Alcoa Kicks-Off Cheoah Dam Modernization Project

ROBBINSVILLE, N.C.--(BUSINESS WIRE)--Alcoa (NYSE:AA) today kicked off a $110 million modernization project at Cheoah Dam, one of four hydroelectric dams that make up Alcoa Power Generating Inc.’s Tapoco Project. The modernization effort will increase the dam’s efficiency and energy output and increase the life of the dam by at least another 40-50 years.

“Alcoa Energy is pleased to be actively improving our green energy assets to increase our energy self-sufficiency. It is an added advantage that our reservoirs offer a variety of recreational opportunities and provide important habitat for plants, fish and wildlife”

“Hydropower is clean, renewable, reliable and efficient,” said Rick Bowen, Alcoa Energy President. “These attributes equal sustainability – sustainable energy and sustainable jobs. That’s why we are looking forward to replacing the four 90-year-old Francis turbines with four new high-efficiency turbines, generators, and transformers which will provide an additional 22 megawatts of generating capacity at APGI’s Tapoco Cheoah plant.”

Alcoa Energy is a global producer, controlling nearly 3,000 megawatts of generating capacity to provide for the energy needs of Alcoa’s worldwide smelting and refining system as well as the needs of regional wholesale markets. The business includes Alcoa Power Generating Inc., which owns and manages the 360-megawatt Tapoco system.

“Alcoa Energy is pleased to be actively improving our green energy assets to increase our energy self-sufficiency. It is an added advantage that our reservoirs offer a variety of recreational opportunities and provide important habitat for plants, fish and wildlife,” Bowen said.

The modernization project was given a jump start when the U.S. Department of Energy announced it would award Alcoa a $12.95 million grant as part of the 2009 American Recovery and Reinvestment Act. The grant was issued by DOE’s Wind and Hydropower Technologies Program. Jacques Beaudry-Losique, Wind & Water Program Manager for the DOE Office of Energy Efficiency and Renewable Energy, joined Bowen at the kick-off ceremony.

"Upgrades like the ones planned for Cheoah Dam represent significant opportunities to make environmentally sound hydropower even more cost-effective. This project will boost four turbines' generating capacity by 28%, and serves as a terrific example of how the Recovery Act can expand clean energy while putting people to work," Beaudry-Losique said.

When announcing the grant last year, DOE Secretary Steven Chu said, “One of the best opportunities we have to increase our supply of clean energy is by bringing our hydropower systems into the 21^st Century. With this investment, we can create jobs, help our environment and give more renewable power to our economy without building a single new dam.”

DOE sought cost-shared projects that upgrade existing hydropower facilities without requiring significant civil works modifications to dams, allowing for them to be developed quickly to help create jobs and stimulate the economy.

The first phase of the modernization project will include the upgrade of two of the dam’s five power generation units. Specifically, first phase objectives for this DOE cost-shared project are to purchase four new high-efficiency turbines, generators, and transformers, upgrade the balance of plant equipment, and complete installation of two units.

Another two units will be upgraded during phase two of the project and will increase Cheoah’s total capacity to 140 MW and add 40 to 50 years of expected useful life to the facility without requiring any modifications to the dam and without any significant regulatory delay.

In total the site has 5 units. Unit 5 was built in 1949 and the generator was rebuilt in 1995. Unit 5 is a 30MW unit and does not require replacement.

“I am honored to be able to congratulate Alcoa and help announce a major modernization of the Cheoah Dam, which has provided hundreds of job opportunities and enormous amounts of clean energy throughout its 100-year history,” said Rep. Heath Shuler (D-North Carolina).

“The $110 million investment Alcoa is making to ensure the success of this project underlines the tremendous impact the Dam has had, and will continue to have, on economic prosperity throughout Western North Carolina.”

The modernization follows the recent relicensing of the Tapoco project by the Federal Energy Regulatory Commission. The new 40-year license was effective March 1, 2005 and outlines protection, mitigation, and enhancement measures for the Project that address ecological resources as well as other beneficial uses of the Cheoah and Little Tennessee Rivers, including hydropower generation, watershed protection, endangered species enhancement, fish passage and recreational opportunities.

Construction began on Cheoah Dam in 1916 and was completed in 1919. At the time of completion, Cheoah was the world’s highest overflow dam at 225 feet. The dam was made famous by serving as the backdrop of the jump scene in the 1993 major motion picture, The Fugitive, starring Harrison Ford.

About Alcoa

Alcoa is the world’s leading producer of primary aluminum, fabricated aluminum and alumina. In addition to inventing the modern-day aluminum industry, Alcoa innovation has been behind major milestones in the aerospace, automotive, packaging, building and construction, commercial transportation, consumer electronics and industrial markets over the past 120 years. Among the solutions Alcoa markets are flat-rolled products, hard alloy extrusions, and forgings, as well as Alcoa® wheels, fastening systems, precision and investment castings, and building systems in addition to its expertise in other light metals such as titanium and nickel-based super alloys. Sustainability is an integral part of Alcoa’s operating practices and the product design and engineering it provides to customers. Alcoa has been a member of the Dow Jones Sustainability Index for eight consecutive years and approximately 75 percent of all of the aluminum ever produced since 1888 is still in active use today. Alcoa employs approximately 59,000 people in 31 countries across the world. More information can be found at www.alcoa.com.

About APGI

Alcoa Power Generating Inc. ("APGI") is a wholly-owned subsidiary of Alcoa Inc. ("Alcoa"), the nation’s (and the world’s) leading producer of primary aluminum and fabricated aluminum. APGI exists primarily to generate, purchase or manage electricity for Alcoa’s use in its aluminum smelters and other industrial processes.