Aluminum cutbacks likely to continue
By DAN SPATZ
of the Chronicle
Aluminum smelter production cuts in The Dalles and Goldendale will likely remain in effect until at least next spring — six months past the original restart date this October, but not the full two-year delay requested by Bonneville Power Administration, Golden Northwest president Brett Wilcox told employees and other community members Friday night.
Meanwhile, Golden Northwest is negotiating for BPA reimbursement to pay full wages and benefits of idled workers as well as compensation for fixed operating costs such as market contracts, said Wilcox and Paul Norman, a top BPA official who also addressed Friday’s forum at The Dalles High School. The forum was organized by the steelworkers’ union.
Norman, senior vice president of power marketing for BPA, said his agency hopes to reimburse local tax districts for revenue losses stemming from the idled plants.
The goal, Wilcox and Norman said, is to generate enough short-term revenue from BPA not only to cover workers’ wages, but to allow Golden Northwest to pursue its strategy of developing alternative energy sources — among them a jet engine-powered plant now under construction near Goldendale, as well as wind turbines — to attain energy independence from BPA by the year 2006.
“We have a very good, aggressive plan to meet our needs without Bonneville,” Wilcox said Friday, suggesting Mid-Columbia aluminum smelters will be stronger in the long run as a result.
But he cautioned that the hardest times for workers and their communities will be in the short term, particularly within the coming year.
“I have to be candid,” Wilcox said. “The next phase is going to be really tough.” Production curtailment will have to be extended at least six months beyond the original “restart” date of October 2001, and “maybe a year,” he said.
“The good news is, if we do this right, we will be a lot stronger over the long term.”
In response to a question from the audience, Wilcox said he fully expects to restart production at both Northwest Aluminum in The Dalles and Columbia Aluminum near Goldendale.
“I am absolutely, totally committed to restarting both smelters as soon as we can,” Wilcox said.
“We will get through this, if we can develop the resources [for energy independence], if we work together. We have to work with Bonneville. If we do that, we will come through this crisis stronger for it.”
He avoided pinning blame for the situation on BPA, saying the federal energy marketing agency faces a drought expected to be the second worst on record, in addition to California’s mismanaged deregulation process.
For his part, Norman said “in retrospect” BPA miscalculated in earlier years, when it attempted to market more power than it has control over in the Pacific Northwest. (BPA markets energy produced, primarily, by the US Army Corps of Engineers at the region’s hydroelectric dams.)
First the California deregulation disaster and now the drought have pushed that situation into a crisis, Norman said.
“Frankly, the lights are at some risk of going out this winter” in the Pacific Northwest, Norman advised.
BPA has direct access to 8,000 megawatts of energy, but must meet contracted obligations of 11,000 megawatts. This has driven its request for a two-year shutdown of the region’s aluminum plants, which are major power consumers; aluminum companies, on the other hand, note they were enticed to locate in the region 30 years ago with the promise of long-term, affordable power supplies. Wilcox told Friday’s audience Golden Northwest and BPA have worked out earlier crises as well, though, and he expects to accomplish that again now.
“The time now is to work together. We have a problem. Bonneville has a problem. We need to work together,” said Wilcox, who received standing ovations during the forum.
The Golden Northwest CEO also outlined his plans for energy independence, explaining the company is pursuing three major projects — new energy plants at Goldendale and Clatskanie, and wind farm development in the eastern Columbia River Gorge.
“I have become a true believer in wind generation,” Wilcox said. “As a company we are totally committed to building as much wind generation as is environmentally responsible and economically feasible in the eastern end of the gorge.”
Also attending Friday’s forum were local union president Mike Keith, other union representatives, State Sen. Ted Ferrioli and State Rep. Patti Smith.
Both Ferrioli and Smith pledged to support state legislation extending unemployment benefits for laid-off workers and funding for job retraining, although Ferrioli expressed doubts over whether retraining could ensure family-wage jobs.