials at Duke Energy expressed their reasoning that a three-month, planned outage is better than a six- to nine-month unplanned one. They also said they will limit the repairs to the tail end of the rafting season, and gave Gorge businesses plenty of advance notice.
“One of the things that we do proactively is let people know our intentions as early as we can,” said Fred Alexander, Duke’s district manager for community relations.
Outfitters concede that October isn’t their cash cow, compared to, say, July.
“If you take a look at the whole scope of things, October really isn’t that busy a period of time,” said Kastorff.
But the month, which marks the end of the whitewater rafting season, is important for other reasons. Keeping people employed is a major one.
“It’s not peak season by any means, but it still helps feed those who are here,” Matz said.
Matz said the repairs will mean people who need to work “are cut short by a month, so there’s going to be more unemployment.”
While rafting itself may not be a big draw in the fall, the industry plays an important role as an entertainment option for the many tourists who flock to the mountains during leaf season. Fall color, the Great Smoky Mountain Railroad, and rafting together work to entice visitors to the far western region.
“In many cases, all three of those things go hand in hand with tourism,” said Kastorff. “Losing one of them I think is going to have a negative impact on the overall tourism of the area, and on hotels and restaurants.”
Rafting outfitters are figuring out how to compensate for the loss of business.
Thomas said his company is booking as many trips as possible prior to October while making sure to communicate the shutoff with customers.
“We’re just doing the best we can to get everybody on the river, and telling as many as we can that the river’s shutting off early,” Thomas said.
Kastorff said he’s concentrating on diversifying the activities his company offers.
“We’re going to go ahead and have a lot of other activities we’ll offer folks on the weekend,” like lake tours, kayak instruction, or day trips to other nearby rivers, said Kastorff.
Others are throwing up their hands in acceptance of the situation.
“There’s not a whole lot you can do,” acknowledged Matz.
However, the blow may be softened a bit by the fact that outfitters have already done surprisingly well this season, despite the shaky economy. Thomas, for instance, reports that June business was on par with 2008 numbers, and that July, “has just blown the lid off,” far exceeding numbers from the past few years.
“It’s been fantastic,” Thomas said.
Thomas’ case may be an exception, but other outfitters seem to be holding their own.
“I don’t think we’re setting any records, but I think we’re on track,” Matz said. “People are still spending money, and people are still here.”
Matz theorized that his guests are cutting out more lavish trips to the Bahamas or Europe in favor of low-cost getaways within driving distance, like Western North Carolina.
Repairs to the generator should be completed by December, Alexander said. Duke Power has already started lowering Nantahala Lake levels in anticipation of the repairs, though at a slower rate than was initially planned. By Aug. 15, the lake will be at 10 feet below normal levels. By Labor Day, it will sink to 35 feet below. By Oct. 5, the date repairs start, it will be 60 feet below normal.
While outfitters may grumble about the repairs, they do acknowledge that overall, Duke has been a good partner when it comes to managing the flows out of Nantahala Lake.
“It’s as good a flow as we’ve ever had,” Matz said. “We get really great, consistent flows, and they manage the lake levels really well.”
Thomas said that when the lake was under the control of Nantahala Power and Light, the former hydropower owner, the river could stop running without an explanation, leaving outfitters in a lurch. Thomas called Duke “a tremendous asset.”
“Nantahala Power did an okay job, but Duke is right on the money,” Thomas said.
By Carl Iobst • Guest Columnist
Over the past few weeks several individuals and one media outlet have provided Jackson County citizens with a comedic Greek Chorus concerning the Jackson County commissioners and their decision to condemn the Dillsboro Dam and the land around it. News stories that have been written about the commissioners supposed ‘exercise in futility’ have come seemingly from a corporate spin doctor’s pen. Other individuals have attempted to “shame” us for not ‘doing the right thing’ and allowing Duke to have its way and destroy a county icon and significant cultural resource.
One individual claims that the powers of a private corporation (Duke) supersede the powers of a duly elected body (Jackson County Commissioners). Pardon me; I thought that the United States was a republic and not an oligarchy. Things change I suppose, despite ‘silly little pieces of paper’ such as the Constitution of the United States.
