Kentucky does very little to entice Century
Monday's news that Century Aluminum was buying the Sebree Aluminum plant in Kentucky struck me as funny for all the wrong reasons.
Since 2009, West Virginia lawmakers have been bending over backward to get the aluminum company to reopen its Ravenswood plant.
The Legislature first passed a bill allowing Appalachian Power to tie electricity prices to the trading price of aluminum. Last year, it passed another bill setting aside $20 million in annual tax breaks to further cut the plant's power bill.
Then the state Public Service Commission spent most of last year considering Century's special rate request plan. While it didn't give Century the power to pass off costs to regular customers, the PSC did essentially give the company the rates it was looking for.
Meanwhile, the state of Kentucky has done very little.
When Century asked Kentucky lawmakers earlier this year to pass a bill allowing the company to buy electricity for the company's Hawesville plant on the open market, lawmakers balked.
The company initially threatened to close that plant, but Century eventually hashed out an agreement with its power provider to purchase electricity prices at a floating market rate (with a slight up-charge to cover the power company's costs).
On top of that, Century announced it would spend $61 million to purchase the Sebree plant from parent company Rio Tinto Alcan, which is not too thrilled to be in the aluminum industry in the first place.
That's a significant investment — especially considering the poor performance of the global aluminum market of late.
It also shows that no matter how many special deals or tax breaks lawmakers put in state code, in the end businesses do what businesses want to do.
It actually makes good business sense for Century to buy the Sebree plant versus reopening the plant in Ravenswood.
The Sebree facility was built in the 1970s while the Ravenswood plant was built in the 1950s. Also, the Sebree facility has slightly more capacity than Ravenswood.
Plus, $61 million to buy an already operational plant is less than the nearly $90 million Century was going to have to put up to buy raw materials and hire a new workforce at Ravenswood.
In spite of all the breaks and special consideration West Virginia has given the company over the past four years, it seems to have found a better option.
West Virginia University's College of Business and Economics received high marks this week.
The school was ranked No. 9 out of 124 business schools in the country for Top Undergraduate Business Schools for Return on Investment by Bloomberg Businessweek.
The top-ranking ROI business schools are those that provide students with a good balance between tuition costs and initial starting salary upon graduation.
The University of Massachusetts-Amherst's Isenberg School of Management earned top honors in the ranking.
According to Bloomberg, a WVU business student has a median starting salary of about $45,000, which equates to about $7.77 for every $1 spent each year on tuition.