Kaiser will sell power

The Bonneville Power Administration will purchase surplus electricity from the aluminum company

The Oregonian

Saturday, December 16, 2000

By John K. Wiley of The Associated Press

SPOKANE -- Kaiser Aluminum, accused of taking unfair advantage of the West's energy crunch, said Friday it would sell more power to the Bonneville Power Administration and provide additional compensation to laid-off workers through January.

The company was criticized after it announced Sunday that it would stop production at its Mead smelter at Spokane, lay off more than 400 employees and net $52 million for this month by reselling unused electricity to the BPA.

Washington Gov. Gary Locke and U.S. Energy Secretary Bill Richardson weighed in against the company profiting from the sale while workers suffered. The resale is allowed under Kaiser's power contract with the BPA, the region's federal power marketing agency.

Kaiser will sell 190 megawatt hours of unused power back to the BPA in January for about $280 a megawatt hour, netting $36 million, Kaiser spokeswoman Susan Ashe said.

That is well below the going market rate of $550 to $600 a megawatt hour and below the $550 per megawatt hour Kaiser sold power for in December, BPA spokesman Ed Mosey said.

Kaiser paid about $23.50 a megawatt hour when it bought the power and locked in the price five years ago.

As part of the agreement reached with BPA Thursday, about 545 workers who are members of the United Steelworkers of America and who are affected by curtailments at the Kaiser smelter since November will receive 100 percent of their base pay through Jan. 31, Ashe said.

The hourly employees will continue to receive full dental and medical benefits, she said.

In addition, smelter employees who don't qualify for the compensation package, such as those who don't have enough seniority, will receive a $1,000 holiday bonus, the company said.

Previously, the company agreed to pay only 70 percent of the workers' base pay through Oct. 1. Ashe said that level was called for in contracts with the steelworkers, so any additional compensation needed to be negotiated.

"Certainly, it's a showing of good will for the region and their workers," Mosey said. "We're still discussing with them over the substantial benefits they would make in the future."

The BPA contract makes possible the power sales. Under terms of its contract with the BPA, Kaiser has power available for sale through September 2001.

"I expect we're going to have to extend this benefit through the remainder of the period in some form," Mosey said.

If Kaiser and the BPA reach agreements for more power sales after January, as expected, Locke said he would expect the company to continue providing 100 percent of wages to idled workers.