Kaiser Aluminum gets court OK to reject BPA power
Monday September 23, 5:32 pm ET
NEW YORK, Sept 23 (Reuters) - Kaiser Aluminum Corp. said Monday that U.S. bankruptcy court approved its petition to reject a five-year fixed power contract with the Bonneville Power Administration (BPA) in Portland, Oregon.
As part of the primary aluminum producer's filing for protection under Chapter 11 of U.S. bankruptcy code in Federal Court in the District of Delaware, Kaiser had petitioned to be let out of its electricity contract with the giant federally chartered power generator.
"Still to be determined is the date that we would formally reject the power contract with BPA," said Scott Lamb, spokesman for Kaiser after the court hearing on Monday.
Lamb said the company would notify BPA at the time it actually chooses to reject the power contract, contingent on having other power deals in place with other power providers.
Kaiser had contracted to receive BPA electricity to power its smelters in the Pacific Northwest on a take-or-pay basis. On Monday, the court ruled to nullify what could have amounted to a $100 million power bill for Kaiser even if it did not operate its smelter in the Pacific Northwest region.
Lamb said the rolling mill in Trentwood, Washington will not be affected by BPA power contract.
"We are in discussions on new power agreements for Trentwood. These discussions are with other power providers, other than BPA," said Lamb.
"At the time we are ready to cut over to those new contracts, that in essence, will be the date that we provide the BPA for the rejection of the existing BPA contract," Lamb said.