Yadkin Stakeholders Finalize Relicensing Settlement Agreement


Alcoa Reaches Significant Milestone in Federal Relicensing Process, Prepares to Submit Agreement to Federal Energy Regulatory Commission

Highlights Include Higher Lake Water Levels, Long-Term Protection of 6,000 Acres, Expanded Recreation Opportunities and Improved Water Quality

BADIN, N.C--Alcoa (NYSE:AA) took another significant step forward in the federal relicensing process this week when stakeholders finalized a Relicensing Settlement Agreement (RSA) for the Yadkin Hydroelectric Project that operates along the Yadkin River in central North Carolina.

"This agreement is a significant step forward in our state's efforts to conserve and protect our green lands and blue waters, our fish and wildlife and water quality and water supply along the Yadkin-Pee Dee River valley," said Bill Ross, secretary for the N.C. Department of Environment and Natural Resources. "The agreement will also afford the people of our state many new and continuing opportunities to get outdoors and enjoy the wonderful natural resources of this region. I appreciate the hard and dedicated work of so many people in our department, at Alcoa and in the communities and organizations with whom we have worked and partnered on this relicensing during the last several years."

Stakeholders representing state and federal agencies, local governments, Catawba Indian Nation, environmental organizations and homeowner groups have spent nearly two years negotiating the agreement. Once the Relicensing Settlement Agreement is signed, it will be submitted to the Federal Energy Regulatory Commission (FERC) as a collective recommendation on the future operation of the Yadkin Project. Signatures on the binding agreement will be received during the next 30 days and the agreement will be submitted to FERC in April 2007.

"This agreement reflects the involvement, input and influence of many different organizations and represents a true balance of interests. All of us worked together to develop an agreement that offers substantial benefits for everyone involved," said Gene Ellis, licensing and property manager at Alcoa-Yadkin. "This settlement agreement will provide more water in High Rock Lake, more recreational opportunities, stronger environmental protections, long-term land protection and much more."

Final Agreement Closely Mirrors "Agreement in Principle"

The final relicensing agreement closely mirrors the Agreement in Principle (AIP) signed by 27 organizations in August 2006. During the past few months, negotiation participants have been developing final language that adds more detail to the agreement.

The negotiations included specific details about the planned donation or sale of more than 6,000 acres. Alcoa-Yadkin has agreed to donate a total of 1,442 acres, including the Morrow Mountain State Park property, effective after the new license has been granted. The State of North Carolina will purchase an additional 4,730 acres along High Rock Lake and Tuckertown for $16.2 million.

"The land conservation aspect of this RSA will create a permanent legacy of publicly accessible lands far beyond the terms of the next license," said Jason Walser, executive director of the Land Trust of Central North Carolina. "With proposed additions to county parks, new campsites, new game lands, new fishing piers, the expansion of Morrow Mountain State Park, and the expansion of the Uwharrie National Forest, the public is going to realize tremendous gains through the conservation component of this new license."

Other highlights of the agreement include more stable water levels in High Rock Lake, significant recreational enhancements, important environmental protections, a more consistent downstream flow regime and a drought management plan to protect lake levels and downstream interests.

"The South Carolina Department of Natural Resources has actively participated in development of the APGI Relicensing Settlement Agreement and believes the document appropriately addresses the Agency's interests in providing river flows to protect aquatic habitat, water supply, water quality and recreation," said Ed Duncan, director of Environmental Programs for the South Carolina Department of Natural Resources.

"The Nature Conservancy is very pleased to be signatory to the Relicensing Settlement Agreement with APGI. The settlement represents four years of collective hard work and commitment of many stakeholders, and a spirit of cooperation among diverse interests. The outcomes of this agreement will be significant improvements in downstream river habitats, lake habitats, water quality, recreational opportunities, drought management, and land preservation. Through the agreement, citizens of the Carolinas will be guaranteed these benefits for decades to come," said Eric Krueger, Director of Science and Stewardship at The Nature Conservancy.

To view the complete Relicensing Settlement Agreement, visit http://www.alcoa.com/yadkin

About Alcoa-Yadkin

For nearly a century, Alcoa-Yadkin has operated four hydroelectric dams and reservoirs along a 38-mile stretch of the Yadkin River as a source of economic, environmentally-friendly power. The project includes four reservoirs - High Rock, Tuckertown, Narrows (Badin Lake) and Falls - that offer a variety of recreation opportunities and provide important habitat for plants, fish and wildlife.

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