Passage For Century Aluminum Bill

As a group of Century Aluminum retirees looked on Friday at the State Capitol, members of the state Legislature approved a bill that is expected to be a key part of efforts to reopen the company's Jackson County facility.

However, Charleston Attorney Tom Heywood, who represents Century Aluminum, says it is only one piece of a larger, more complex puzzle when it comes to finding a way to get more than 400 people back to work in Ravenswood.

"This is a necessary but, perhaps, not sufficient step in the restart of Century Aluminum," Heywood told lawmakers on Friday evening before both the Senate and House of Delegates approved the tax credit plan during a brief Special Session.

As part of the Energy Intensive Industrial Consumers Revitalization Tax Credit, a tax credit of up to $20 million a year will be available for the next ten years to Century if certain conditions are met.

It is designed to be a partnership, drawing on coal severance tax money, between the coal companies, the utilities that use that coal to generate power and the companies that use that power in large amounts, like Century.

"From the taxpayer perspective, in this case, which is the coal company claiming the credit, they would simultaneously send to the utility the amount that they would otherwise pay in taxes to the State Treasury and they would claim a credit on their tax return of a like amount plus a 3% charge for the administrative burden of that complex procedure," Heywood explained.

So, instead of paying severance taxes to the state, a coal company would pay the same amount to Century with the idea being that a fully operational Century generates money for the state in many other ways.

The state Public Service Commission would oversee the process.

As approved, the tax credit is only available in instances involving a contract demand of at least 250,000 kilowatts of electric power in a West Virginia facility. There is also a requirement for the creation of 150 new jobs, providing more than 300 jobs total.

Jackson County Delegate Mitch Carmichael spoke in favor of the bill.

"This is a net positive for the people of West Virginia," he said because an operating Century helps keep down electric rates for customers of Appalachian Power. "The fixed costs of producing electric will now be spread out over a greater burden."

Century Aluminum, when operating, is one of Appalachian Power's largest customers and when the price of aluminum dropped, the company had a difficult time paying its bills. More than 600 people lost their jobs when the Century site closed in 2009.

As part of the legislation, unused amounts of the $20 million each year can be rolled over, up to certain levels. The unused credits, though, will expire at the end of ten years.