RAVENSWOOD - Century Aluminum is revising its request to the West Virginia Public Service Commission for a special power rate to allow the company to reopen its aluminum smelting plant in Ravenswood.
In recent filings with the West Virginia Public Service Commission, Century officials said the revised measures would reduce the risk to other customers from taking on the burden of paying for the electricity to the plant.
Officials with Appalachian Power Co. were concerned if the prices for aluminum drop, more than 500,000 residential, and commercial customers would end up paying more for power. Depending on the price of aluminum, estimates have individual customers paying from $10 to $20 or so extra a month.
''Century understands that other ratepayers and (Appalachian Power Co.) are concerned in the current economic environment with the potential for additional rate increases,'' said John Hoerner, vice president North America Operations for Century Aluminum, in documents filed with the PSC.
The changes include removing a "guaranteed profit" provision and establishing a minimum power rate of $10.50 per megawatt hour if aluminum prices fall below $1,500 a ton. Under the original request, Century would not pay anything for the plant's electricity if the price fell to about $2,447 a ton.
Century has proposed a rate floor at $1,500 a ton, Hoerner said in his documented testimony. Below this level, Century would operate at a loss, he said.
Century closed its Ravenswood smelter in 2009, laying off around 650 workers.
The reopening of the plant in Jackson County has been delayed as Century and Appalachian Power Co. have been trying to reach an agreement on the rate. Century has filed a petition for approval of a special power rate with the PSC, and both sides are presenting their arguments to the agency. A decision could be made by September.
Evidentiary hearings are set for 9:30 a.m. Monday-Wednesday before the PSC in Charleston.
Jeri Matheney, spokesman for Appalachian Power, said the power company is reviewing Century's revisions.
''We still have concerns over the level of risk,'' she said. ''There is no limit on the amount of subsidies customers would have to pay.''
If the price of aluminum remains low for a long period, Appalachian customers could end up paying a lot.
''Some of our concerns have been addressed (in the revisions), but we still have some concerns,'' Matheney said.
Appalachian is committed to continue to work with Century in getting a rate set so the Ravenswood plant can reopen, she said.
Byron L. Harris, director of the West Virginia Consumer Advocate Division, said the revisions offered by Century are mostly cosmetic in appearance.
''It is not much of a revision,'' he said. ''It really didn't change a lot.''
Harris said the notion of Century removing a "guaranteed profit" provision didn't amount to much since Century can't be effectively audited in a way to track those kinds of profits; the company could bury those profits in other places, Harris said.
Harris said the company is still seeking millions of dollars in subsidies from electric utility customers.
''I hope the commission would not allow those kind of huge subsidies,'' he said.
Hoerner said Century proposes to file quarterly or semi-annual cost information with the PSC. The company is open to other periods of review. Century's actual cost data will be filed in a confidential manner and provided to those parties which have signed a confidentiality agreement.
In a release from the company Tuesday evening, company officials said the price and demand for aluminum will continue to rise in the next 50 years.
Century is planning to invest $90 million in restarting the Ravenswood plant; however, restarting is not feasible at the current power rate of $52/MWh, officials said.
The company is hopeful the PSC will make its ruling by Sept. 9 with a full restart of the plant expected in 2013. The restart could create around 470 new direct jobs and 200 indirect jobs.
''Century believes that the Ravenswood smelter is capable of producing aluminum profitably for decades,'' Hoerner said in his testimony. ''Additional investment will be required to accomplish that.
''Depending on the terms of the special rate, and if sufficient margin is produced during the special rate term, I expect Century will then make further modernization investments in Ravenswood.''
(The Associated Press contributed to this story.)
