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Union workers approve Felman contract

By Jared Hunt, Business editor

Union workers at Felman Production have approved a new collective bargaining agreement with the company, bringing the idled Mason County manufacturer one step closer to restarting operations.

The union vote comes as the state Consumer Advocate Division and an industry advocate group want the state Public Service Commission to reconsider the special power rate plan it recently approved for the company.

Members of United Steelworkers Union Local 5171 voted Thursday to approve the new agreement.

“We are pleased to reach an agreement with the United Steelworkers Local Union 5171 that allows for important modifications to the current collective bargaining agreement,” Felman CEO Mordechai “Motti” Korf said in a statement.

“This necessary development brings Felman another step closer to resuming operations and further strengthens the plant’s long term viability,” he said. “We thank Local 5171 for its support.”

Felman shuttered most operations at its New Haven plant last June, citing rising production costs and poor market conditions. More than 140 employees were laid off during the process.

In August, Felman submitted an application to the state Public Service Commission for approval of a 10-year special power rate contract to help restart the plant.

Felman produces silicomanganese, a deoxidizer that allows steel companies to produce a purer type of steel. It’s made by taking three raw ingredients — manganese ore, coke and coal — and heating them to 3,000 degrees Fahrenheit in an electric arc furnace.

Electricity represents 20 percent of production costs, and the company’s power rate had risen nearly 45 percent since 2008. Felman said a more favorable power rate would allow it to compete globally.

Earlier this month, the PSC approved a special rate plan that would allow the company to take up to $9 million in annual discounts on its power bill.

Under the PSC plan, Felman’s rates would be set on a monthly basis. In months where the company’s material prices are less than a set target, Felman gets discounts. In months where prices are more than targets, Felman will pay a premium.

Appalachian Power, the PSC’s Consumer Advocate Division, and state manufacturing groups opposed Felman’s request, saying power customers should not be forced to subsidize a private business.

On Friday, the Consumer Advocate Division and West Virginia Energy Users Group, which represents several major manufacturers across the state, asked commissioners to reconsider their decision.

The Energy Users Group said that while it supports special power rates for large industrial users, the commission’s rate plan pushes nearly 95 percent of the costs onto other customers, allowing the power company and Felman to avoid most of the risk involved in the plan.

“This is neither fair nor reasonable, would result in an undue burden on other customers, and is contrary to the law,” the group’s filing said.

The Consumer Advocate Division also said Felman officials did not make a sufficient case demonstrating why the special rate was necessary to reopen the plan.

Felman has yet to file a response to the reconsideration requests. The company has already reached out to Appalachian Power to begin setting up a power contract consistent with the PSC’s rate plan.

Contact writer Jared Hunt at business@dailymailwv.com or 304-348-4836.


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