Century Aluminum Granted Special Power Rate in West Virginia

by | Oct 9, 2012

ArcelorMittal, Bayer CropScience, Novelis, DuPont and other large industrial companies that do business in West Virginia say they’re satisfied with the state Public Service Commission’s decision to grant a special power rate for Century Aluminum’s Ravenswood plant, according to media reports.

Century officials told the state that they needed a special rate structure to restart the Ravenswood aluminum smelter, which closed in 2009, costing more than 650 manufacturing jobs. The company proposed shifting the costs to ratepayers when aluminum prices were low.

The commission, however, ruled Century can pay a special electricity rate up until Dec. 31, 2022 if it reopens the West Virginia plant, but ultimately must cover its entire energy costs from that time, according to The Street.

Describing it as a “complicated decision,” Derrick Williamson, an attorney for the industrial companies — known as the West Virginia Energy Users Group — told the Charleston Daily Mail that said the companies’ reaction to the ruling is “generally positive.”

The group had strongly opposed Century’s cost-shift proposal, and called it “beyond the pale of reason” in earlier hearings, the newspaper reports.

The commission’s Consumer Advocate Division also argued against Century’s proposal because it would mean higher bills for other Appalachian Power customers, the Charleston Gazette reports.

Century officials told the newspaper on Oct. 5 told that they were still reviewing the decision, and would issue a “more comprehensive statement” after they had a better understanding of how it would affect the company’s efforts to reopen the plant.

According to the news reports the ruling sets a minimum rate that Century’s electricity payments would have to hit over the 10-year contract. Its actual monthly payments, however would rise or fall depending on the price of aluminum; the company would pay less if prices are low and more if prices are higher.

If, at the end of the contract period, Century hadn’t paid the minimum because of low aluminum prices, it would have to pay the difference to Appalachian Power.

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