The supposed “cornerstone” of the integrated Nantahala/Tuckaseigee 2003 Settlement Agreement was actually an “agreement” rammed though by Duke as a sop to the “stakeholders” and their own selfish agendas. This silenced the rest of the environmental community and curried favor with the Federal Energy Regulatory Commission (FERC). Duke’s “Great Fear” is that they won’t get another half century of a licensed monopoly on hydro-electric production in Jackson County and make hundreds of millions of dollars from us, the rate-payers.
Yes, it is truly an absolute shame to see Jackson County’s limited natural and cultural resources raped once again. A huge electric power monopoly and a few selfish, self-centered ‘stakeholders’ are going to get what they want — no matter the cost. And the public be damned!
Regardless of the outcome of the FERC re-licensing process, I pity the poor souls (and there have been quite a few) who would sell themselves and the cultural resources of Jackson County for little more than, comparatively speaking, 30 pieces of silver. I can sleep at night; can they?
Duke Energy has begun work preparing a site along the Tuckasegee River upstream of the Dillsboro Dam in order to start dredging the river there.
While virtually everyone agrees the dredging is a good thing in and of itself, the fact that it is a prerequisite to tearing down the dam next year leaves all aspects of the project mired in controversy.
A site adjacent to the river along the slow-water pond created by the dam was cleared on July 1. It will be used as a staging area for siphoning out sediment backlogged behind the dam. A series of settlement ponds will separate sediment from the river water, allowing increasingly smaller particulate and fine organic matter to settle out before water flows back into the river.
An estimated 100,000 to 120,000 cubic yards of sediment have accumulated behind the Dillsboro Dam. Duke was mandated by the state to remove at least 70,000 cubic yards before it can tear down the dam to keep the sediment from washing downstream.
The dredging “is something they should have been doing for years,” said John Boaze, a biological consultant with Fish and Wildlife Associates and an opponent of dam removal. And, “I hope that when they get it done in Dillsboro they’ll move to Bryson, Lake Emory in Franklin, Mission over in Clay County,” Boaze said, listing some of Duke’s other dams that also have backlogged sediment behind them.
Boaze is concerned that Duke only has to remove 70,000 cubic yards rather than all of it.
“From the river’s standpoint, removing the sediment would be a good thing. They should remove it all,” Boaze said. Boaze said there was no basis for the state to arrive at 70,000 cubic yards as the magic number.
Kevin Barnett, an environmental specialist for surface water in the state Division of Water Quality’s Swannanoa’s office, said he thinks 70,000 cubic yards is sufficient to protect downstream water quality when the dam is removed. Barnett’s concern, however, is making sure sediment doesn’t end up getting transported downstream during the dredging process itself.
“The number of cubic yards removed is less important as opposed to how much material is transported downstream that would negate the intended effect of the work,” Barnett said.
To ensure this, Barnett said he would be checking — and Duke would be regularly reporting — on turbidity both upstream and downstream of the dredging work in order to monitor downstream deposition of sediments.
At the dredging site, Duke corporate spokesman Andy Thompson in Charlotte said the endangered Appalachian elktoe mussel could benefit from the dam’s removal, as upstream and downstream colonies would be able to mingle and create a larger, more viable population.
“I don’t really go along with that theory. We’ve already got mussels upstream and downstream,” Boaze said. “You’re going to mostly kill the ones downstream” due to habitat disruptions from the dam’s removal, no matter how carefully done.
Boaze said a better idea is to leave the dam but to create bypass waterways alongside it.
“I have a design: a fish passage put in place allowing them to go upstream and downstream, and kayakers to go downstream,” Boaze said.
Duke initially said they would do the dredging as part of the dam-removal plan if they could find a market for the sediment to offset the cost. But heightened attention to the project led the state to end up requiring the dredging.
The removal of the dam is in question, however, as Jackson County has moved to condemn the site. Jackson would like to seize the dam and adjacent shore to create a river park, which would serve as a scenic and recreational attraction. Jackson would also like to operate the dam as a form of green power.
