14 JUNE 2013Surfky.com
Century Aluminum completes purchase of Alcan
Edited by : AL CIRCLE
2 min read
Officials with Century Aluminum took the first step last week towards solidifying the status of Rio Tinto’s Alcan Sebree Works Smelter by completing the acquisition of the plant and its 500 employees.
The future of both plants has been in question since Century notified Henderson-based Big Rivers Electric in August 2012 that it intended to cease electric service in 12 months.
That was the first domino to fall in a series of events that threatened the economic fabric of the surrounding counties. In January 2013 Big River’s filed for a more than 20% rate increase with the Public Service Commission in Frankfort, stating that with the loss of its biggest customer that it would need to recoup money from everyone else.
A few weeks later Rio Tinto notified Big Rivers that it also intended to cease electrical operations.
Alcan officials stated that it was paying around $50 per megawatt-hour (mWh). The proposed increase would take them to about $60, which officials report is considerably higher than the national average paid by American aluminum smelters. $60 a mWh would be around 6 cents per kilowatt-hour (kWh).
The battle, in the end, moved to the state capitol, where legislators debated over the right of the two smelters to purchase electricity on the open market.
In mid-April Century issued a conditional notice to employees at its Hawesville, KY aluminum smelter of its intent to curtail 100% of plant operations on August 20, 2013 if the plant could not secure a competitively priced power contract. The announcement was made pursuant to the federal Worker Adjustment and Retraining Notification Act (WARN). The company also gave conditional notice to terminate its supply contract with its largest customer, the Southwire Company, given the potential plant closure effective August 20.
On April 30, 2013 Big Rivers and Century reached a tentative agreement. Under the provision, the electric supplier would purchase the power on the open market and then pass it to Century at market price, plus the additional costs incurred by the transmission.
The future of both plants has been in question since Century notified Henderson-based Big Rivers Electric in August 2012 that it intended to cease electric service in 12 months.
That was the first domino to fall in a series of events that threatened the economic fabric of the surrounding counties. In January 2013 Big River’s filed for a more than 20% rate increase with the Public Service Commission in Frankfort, stating that with the loss of its biggest customer that it would need to recoup money from everyone else.
A few weeks later Rio Tinto notified Big Rivers that it also intended to cease electrical operations.
Alcan officials stated that it was paying around $50 per megawatt-hour (mWh). The proposed increase would take them to about $60, which officials report is considerably higher than the national average paid by American aluminum smelters. $60 a mWh would be around 6 cents per kilowatt-hour (kWh).
The battle, in the end, moved to the state capitol, where legislators debated over the right of the two smelters to purchase electricity on the open market.
In mid-April Century issued a conditional notice to employees at its Hawesville, KY aluminum smelter of its intent to curtail 100% of plant operations on August 20, 2013 if the plant could not secure a competitively priced power contract. The announcement was made pursuant to the federal Worker Adjustment and Retraining Notification Act (WARN). The company also gave conditional notice to terminate its supply contract with its largest customer, the Southwire Company, given the potential plant closure effective August 20.
On April 30, 2013 Big Rivers and Century reached a tentative agreement. Under the provision, the electric supplier would purchase the power on the open market and then pass it to Century at market price, plus the additional costs incurred by the transmission.
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