Commission sets date for response to power rate request
The state Public Service Commission has set a Dec. 14 date to respond to requests to reconsider the special power rate it proposed for Century Aluminum's Ravenswood plant.
But in the order setting that date, the commission took issue with the way Century has responded in the case.
Century has been working with the state officials all year to craft a special power rate for its shuttered Ravenswood aluminum smelter.
The plant closed in 2009 after the Great Recession triggered a sharp sell-off in global aluminum prices. More than 650 workers lost their job when the plant shut down.
Because the plant's power bill is its highest single expense, Century executives have said the company needs a flexible rate structure that will protect it from wild fluctuations in commodity prices.
The company had asked for rates that rise and fall with aluminum prices. It also proposed shifting costs onto other Appalachian Power ratepayers to make up some costs when prices were low.
In October, commissioners approved a special power rate structure for Century Aluminum. They essentially gave Century the rates they wanted, but said the company would be on the hook for any short payments to the power company.
Century balked at that idea.
In late October, the company filed a petition with the PSC asking commissioners to reconsider their decision.
In their request, Century proposed two alternative rate plants that executives say could lead to a restart either immediately or when economic conditions improved. One of those alternatives still shifted costs onto other APCo ratepayers.
Critics blasted Century's reconsideration request, calling it a negotiating ploy and an ultimatum to get the plan they had originally asked for.
In an order Friday, the PSC set a tentative date of Dec. 14 to decide whether to grant reconsideration of some aspects of their original decision in case.
The commission could allow additional testimony or arguments over some aspects of the original plan.
But it now appears unlikely the commission will be open to the major changes Century had asked for in their reconsideration request.
In their Friday order, commissioners seemed to side with some of Century's critics who claimed the company was using the proceeding as simply a negotiating ploy.
"The reconsideration request appears to have the tone of a negotiation counteroffer instead of a pleading in a formal case before the Commission," the order said.
"Obviously, the Commission is not a party to 'negotiations' when executing its statutory duties, including reconsideration of a Commission Order," it said. "If Century intended to negotiate a special rate mechanism, the appropriate procedure would be negotiation between Century and other interested parties."
In other words, if Century wanted some other type of rate, company representatives need to negotiate that with officials at Appalachian Power first.
For its part, APCo has expressed separate reservations about the PSC's special rate. The power company expressed concern over the fact that Century would not have to pay for any shortfalls in their rate until the end of the 10-year contract.
The company said in filings it had serious doubts about the financial strength of Century. Power officials feared Century's financial woes could hurt the power company's financial ratings if they had to enter into a long-term contract with the company.