Asked why Duke is proceeding with the dredging when it might be blocked from removing the dam, Thompson said Duke is confident the attempted condemnation will fail.
“It does not appear to Duke that Jackson County would be allowed by the applicable laws to condemn the Dillsboro Hydroelectric Project,” Thompson said. “Under the Federal Power Act, a hydroelectric plant can only be condemned by a county or municipality for the generation of hydroelectricity.”
Thompson added that state law does not provide for the use of condemnation to acquire a hydroelectric facility for power generation purposes. He said Duke “will certainly vigorously oppose any attempt by the county to condemn the Dillsboro Dam.”
County Manager Ken Westmoreland wasn’t concerned about Duke going to the trouble and expense of doing the beneficial dredging even while they might end up being prevented from removing the dam.
“The dredging is overdue. They should have been doing it under their previous license,” he said. “Our position is they’re simply doing it in compliance with their existing license — that they’re obligated to do periodic cleaning and dredging at all of their facilities.
Despite the dredging, Westmoreland says nothing is a fait accompli.
The removal of the dam is still very much in question,” Westmoreland said.
The proposed dam removal arose as a compensatory move by Duke in exchange for renewing federal permits for power-generating dams on other rivers throughout the region.
Removing the Dillsboro Dam to restore the section of the Tuckasegee to free-flowing status was offered by Duke as a benefit in exchange for the impacts of the other dams. However, the county and some area residents prefer to retain the historic dam. Other critics say dam removal does not serve as adequate mitigation, particularly for Duke’s dams on other rivers.
The town of Franklin acted appropriately by making public the terms of an out-of-court settlement offer extended to the town by Duke Energy.
The offer was aimed at getting the town of Franklin and Jackson County to drop their opposition to Dillsboro dam removal. Duke Energy hoped the offer would stave off a move by Jackson to use eminent domain to seize the dam and adjacent shoreline for the creation of a park.
Duke Energy insisted its offer should remain confidential, but the town of Franklin disseminated a copy of the offer to the media last week.
“They did it right,” said Mike Tadych, an attorney with the North Carolina Press Association who is an expert in public record and open meeting laws. “It would be illegal to enter into a confidential settlement agreement.”
Franklin leaders voted unanimously to reject Duke’s offer. Jackson County leaders likewise rejected it by a vote of 4 to 1.
Duke Energy said its offer was borne out of court-ordered mediation talks, which are supposed to be confidential.
It’s different when elected bodies are involved, however, Tadych said. Sunshine laws mandate openness by elected government bodies and trump any claim of confidentiality.
Attorney-client privilege entitled the town of Franklin and Jackson County to discuss Duke’s offer behind closed doors — which they both did. But once they formally voted on the offer, attorney-client privilege evaporated.
“As soon as it became water under the bridge, it became a public record,” Tadych said.
Elected leaders cannot keep what they are voting on secret. It would be akin to Congress voting on a bill, but not telling the public what was in it.
“You cannot vote by reference,” Tadych said.
As Jackson County leaders continue their fight against Duke Energy, an unassuming local lawyer that few have heard of has appeared as the county’s heavy-hitter against the politically powerful and uber-wealthy Fortune 500 utility.
Attorney Gary Miller, 52, a former business lawyer from New Orleans, has been hired to represent the county in its push to seize control of the Dillsboro dam owned by Duke. Jackson leaders plan to use eminent domain to take over the dam and adjacent shoreline and turn it into a river park. The move would thwart Duke’s plan to demolish the dam, achieving the county’s long-standing goal to save the dam.
Miller spent most of his career to date representing the corporate world. His expertise lies not in the courtroom, but in pulling off complex deals and financings rife with legal maneuvering, at times plowing new ground where precedent was lacking. Miller has negotiated deals between mega-corporations like Shell and Union Carbide. He also has represented casinos, developers, financial syndicates and other large organizations, both private and publicly traded.
“Historically I have been a transaction lawyer. I am typically a paper pusher,” Miller said, downplaying his lawyering past.
