Century to PSC: Reconsider electricity ruling
CHARLESTON, W.Va. -- Century Aluminum offered the West Virginia Public Service Commission two alternatives to the special electric-rate case Friday that the company said would allow its Ravenswood plant to restart.
Earlier this month, Century rejected a PSC ruling that said the company could pay a lower rate for electricity -- which the company had required as a condition of reopening the shuttered Ravenswood plant -- but said the company's risk couldn't be placed on other Appalachian Power customers.
Century officials had asked to extend the deadline to file petitions asking the PSC to reconsider its order until Nov. 1. The PSC gave the company, and other agencies, until Friday.
In Friday's filing, Century said one of its plans -- an "Immediate Restart Modification" -- would allow the Ravenswood plant to open sometime in 2013. Under the other -- a "Future Restart Modification" -- the plant wouldn't open until "sometime in the future when [aluminum] prices materially increase."
Century released its filing at 5 p.m. Friday, and the company was still working on a statement late into the evening.
Century said the modifications are necessary because the PSC's Oct. 4 order does "not justify a decision to invest $90 million in restarting [the] Ravenswood" smelter.
Among the nine terms in the "Future Restart Modification," Century said it should be able to terminate the contract for a special power rate at any time. Doing this would provide "Century with additional flexibility to meet its electric costs in an economical manner," the company stated in its filing.
The "Immediate Restart Modification" includes three points from the "Future Restart Modification," as well as five additional conditions.
Century proposes an annual cost shift capped at $37 million per year to ratepayers, which the PSC has rejected in the past. The PSC has said any risk that the company won't pay enough for its power would have to be assumed by the company, not other Appalachian Power customers.
However, Century said in its filing, that any deficit "would be the responsibility of the other ratepayers . . . . This cap limits the risk to other ratepayers."
Another provision in the alternative that could open the smelter by next year states that the special-rate contract with Appalachian Power "must be signed by Dec. 31, 2012, so Century qualifies for full annual tax and fixed cost credits."
"Century needs to obtain all of the benefits of the tax credits and the fixed cost credits in order to restart in 2013."
The Ravenswood plant closed in 2009. Century officials said that, to reopen the plant, the company would need a special rate for electricity based on the changing price of aluminum. The PSC's Consumer Advocate Division had argued against Century's proposal, saying that other Appalachian Power customers would see an increase in their bills.
The PSC's Consumer Advocate Division and the West Virginia Energy Users Group jointly filed a motion for clarification Friday regarding the special electric-rate case.
Among the numerous points made by the CAD and WVEUG, both groups "believe strongly that there should be no reduction in [aluminum] rates until after ratepayers receive a payback of the annual $20 million fixed cost credit."
Appalachian Power also filed a petition Friday for clarification and reconsideration of the PSC's Oct. 4 order. Appalachian Power questioned Century's "exposure to the volatile and cyclical aluminum industry."
Appalachian Power said in its filing that, after reviewing Century's financial position, it "discloses legitimate causes for concern."
"It is reasonable to doubt that Century Aluminum Company, whose financial prospects -- and even survival -- depend on the [changes] of the aluminum market, could offset serious losses resulting from those very same [changes]," the utility company said in its filing.
All parties have 10 days to respond to Century's petition. The PSC's final decision will be decided after those 10 days.
Reach Megan Workman at email@example.com or 304-348-5113.