Unions offer up power plan to assist aluminum smelters
John Stucke - Staff writer
Worried about the aluminum industry's future in the Northwest, unions are pursuing a plan that would guarantee low-cost federal power to smelters.
The plan would ask every customer of the Bonneville Power Administration -- from aluminum companies to public utility districts and electric cooperatives -- to share in a plan that would primarily benefit aluminum companies.
The plan is this: Every customer would receive about 73 percent of their BPA-allocated power for about $23.50 per megawatt beginning in October and stretching through 2006.
That's the current price, albeit one that is a fraction of what electricity is fetching in the volatile open market.
Because the remaining 27 percent of the BPA allocation would be sold at market prices, the unions say such a program would encourage energy conservation.
A caveat: Aluminum companies must pledge to build new power plants to satisfy the smelters' massive power appetite, and they must leave the federal power system in five years.
In the past, such tiered rate proposals that seek cost sharing across BPA's customer base have generated little enthusiasm.
During the past year, several aluminum companies, including Kaiser Aluminum Corp., have curtailed production and resold their electricity.
Beginning in October, the companies will begin buying electricity from BPA under new contracts that don't include resale provisions. Instead, the contracts call for higher rates that some companies claim may make aluminum smelting unprofitable.
The unions offering the plan include the United Steelworkers of America, Washington State Labor Council and the Oregon AFL-CIO.