Business
4:30 pm
Wed August 14, 2013

Public Service Commission Approves Power Contract for Century Aluminum

Credit centuryaluminum.com

The Public Service Commission approved agreements today that allow the Century Aluminum smelter in Hawesville to purchase electric power on the open market through Kenergy Coporation instead of power generated by Big Rivers Electric.

PSC Spokesman Andrew Melnykovych says Century’s electricity will still run through Big Rivers’ system, the corporation just won’t be providing electricity it generates.

“In essence what will happen is Big Rivers is going to go as Century’s agent, purchase the electricity on the open market, transmit it through its transmission system to Kenergy, which will then supply it to Century," he says. "Century in essence then pays market rates for that power.”

Century, Big Rivers and Kenergy must execute the agreements by Aug. 19 in order for the smelter to continue receiving electric service. The agreement was necessary to keep Century’s smelter open. The operation employs 700 people.

Century and a Sebree smelter owned by Century’s parent company that is seeking a similar agreement account for about 70 percent of Big Rivers’ revenue. Melnykovych says with just Century getting electricity elsewhere, Big Rivers will still lose a large portion of its revenue.

“The Century smelter is roughly a little more than a third of Big Rivers’ total load right now and about 40 percent of their total revenue, the Hawesville smelter,” he says. “ So they’re going to lose about 40 percent of their total revenue.”

Melnykovych says the PSC will make a decision on a rate increase for Big River’s within a few weeks at the earliest and by November at the latest.

An additional issue arose during the hearing for these agreements. Live line maintenance is the practice of maintaining high-voltage transmission lines while they are energized. Melnykovych says the PSC decided since it was brought up late and is an economic issue that Big Rivers and Century should settle it with each other.