Aluminum firms see stock rise
Compiled from wire services
New York _ Shares of aluminum producers rose as investors gambled that the price of the metal will rise if the Bonneville Power Administration succeeds in pressuring smelters in the Pacific Northwest to save electricity by shutting down for the next two years.
Most of the smelters, which use vast amounts of power to produce aluminum, had already agreed to stay closed until October to make more electricity available for other uses. Comments from the BPA late Monday were the strongest suggestion yet that some capacity will remain off line for much longer.
Steven Wright, the federal utility's acting administrator, said BPA customers face a rate hike of 400 percent if customers such as aluminum producers don't dramatically reduce electricity consumption. The BPA's network of hydroelectric generators can produce 8,000 megawatts, but the BPA has agreed to sell 11,000 megawatts starting in October.
The utility would have to turn to the wholesale market, where prices have risen explosively, to make up the shortfall unless customers curb consumption.