CHARLESTON, W.Va. -- If Century Aluminum wants to restart its Ravenswood plant, the company may have a special rate for electricity, but not at the expense of other Appalachian Power customers, the state Public Service Commission ruled Thursday.
Century officials said that in order to restart the plant, which closed in 2009, Century would need a special rate for electricity based on the price of aluminum. The PSC's Consumer Advocate Division of the PSC had argued against Century's proposal, saying that other Appalachian Power customers would see an increase in their bills.
PSC commissioners Michael Albert, Jon McKinney and Ryan Palmer issued a ruling on Thursday that "rejects Century's proposal to place the risk of revenue shortfalls on other APCo customers," according to a statement from the PSC.
"It places that risk, instead, on Century, and requires Century and its parent company to enter into a corporate guarantee and undertaking with APCo to assure payment of any revenue shortfalls and to otherwise comply with the conditions of the order."
If Century accepts the PSC's terms, the company would have to enter into a contract with the commission until at least Dec. 31, 2021. The contract could also be extended to cover a full 10 years, according to the statement.
The PSC's ruling allows Century to pay a price for electricity based on the price of aluminum, which the company had wanted.
At the end of the contract, if Century paid more for electricity than it should, the first $200 million of the difference would go to reduce rates for Appalachian Power's other customers. Any overage above $200 million would be split, with 75 percent going to Century and 25 percent going to reduce Appalachian Power rates.
If, because of low aluminum prices, Century hadn't paid as much as it should have by the end of the contract, Century would have to make up the difference with Appalachian Power.
"The commission has set a minimum rate for Century but they will allow the cash rate that Century pays to go below that minimum rate," Byron Harris, director of the PSC's Consumer Advocate Division, explained Thursday. "The difference between the cash rate and the minimum rate will be guaranteed to be paid back by the parent company of Century."
Harris said the rate had good points and bad points.
"That corporate guarantee is not perfect," Harris said. "It's a good thing but it's not perfect. Corporations go bankrupt. We're talking about a mechanism that will last for 10 years."