A paper pusher, perhaps, but mass quantities of extremely complicated, critically worded paper. Hundreds of pages with millions on the line should the other side manage to get a fast one by in the language. Paper with months of legal maneuvering and tedious research lurking behind the ink.
“Yeah, I’m good at that,” Miller said.
Paper pushing, in the world of lawyers, is how things get done. Jackson County Manager Ken Westmoreland said Miller’s background is a good match for “peculiarities” of the eminent domain case against Duke.
“His experience is in corporate law, working both for and against big corporations. Secondly, he specializes in real estate law, and the condemnation is basically a real estate issue,” Westmoreland said.
The most typical work for Miller involved commercial financings: a gigantic loan collateralized by corporate assets scattered across the county.
“They will hire attorneys in each state to give their opinion of the enforceability of the documents or modify them to make them enforceable,” Miller said.
When some of those assets resided in Louisiana — such as a deal involving an oil might putting up its refineries as part of the collateral — Miller was their guy
“It wasn’t the kind of stuff your average lawyer had knowledge about,” Miller said.
One of Miller’s most interesting jobs involved dueling casinos vying for a single gaming license in New Orleans. The state of Louisiana awarded the gaming license to one casino, while the City of New Orleans granted a lease to a different casino operator. Both groups felt they were entitled to the license — seemingly a no-win situation.
“The governor forced the two groups into a shotgun wedding and they formed a partnership to operate and build it,” Miller said. The joint entity that emerged went bankrupt before they finished construction, complicating an already sticky situation. Miller spent the next two years helping to sort out the mess. Skill in sorting out messes will be critical to resolving the bitter fight and test of wills between Duke and Jackson County.
The path that led Miller to Western North Carolina isn’t exactly a pleasant one. Miller is one of the thousands of Hurriane Katrina refuges who left their home city of New Orleans for good in the aftermath of the devastation and struck out for a new life. Miller hung a new shingle in Bryson City, and calls Sylva home.
Ironically, a life-long love of paddling drew him to Western North Carolina during that trying time. The paddling community is an ally in Duke’s plan to demolish the Dillsboro dam, as it would open up a new stretch of free-flowing river. Miller can frequently be found paddling the Tuckasegee in his free time, and until recently, was a member of American Whitewater, a paddling advocacy group that is a stalwart defender of dam demolition. Yet when it comes to tearing down the dam, Miller sides with the county in its fight to save it. Miller could not talk about specifics in the case or the county’s strategy.
As Hurricane Katrina bore down on Miller’s former city of New Orleans, he sent his wife and two children away. But saddled with an elderly mother on oxygen who refused to leave, Miller, too, was forced to stay behind. Sadly, his mother did not survive the paralyzing power failures that accompanied the storm.
The next day, as Miller tried to make plans to get her body out of the city, his family reached him on his cell phone and warned him of the broken levees and rising water that would soon envelop the already ravaged city. Miller escaped in time, although three weeks would pass before he could finally get his mother’s body out.
While holed up at the home of extended family the next day, Miller got a call from his law firm giving him two choices: transfer to their Houston office or their Baton Rouge office.
“I wasn’t prepared to make a decision to move,” said Miller. “I told them ‘I’ll go off on my own.’”
Miller scrounged to find a rental house for his family in Lake Charles, La., but just as they got settled in, albeit with just a few suitcases between them, a mandatory evacuation was announced for Hurricane Rita.
Miller had given one of the family vehicles to his mother’s caretaker, who had no car of her own and was stranded at a major refugee camp in Dallas. So when the evacuation order came for Rita, he piled his wife, children, mother-in-law, two golden retrievers and a pet guinea pig into their only remaining vehicle and joined the mire of traffic crawling north.
Shortly after Katrina hit, Miller had received an email from John Burton, the then general partner of Nantahala Village Resort, asking if the family was OK. Miller’s family was a regular at the Village, and he had befriended Burton after years of vacationing there. Burton had offered to put them up — an offer Miller initially declined with the intention of continuing his life in New Orleans. But as Miller reflected on his life — no home, no possessions, no job and one family car — Miller contacted Burden to tell him they were on their way.
