RAVENSWOOD - A power company negotiating with Century Aluminum to reopen its Ravenswood plant has said the special rate the company seeks is risky to thousands of power customers across West Virginia.
The reopening of the plant in Jackson County had been delayed as Century and Appalachian Power Co. have yet to reach an agreement on the rate. Century has filed a petition for approval of a special power rate with the West Virginia Public Service Commission and both sides are presenting their arguments to the agency and a decision could be made by September.
Appalachian Power is concerned the proposed rate would be adjusted based on the global price of aluminum, said Jeri Matheney, Appalachian Power spokesman. If the prices for aluminum drop, more than 500,000 residential, and commercial customers would end up paying more for power, Matheney said.
Lindsey Berryhill, spokesperson for Century Aluminum, said the company did not have a comment on this issue at this time.
Using last week's price of $1,957 a ton for aluminum as an example, Matheney said if that cost would remain consistent, customers would end up paying $61.5 million annually to keep the plant in operation. If the price of aluminum goes up, the company would end up paying a higher rate.
Under that example, a customer could pay an additional $12.65 a month.
If the price of aluminum would drop to around $1,700 a ton, the company would not have to pay for any electricity to the plant and a single customer would end up paying $17.82 more a month.
''There would be no limit,'' Matheney said. ''We believe it is a slippery slope.
''There would be a greater risk to Appalachian customers than the shareholders of Century.''
Century closed its Ravenswood smelter in 2009, laying off around 650 workers. It discontinued health care coverage for retirees in 2010.
In March, the retirees of Century Aluminum accepted a deal with the company that would restore some of their lost health benefits and open the way for the Jackson County plant to reopen with aiding legislation passed by the state.
Appalachian Power supports the reopening of the Ravenswood plant as being a good move for the state, the city of Ravenswood and the retirees who recently negotiated the return of some of their benefits if the plant is operational once more.
''But at what cost?" Matheney asked.
There are no limits built into this proposal for a minimum amount Century would pay for power, Matheney said.
''The cost could be too high for our customers,'' she said. ''There is so much risk. The risk outweighs the benefit at this point.''