Century Aluminum got a lower electricity rate; will others ask as well?
CHARLESTON, W.Va. -- As part of a package to try to entice Century Aluminum to reopen its Ravenswood plant, state lawmakers and the Public Service Commission agreed to let Century pay a lower rate for its electricity than other power customers.
Century officials rejected the deal crafted by the PSC, although the company still says it wants to work with the PSC and Appalachian Power to find a deal suitable for everyone.
But Century isn't the only business in West Virginia that faces problems. If state officials were willing to give Century a break on its electricity rates, would they do it for other companies as well?
The answer seems to be no. The bill passed by state lawmakers earlier this year - which would use coal severance taxes to cut Century's power bills by nearly $20 million a year for the next 10 years -- was crafted specifically for Century, and other companies might not find lawmakers and others as eager to help.
"You have to be sensitive to try to save as many jobs as you can. Obviously, Century needed some type of assistance," said state Senate President Jeff Kessler, D-Marshall. "But you don't necessarily want to become a partner with them, or a stockholder."
Kessler said state lawmakers will be very cautious passing any legislation to help companies reduce their electric bills.
"We will be careful in getting into this. We will try to create mechanisms, without legislation, to help subsidize some of their electric bills," he said.
Several state officials and business leaders said trying to give one company lower electricity rate, while making it up on the backs of other industries and consumers, wouldn't fly. In the ruling that Century rejected, the PSC said the company couldn't put that risk on others.
If Century, or any other company, were allowed to shift its electric power costs to other companies and to consumers, that would create major problems, said Steve Roberts, president of the West Virginia Chamber of Commerce.
"Utility costs matter to employers and individuals. The costs of electricity and natural gas are major costs to employers," Roberts said. "When regulators put in place measures that make electricity more expensive, employers often make decisions based, at least in part, on those costs.
"Historically, one of the advantages West Virginia has had is almost the lowest costs for electricity and natural gas in the country. If those costs go up, we will lose that advantage, making it harder to keep West Virginia in the game."
"I would love to have the Ravenswood facility start again, for the state and for the 600 people who worked at that facility," said Tim Duke, president of Huntington-based Steel of West Virginia.
"But all the other electricity users are not an insurance company. ... I am all for development in the state and starting that plant up again, but [Century's] request was off the wall," Duke said.
Chris Hamilton, vice president of the West Virginia Coal Association, would not comment on the rates Century wants.
But Hamilton did suggest that if Century gets major cuts in its power rates, maybe cuts should go to coal companies, like Patriot Coal, that are facing financial troubles and bankruptcies.
Kessler also mentioned Patriot Coal, which recently declared bankruptcy - but noted that the costs Patriot is trying to shed includes many legacy benefits to retirees.
"We would not consider any help to any companies that would give up their legacies," Kessler said.
Months after the Ravenswood plant closed, hundreds of Century Aluminum retirees and their spouses lost their union-negotiated health benefits. The retirees agreed earlier this year to a plan to partially restore those benefits, in an attempt to help get the Ravenswood plant restarted.
"We want to get benefits back for the [Century] retirees and get people back to work if we can," Kessler said. "But it can't be a complete and permanent subsidy by taxpayers for their electric bills.
"We gave them a one-time grant. It is not an ongoing commitment."
Reach Paul J. Nyden at email@example.com or 304-348-5164.