Burton put them up for free at the Village for six weeks while they figured out what to do.
“Having lived through Katrina and two weeks later being evacuated for Rita, to be honest I was a little gun shy,” Miller said of moving back to New Orleans. “I have lived through many hurricanes, but that was something that was overwhelming.”
Miller had vacationed in WNC as a kid, often to paddle on the Nantahala. He continued the tradition with his own family, and in 1999 he and his wife bought a lot with the intention retiring here one day. They decided to make the move sooner rather than later.
“After Katrina, things and money basically had no meaning to me. My priorities were completely restructured in terms of what was important in life,” Miller said. “When you are working for a Fortune 500 company, you are just helping an officer climb the corporate ladder and make money. I had worked on a lot of ‘sexy ‘things as lawyers call it, but here I can help people. It is more rewarding professionally and emotionally.”
Miller brought a few of his big corporate clients with him, however.
“Clients said, ‘We don’t care where you are as long as you have a phone, a fax and a computer,’” Miller said.
Miller said he hasn’t experienced culture shock. He was tired of the big law firm and city life, despite the big paycheck that go with them. Miller said he paid his dues, from the 3 a.m. phone calls from big money clients who feel like talking and must be humored to missing his kid’s bedtime night after night.
While many may believe Jackson County has little chance of winning against the likes of Duke, there’s little doubt that any settlement that goes the county’s way will have to involve a very complicated game of give and take. Whatever the outcome, Miller will be back in his old element in his new WNC home.
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.
The terms of Duke Energy’s counter-offer to Jackson County and the town of Franklin in exchange for dropping their opposition to Dillsboro dam removal have been made public.
Duke Energy made a confidential offer to their opponents two weeks ago in hopes of staving off a move by Jackson to use eminent domain to seize the dam. Jackson County commissioners voted 4 to 1 last week to turn down the offer. The Franklin town board followed suit this week with a unanimous vote to reject Duke’s offer.
Franklin Alderman Bob Scott made the terms of the offer public. Once the town board voted on the offer, it became a public record, he said. Scott also believes the residents of Franklin have a right to know what the town board voted to accept or reject on their behalf.
“The public body exists for one reason only and that’s to conduct the public’s business,” Scott said. Furthermore, Duke is a public utility operating as a monopoly in the region and should answer to the public as well.
Here is what Duke has offered Jackson County in exchange for dropping their opposition to dam removal:
• Pay $150,000 to help create a river park along the Tuckasegee River in Dillsboro.
• Provide 200 hours by a Duke staffer to write grants to assist with the river park.
• Pay $75,000 to help Jackson County with the upkeep and management of a boat launch Duke already has plans to build along the Tuck, but will be turning over to the county for maintenance.
• Agree not to seek damages or attorney fees against Jackson County for holding up permits Duke needed to dredge sediment behind the dam. Duke had to go to court to get the permits.
• Speeding up payment of $350,000 for recreational amenities on the Tuckasegee and Lake Glenville that had been already promised. Duke had previously pledged to pay the mitigation sum within 15 years, but would speed it up to five. Duke similarly offered to speed up the already-promised sum of $40,000 for sediment control initiatives.
Here is what Duke had offered Franklin:
• Pay $10,000 for additional amenities at a recreation area on Lake Emory. Duke plans already call for a boat put-in and picnic tables.
In exchange, Duke wanted Jackson and the town of Franklin to drop all legal and public opposition, including challenging Duke in the news media. The offer also was contingent on the majority of terms remaining confidential.
Franklin leaders claim Duke has shortchanged their residents in the way of mitigation for the utility’s dam and powerhouse the Little Tennessee River at Lake Emory. Removing the Dillsboro dam was supposed to count as mitigation credits for Duke’s hydro operation at Lake Emory, but Franklin leaders fail to see the benefit of dam removal in Dillsboro to their residents in Franklin and want to see more direct benefits, primarily around Lake Emory.