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Century still reviewing PSC ruling on power rate structure

Century Aluminum officials are continuing to review Thursday's Public Service Commission special power rate ruling to see how it will affect plans to restart the company's Ravenswood plant.

"Century received notice of the Public Service Commission's ruling in the electric rate case, and our management team is currently reviewing the order in detail," Century spokeswoman Lindsey Berryhill said Friday morning.

The PSC handed down a nearly 80-page ruling that grants Century a special power rate that would reflect shifts in aluminum prices. However, the commission rejected Century's proposal to shift some costs to other ratepayers when aluminum prices were low.

Century officials said they needed a special rate structure to restart the shuttered Ravenswood aluminum smelter. The plant closed in 2009, resulting in the loss of more than 650 manufacturing jobs in Jackson County.

The PSC's ruling calls for a minimum rate that Century's power payments would have to hit over a 10-year contract period. But the company's actual monthly payment would rise or fall based on the market price of aluminum.

If aluminum prices were low, the company would be allowed to pay less than the minimum rate. If aluminum prices were high, the payment would be higher.

While Century had proposed shifting costs to other ratepayers to account for any shortfall in the amount Appalachian Power needed to charge for electricity, the ruling assigns Century liability for the gaps.  

At the end of the 10-year term, Century would have to pay the power company any amount by which it had fallen short of the minimum rate in making its fluctuating monthly payments.

The plan essentially gives Century the lower rate it wanted to support a restart of the Ravenswood plant. The only risk is the company may have to pay additional charges in 10 years.

Berryhill said the company isn't ready to say how the ruling will affect the decision to restart the plant. 

"We will be prepared to issue a more comprehensive statement once we have a thorough and accurate understanding of the PSC's decision and how it impacts our restart efforts," she said. "In the meantime, we would like to thank the PSC for its diligence, hard work and expedited review of the case."

The PSC's special rate also uses $20 million in annual tax credits state lawmakers approved earlier this year to help reduce Century's power costs.

The commission also approved the Century proposal to have Appalachian Power customers continue to absorb $17.3 million in annual fixed costs that were passed along to them after the plant closed.

These fixed costs represent general costs Appalachian Power incurs to do business and maintain its power grid. Those costs are already embedded in customers' current power rates, so keeping them in place will not increase power bills.


Contact writer Jared Hunt at or 304-348-5148.


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