Get Connected
  • facebook
  • twitter
Print

Century Aluminum response to utility board ruling draws criticism

CHARLESTON, W.Va. - Calling it an "ultimatum," attorneys representing Appalachian Power and state consumer groups scoffed at Century Aluminum's recent response to a Public Service Commission ruling in its special rate case.

Last month, Century asked the PSC to reconsider the special rate structure for its shuttered Ravenswood plant. While the PSC essentially gave Century the rates it was looking for, it put Century on the line for any shortfalls accrued over the next 10 years.

Century, which had proposed pushing those shortfalls onto other ratepayers, said it would not be able to open the idled Ravenswood plant under that plan.

It proposed two alternatives that would lead to a restart either immediately or when economic conditions improved. Century also asked the PSC to reconsider shifting costs to other consumers.

Attorneys for Appalachian Power, the PSC Consumer Advocate Division and other groups filed responses to Century's petition with the PSC late Monday.

Century responded to a reasonable rate plan with unreasonable demands, said Derrick Williamson, attorney for the West Virginia Energy Users Group, which represents several large manufacturers in the state.

"Century's petition actually smacks of an ultimatum, warranting that it will not restart its Ravenswood smelter unless the Commission and the parties accept its demands (some new; some old and already rejected by the Commission)," Williamson wrote in his filing.

Consumer Advocate Division attorney Jackie Roberts said Century did not seem to understand the PSC's original ruling and seemed to think special power rates were an "entitlement" under state law.

"Century is wrong," Roberts said.

Attorneys for Steel of West Virginia Inc. - which was allowed to be a party in the case but remained mostly silent - also filed a response blasting Century's motion as nothing more than a negotiating ploy.

"Century's response to the Commission's Final Order, although styled as a Petition for Reconsideration, is clearly a counteroffer," the response said. "The time for negotiation and the receipt of factual evidence in this case has passed, and Century's attempt to turn a Final Order into a mere offer is inappropriate."

During hearings before the PSC, Century offered expert testimony saying aluminum prices would improve over the next decade. Company officials said this would insulate other ratepayers from having to absorb any unreasonable increases in power costs.

But when the PSC put Century Aluminum - not ratepayers - on the hook for any shortfalls, Century came back and said it was not willing to shoulder that risk. Steel of West Virginia attorneys called Century out on that point.

"This assertion should be seen for what it is - clear and convincing evidence that Century's parent itself lacks confidence that Century Aluminum of West Virginia, Inc. can successfully operate a restarted Ravenswood plant," the filing said.

"In other words, Century's parent is unwilling to 'put its money where its mouth is.' "

In its response to the PSC ruling, Appalachian Power asked that the PSC require Century Aluminum Corp. - not just subsidiary Century of West Virginia Inc. - to put forth a letter of credit that would cover any shortfalls should the subsidiary go out of business.

Century said that would be too much financial risk.

Appalachian Power said it is now apparent that Century has no interest in bearing any type of long-term risk to operate the plant.

"It will have recouped its start-up investment within three years and, after that, it seems willing to let the prospects of (Century of West Virginia) rise and fall with the global aluminum market, confident that the risks of low aluminum prices and failure of the venture will fall on the shoulders of APCo, APCo's other customers, and West Virginia taxpayers, workers, and retirees," the APCo filing said.

Appalachian Power asked the PSC to reject Century's alternatives.

"The special rate mechanisms which Century favors are not remotely evenhanded: they confer subsidies of unwarranted magnitude on Century; they transfer the business risks of Century to an unwarranted degree to APCo and its other customers; they impose unreasonable financial burdens on APCo and its other customers; and they relieve Century and its parent of any practical responsibility for the potentially immense revenue shortfalls that Century's special rate proposals could produce," the filing said.

Now that parties in the case have responded, the PSC can decide if it wants to take further action to clarify its initial ruling.

While Century has a right to have its case reconsidered, it appears unlikely the PSC will modify key aspects of the special rate structure it laid out last month.

Commissioners made clear to Century that they would not shift any additional costs onto other ratepayers. When they extended Century's deadline to file reconsideration motions, they also indicated they were not open to reconsider this shift.

Commissioners must review all the filings that have been submitted before deciding whether to take further action.

Contact writer Jared Hunt at jared.hunt@dailymail.com or 304-348-5148. 


Print

User Comments