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State could pull contribution to Duke for dam removal

The $400,000 that Duke Energy was expecting to get from the state to help tear down the Dillsboro dam may no longer be available.

The N.C. General Assembly appropriated the $400,000 in 2008, but the money was never certified by the state budget office and thus is not available.

Last week, Fred Alexander, Duke district manager for government and community relations, said he did not know the status of the $400,000. Alexander said the money did not have anything to do with tearing down the dam anyway. He said the money was to be used to “support local economic development and community initiatives in the Town of Dillsboro and to provide additional funding to the Riparian Habitat Enhancement Initiative.”

However, Duke’s application to the state for the $400,000 in 2004 is titled “Dillsboro Dam removal.” The first line of the application states: “Duke Power formally requests $600,000 for removal of the Dillsboro Dam.”

The state’s award was less than Duke’s request.

Franklin and Jackson counties are involved in legal action against Duke Energy to stop the demolition of the Dillsboro dam. Franklin Town Manager Sam Greenwood said he believes the state has “rescinded” the $400,000. Franklin aldermen planned to pass a resolution opposing the use of state tax dollars for dam demolition, but held off upon learning the state funds may be off the table.

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That means that Duke will have to fund the full cost of tearing down the dam, Greenwood noted.

A Department of Water Resources document states that as a result of the state budget shortfall the $400,000 has been placed “on hold” and has been removed from the DWR’s budget.

The $400,000 has been the basis of one of the legal fights Jackson County is waging against Duke in hopes of saving the dam. The county has argued that since state funds are being used it kicks in the State Environmental Policy Act, which requires a full environmental analysis of its hydropower operations. Jackson claims the state never did one.

Even if the state withdraws the $400,000, Jackson’s attorney in the case claims the argument is still valid. When the state signed off on dam removal in 2007, there was a chance state money would be used and thus still should have triggered SEPA, Attorney Paul Nolan argues.

Funding to help with dam removal didn’t appear in the state’s budget until 2008. Duke and the state argue they didn’t violate SEPA since at the time the state signed off on dam removal in 2007 the funding hadn’t gone through yet. However, the application for funding was made in 2004, suggesting both the state and Duke knew state funding could be in the pipeline, Nolan said.

— From staff reports

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