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The U.S. Department of Energy has approved up to $13 million in stimulus funding to upgrade the generating capacity at ALCOA Inc.'s Tapoco powerhouse at Cheoah Dam in Graham County, N.C.

The money is part of up to $30.6 million in Recovery Act funding announced by U.S. Energy Secretary Steven Chu for seven hydropower projects that modernize hydropower infrastructure by increasing efficiency and reducing environmental impacts at existing facilities.

The Cheoah project was approved for the highest amount of funding, more than twice the $6 million authorized for an Alabama project.

ALCOA acknowledged the significance of the award, but noted negotiations will determine the final funding.

"The funding granted by DOE recognizes that our Tapoco facility is a vital player in the renewable energy marketplace. This project will help increase our annual generation by 23 percent and help sustain the Tennessee Operations facilities for at least another 40-50 years," ALCOA responded in a prepared statement.

"There is still some work to be done with DOE to finalize the award," the statement added.

The total cost of the planned project is estimated at $120 million.

The DOE funding would go to replace four 90-year-old Francis Turbines with four new high-efficiency stainless steel turbines, generators, and transformers, providing an additional 22 megawatts (MW) of generating capacity at the Cheoah plant.

Annual generation would increase by 95,000 MWh, and the project would reduce the likelihood of an oil spill into the river with the replacement of water-cooled transformers and removal of lead and asbestos from all four generating units.