CHARLESTON —
Century Aluminum’s shuttered West Virginia plant would pay a special electricity rate for up to 10 years if it reopens, but ultimately must cover its entire energy costs from that time, the state’s utility regulator ruled Thursday.
Future aluminum prices play a major role in the plan outlined by the Public Service Commission in its 70-page order. The electricity costs, in turn, represent a key hurdle in the quest to restart the Ravenswood smelter. It idled more than 650 workers when it closed in 2009. A re-opened plant would then help partly restore health benefits for hundreds of retirees, lost after the shutdown.
If Century and utility Appalachian Power agree to its terms, Thursday’s order allows the resulting special rate contract to last up to until Dec. 31, 2022. Neither Century nor Appalachian Power immediately responded to requests for comment Thursday.
The commission’s ruling would allow a rate based on aluminum prices, as Century has sought. It also keeps intact the tax credit worth up to $20 million a year, approved by the Legislature earlier this year, that’s also meant to help the Jackson County smelter restart.
But unlike Century’s proposal, the regulator’s decision would require the California-based metal producer to pay toward reducing rates for Appalachian Power’s other customers once their special rate agreement ends.
Century must track the differences between the special rate and a cost-based rate. If it had ended up paying more because of strong market prices, the first $200 million of the difference would count toward rate reductions. Century would keep 75 percent of any additional difference, providing the rest for the utility’s other customers.
But if weak aluminum prices lead to a negative balance in that tracking account, Century must pay that amount to Appalachian Power to help the utility offset the burden carried by its other customers.
Aluminum closed at $2,070 per metric ton on Thursday. Any price above $2,450 should be sufficient to help Century recoup Appalachian Power’s costs, Thursday’s order said.
The commission based its findings on an aluminum market expert who testified on Century’s behalf during hearings this summer for the rate request. The expert, Robin Adams, projected that prices will begin to climb and reach just below $3,000 per metric ton in the next 10 years, the order said. Under Adams’ forecast, Century will build up $350 million from the rate differences by the end of 2022, the ruling estimated.
A lower price for electricity while aluminum prices are weak, meanwhile, should increase Century’s cash flow, “to manage its business and weather the lows in the aluminum market cycle,” the commission concluded in its order. “We have, however, placed the risk that the more recent low prices in the aluminum market cycle will become the new norm on Century, not on other ratepayers.”
West Virginia
West Virginia regulators outline Century power rate plan
- West Virginia
-
-
W.Va. House elects Miley as new speaker
West Virginia’s House of Delegates elected Tim Miley as its new speaker Tuesday — though only after one of his fellow Democrats crossed party lines to vote for the GOP nominee.
-
Morrisey to assess abortion regulations
West Virginia Attorney General Patrick Morrisey asked the state’s two legal abortion clinics on Monday to answer a series of questions about their practices and their policies for ensuring patient safety as he investigates whether any regulatory changes are needed.
-
Education standards facing backlash
West Virginia is sticking with new standards for math, reading and writing in public schools, but faces opposition fueled by the tea party movement, which believes the benchmarks are part of an attempted federal takeover of local education authority.
-
W.Va. set to celebrate 150th birthday
When Chelsea Ruby became executive director of the West Virginia Sesquicentennial Commission a few years ago, her hope was to set up some type of ceremony in Charleston to mark the state’s 150th birthday.
-
Numerous events to mark state’s 150th birthday
A look at some free events surrounding West Virginia’s 150th birthday celebration in the coming week. For a complete list, visit www.wv150.com :
Sunday: -
Regional bank aims to grow Appalachian economy
Mike Hurley had a great opportunity: He could multiply sales and staff by converting his metal-stamping business from one that made brackets for the automotive industry into a top-tier supplier of satellite dishes to DirecTV.
-
Senators ask network to ban kids’ junk food ads
Four U.S. senators are calling on children’s cable network Nickelodeon to ban ads targeted at children that promote and sell junk food and sugar.
-
NRA going after Manchin for gun stance
After years of showering U.S. Sen. Joe Manchin with stellar ratings and campaign endorsements, the National Rifle Association targeted the West Virginia Democrat with a TV ad launched Wednesday over his continuing push for broader gun buyer background checks.
-
Active-shooter drills advised for state schools
Every West Virginia school should practice responding to a gunman’s attack at least annually, as part of a plan to guard against violence, the top prosecutor for the state’s southern federal court district said Tuesday.
-
Woman sues W.Va. clinic over abortion procedure
A West Virginia woman is suing a doctor who she claims performed an abortion procedure on her, even though she asked him to stop because she was having severe pain.
- More West Virginia Headlines
-
W.Va. House elects Miley as new speaker
