Star, NC, February 07, 2013 --(PR.com
)-- If the state of North Carolina were to obtain the Yadkin Project license and facilities for the Yadkin River, it would result in 353 to 557 new permanent jobs, $17-28 million in additional labor income each year and $17-30 million in additional value-added each year, according to an economic report released today.
In 2012, Central Park NC commissioned economist Michael H. Shuman to conduct a study and report on the potential of the Yadkin River to provide wealth and jobs for North Carolina. The report – scheduled to be presented at the Uwharrie Regional Resources Commission’s meeting at 4 p.m. Wednesday at the Energy United Education Center, located at 201 S. Salisbury St. in Mocksville, N.C. – aims to quantify the possible benefits in job creation and local revenues for North Carolina if the state ultimately obtains the Yadkin Project license and facilities.
In 1958 the Federal Energy Regulatory Commission (FERC) granted a 50-year license to Alcoa to operate four dams and the related electrical generation and transmission facilities on the Yadkin River. This license expired in 2008 but is being renewed annually until a new long-term license is issued.
The Alcoa subsidiary, APGI, wants to secure a long-term license, but the state of North Carolina has been opposed.
In 2009 Governor Beverly Perdue asked FERC to recommend to Congress federal “recapture” of the license and reissuance to North Carolina. Another option might be for FERC to reopen its licensing process, and for North Carolina to bid for the license.
A conservative assessment of the annual revenue currently collected by APGI (Alcoa) shows that 58% – about $18 million – is spent outside North Carolina. This is what economists call “leakage,” because dollars that could generate economic-multiplier benefits if they were kept local are instead flowing out of the state economy. Leakage represents lost jobs, wages, and taxes for North Carolinians.
If the price of electricity stays constant, a State-held FERC license would result in $747 million additional dollars (undiscounted) remaining in the state over 50 years. If the price of electricity rises at the same rate it has for the last decade, additional money coming into the state could grow to $1,214 million.
This report conservatively shows how transfer of the FERC license to the State of North Carolina would result in 353 to 557 more permanent jobs, $17-28 million in additional labor income each year, and $17-30 million in additional value-added each year.
State management also would allow North Carolina to use the Yadkin Project’s low-cost electricity as an incentive for outside companies to move to North Carolina or local companies to expand production leading to increased job creation in the state, as other states have done.
APGI provides 15 direct jobs in North Carolina under its current FERC license. Were North Carolina to match the track record of New York State Power Authority’s nine incentive programs, the State could create another 14,000-75,000 jobs.
As water becomes increasingly valuable – some call it “tomorrow’s oil” – the State would enjoy more economic and environmental benefits by periodically shifting the Yadkin River from electricity to water-supply purposes.
The report concludes by suggesting that the “damages” that the federal government would be obligated to pay APGI (Alcoa) in the event of “recapture,” and the reasonable price North Carolina should be expected to pay for the new license to compensate the federal government, should not exceed $25 million. This is substantially smaller than the sum Alcoa has publicly claimed, because it takes into account the huge expenditures needed to bring the Yadkin Project up to federal and state environmental standards.
This report shows categorically that the Yadkin River can provide wealth and jobs for North Carolina if control of the Yadkin Project is returned to North Carolina, for the benefit of North Carolina’s citizens.
This report was prepared by Central Park NC under award 04-8806648 from Economic Development Administration, U.S. Department of Commerce, who commissioned Michael H. Shuman, Cutting Edge Capital, Oakland, CA 94612 to complete this project. The statements, findings, conclusions, and recommendations are those of the author(s) and do not necessarily reflect the views of the Economic Development Administration or the U.S. Department of Commerce. The Z. Smith Reynolds Foundation and the Uwharrie Regional Resources Commission provided additional funding.
The mission of Central Park NC is to promote a new economy based on the sustainable use of the natural and cultural resources of the Central Park region of North Carolina. Central Park NC is a 501(c)(3) non-profit organization that was founded in 1993 by a consensus of leaders from the Yadkin and Pee Dee River basin region. For more information, visit www.CentralParkNC.org or call 910-428-9001.
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