RALEIGH, North Carolina — Alcoa Inc. will have to show it has ownership rights to the riverbed under four North Carolina dams it has operated for as much as a century, a federal judge ruled.
U.S. District Judge Terrance Boyle decided late Thursday that a trial starting in two months was needed to sort out the claims over riverbed ownership crucial to operating the Yadkin River hydropower dams.
"The availability of clean water and affordable power sources is critical to the welfare of Twenty-First Century America. At its core, this case highlights the importance of these two vital resources," Boyle wrote in his ruling. "Alcoa has the burden of proving valid title at trial."
The lawsuit brought last year by Gov. Pat McCrory's administration involved deciding who owns 40 miles of the Yadkin River bottom on which Alcoa and its predecessor built dams that once powered an aluminum smelter. The plant employed thousands before closing in 2007. The company has sold the electricity to commercial customers since then. Alcoa sold about $34 million of electricity over the year ending in September.
With the jobs now gone, McCrory and his Democratic predecessor, Beverly Perdue, have resisted a new federal license for Alcoa that would allow it or a future buyer to continue operating the dams for up to 50 years.
North Carolina's lawyers argued it has owned the riverbed since after the American Revolution and that the public has a stake in Alcoa's dams that were built on it.
Ownership of riverbeds beneath commercially navigable waterways has historically gone to state governments upon statehood. Because North Carolina was one of the original 13 states, the trial will have to determine whether at the time the country was founded the Yadkin was navigable along the 40 miles where the dams were built.
If the section of the river was passable for boats and the bottom owned by North Carolina, the next step is whether the state transferred its property rights to new owners and Alcoa acquired title that way, Boyle said.
Ray Barham, the Alcoa executive responsible for securing the federal license, said the company has owned the riverbed for nearly 100 years and paid taxes on it.
"We look forward to the opportunity to fully present our case and demonstrate our rightful ownership," he said in a statement.
The Yadkin is the state's second-largest river system and provides drinking water for about 700,000 residents of the state's Piedmont. The river flows for about 200 miles from the Appalachian foothills south through central North Carolina and becomes the Pee Dee River before entering South Carolina on its route to the Atlantic Ocean.
Emery Dalesio can be reached at http://twitter.com/emerydalesio.