CHARLESTON, W.Va. -- The two alternatives Century Aluminum presented Friday to the West Virginia Public Service Commission in the ongoing special electric-rate case still puts the Jackson County company's risks onto Appalachia Power Co.'s customers, which the PSC has adamantly rejected.
"They've proposed what they call two different alternatives but, in reality, they're after what they've been after all along, which is to ship all of their business risks onto the customers of Appalachia Power," said Byron Harris, executive director of the PSC's Consumer Advocate Division. "It's very perplexing. It's almost as if they didn't read the order that the commission [filed]. I can't understand how they think the commission would suddenly reverse itself."
Century's proposal doesn't fundamentally change anything it has been asking for, Harris said.
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."
In the Immediate Restart Modification, which includes three of the nine points from the Future Restart Modification, as well as five additional conditions, Century admits its risk is on the ratepayers.
Century proposes an annual cost shift capped at $37 million per year -- $185 million over the 10-year contract term -- to ratepayers. 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."
"The commission said 'We're going to let you lower your rate during low aluminum prices, but we're not going to push that off onto anyone else, that would be Century's responsibility,'" Harris said. "But Century is saying no. They're saying . . . it would be justified in putting other ratepayers at risk of a total of $185 million."
That is "over and above" the $22 million the PSC ordered Appalachian customers to pay when the Ravenswood plant closed in 2009, Harris said, as well as the $20 million a year consumers are paying in higher rates because of fixed costs for Appalachian Power.
Century also expects ratepayers to pay back the $90 million the company says is needed to "invest in restarting the Ravenswood smelter."
"That's not an investment. They're loaning the plant $90 million that the other ratepayers pay back in three years," Harris said. "They call it an investment, but any investment where you've got a rate mechanism that gives you recovery in three years is a short-term loan."
Century wants rates based upon the company's costs, not the cost Appalachian Power incurs to serve it, Harris said.
Century said in its proposal that the PSC order contains a fixed aluminum-rate schedule based on the Ravenswood plant's non-power production costs. However, it "does not provide an opportunity for those rates to be adjusted to reflect significant changes in the non-power production costs and premiums, which might occur over the special-rate term."