Another aluminum smelter to halt work
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John Stucke - Staff writer
An aluminum smelter in northwest Montana agreed to stay closed for two years as the region braces for possible electricity shortages and steep price hikes.
The deal Columbia Falls Aluminum Co. signed with the Bonneville Power Administration Monday eases regional needs by 170 megawatts and marks another significant step in shutting down the Northwest metal makers for two years.
Alcoa Inc. signed a similar contract last week to keep its Ferndale, Wash., smelter closed, fracturing an aluminum industry alliance that has waged a political and public relations campaign to secure a cheap electricity supply for smelters.
Kaiser Aluminum Corp., with smelters at Mead and Tacoma, along with the Trentwood rolling mill, has been among the companies pushing for power prices low enough to keep smelters running.
Despite the recent BPA deals, the industry isn't ready to give up.
"We've always known that each company has a different equation they have to work out on their own," said John Wilson of Pacific Public Affairs. The firm has coordinated the Northwest Power Alliance, a group of aluminum companies and other businesses that have been at odds with BPA.
"We've been told by members to keep pushing forward," he said.
The deal with Columbia Falls Aluminum provides about $38.4 million from BPA to pay many of the 600 workers laid off during the temporary closure.
Alcoa received a similar deal -- about $65 million to pay its work force and offset local tax losses.
For Columbia Falls, the closure works like this:
The smelter will remain idled until October 2002. If power prices permit, the smelter then will restart one potline, about 20 percent of its capacity.
Another 1.5 potlines will be restarted in October 2003.
"We're hoping this is a reasonable compromise between the regional power needs and our need to run the plant," said Steve Knight, general manager of the smelter. "We were very concerned about staying down for an extended period. The concern is that the longer we're down, the more difficult it is to restart."
By keeping aluminum smelters idled and working on conservation contracts with investor-owned utilities and public utility districts, BPA seeks to keep rates from more than doubling.
The agency's effort needs to be finished soon, as it prepares to set rates for the power that helps fuel the region's economy.
BPA spokesman Ed Mosey said a significant development regarding conservation measures for at least some of the 130 public utility districts served by BPA will be made this week. He declined to offer details.
Furthermore, he said, the agency and investor-owned utilities have verbal conservation agreements that need to be written into contracts and signed.