Opinion
Wednesday, May 30, 2001Our View
Intalco deal no boondoggle
JOBS: Two-year hiatus will hurt small businesses most, but schools, ratepayers will benefit.
Disaster averted. Whew. The compromise that appears to have been reached between Alcoa Intalco Works and the Bonneville Power Administration will pay the wages of nearly all the 900 Intalco employees while the plant stops producing for two years. However, nothing is final until the ink has dried.
The deal as it has been presented doesn't appear much different from the one originally offered by BPA. Even after all the vocal protests and yard signs, Intalco employees don't appear to have ended up with much more than they started out with. But that doesn't mean it's not cause for relief.
While Intalco pushed for BPA to restructure its rate system to keep the plant functioning on affordable power, BPA instead stuck to its original offer of paying Intalco's employees for two years and using the plant's power supply to meet the needs of its other customers. BPA has over-committed itself to providing power in a year when a drought is compounding the problem by threatening the amount of hydroelectric power available.
There are, sadly, losers in this deal. Intalco will have to lay off some employees. The exact number has yet to be determined, but it's probably fewer than 100. Those who will suffer most are some of the small local businesses that supply Intalco -- some of the same businesses hit by this year's loss of 420 jobs at Georgia-Pacific West Inc.'s waterfront pulp mill and chemical plant.
The compromise the two say they have struck appears to have achieved the best results possible. Some have decried it as "corporate welfare," but the deal is certainly no boondoggle for Intalco. It benefits the employees and the taxpayers as a whole by ensuring that families and their wages stay in the community and by providing at least a portion of the huge industrial tax base that makes Ferndale's public schools some of the best in the county.
Had BPA not offered to cover those costs, a huge burden would have fallen on taxpayers to make up for the losses of revenue for schools, fire districts, library districts and other services.
The state and federal governments have used the same kinds of bailouts to aid fishers and farmers who have found themselves in dire straits due to supply or market price collapses.
The so-called welfare is helping families and services, not lining corporate pockets. That said, Alcoa's stock prices certainly don't seem to be hurting. Just after the deal was announced, Alcoa's stock closed at a 52-week high, up $2.51 at $44.51 a share.
The deal that was struck was in the best interest of all segments of the community. The two-tiered pricing system sought by Intalco would have meant even higher electricity prices than are already predicted for small business and homeowners.
The hard times are not by any means over. Many are still rightfully nervous about their job security as local companies large and small are making layoffs for the first time in decades. But the agreement is a relief for now and a good reminder that we shouldn't relax too much -- there is still an enormous energy crisis to solve.
