CHARLESTON, W.Va. (AP) â¿¿ Century Aluminum Co.'s shuttered West Virginia plant would pay a special electricity rate for up to 10 years if it reopens, but ultimately must cover its entire energy costs from that time, the state's utility regulator ruled Thursday.
Future aluminum prices play a major role in the plan outlined by the Public Service Commission in its 70-page order. The electricity costs, in turn, represent a key hurdle in the quest to restart the Ravenswood smelter. It idled more than 650 workers when it closed in 2009. A re-opened plant would then help partly restore health benefits for hundreds of retirees, lost after the shutdown.
If Century and utility Appalachian Power agree to its terms, Thursday's order allows the resulting special rate contract to last up to until Dec. 31, 2022. Neither Century nor Appalachian Power, a unit of American Electric Power Co., immediately responded to requests for comment Thursday.The commission's ruling would allow a rate based on aluminum prices, as Century has sought. It also keeps intact the tax credit worth up to $20 million a year, approved by the Legislature earlier this year, that's also meant to help the Jackson County smelter restart. But unlike Century's proposal, the regulator's decision would require the California-based metal producer to pay toward reducing rates for Appalachian Power's other customers once their special rate agreement ends. Century must track the differences between the special rate and a cost-based rate. If it had ended up paying more because of strong market prices, the first $200 million of the difference would count toward rate reductions. Century would keep 75 percent of any additional difference, providing the rest for the utility's other customers. But if weak aluminum prices lead to a negative balance in that tracking account, Century must pay that amount to Appalachian Power to help the utility offset the burden carried by its other customers.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts