Alcoa, BPA reach power agreement

This long-awaited power deal will supply the aluminum smelter with enough electricity to power two-thirds of the facility and keep...

By Isaac Bonnell

At midnight on Dec. 22, employees at Alcoa Intalco Works started up the aluminum smelter with a renewed sense of job security and a new source of power.

The previous day the company reached an agreement with the Bonneville Power Administration (BPA) to provide the smelter with 320 megawatts of electricity at a reduced industrial price rate. That is enough energy to operate two of the three potlines — which is about where the company is currently — and to produce 184,000 metric tons of aluminum per year.

“This is a great day for Intalco,” said plant manager Mike Rousseau during the Dec. 21 event at the facility. “It’s been a long journey and a lot has taken place this year. It’s been a roller coaster ride for our community.”

Rousseau has been working for more than two years to secure a long-term power agreement with the BPA, but every new plan has been interrupted by a declining global demand for aluminum or court decisions that restrict the BPA from giving special rates to industrial customers. BPA stopped supplying Alcoa with direct power in 2006 and the facility has been purchasing power on the open market since then at a much higher cost.

Though the new agreement is a short-term agreement for only 17 months, it represents a legal middle ground and a possible way forward, said BPA Administrator Steve Wright

“We think this agreement fits with the decision of the court, but also challenges it,” Wright said before signing the agreement in front of a crowd of more than 300 Alcoa workers and their families. “Every proposed agreement has been litigated and this litigation will be really important to the future of this plant.”

Gov. Chris Gregoire also attended the event and said she will stand by the BPA and its decision to support local industries with cheap power.

“We’ll be with you in the 9th Circuit Court of Appeals, or any court for that matter,” Gov. Gregoire said.

The agreement will likely be challenged in court by state public utility district officials who contend that the utilities should be preferred over industrial customers when it comes to distributing cheap hydroelectric power.

Despite the impending legal battle, Rousseau sees the power agreement as a win for the Ferndale smelter. Alcoa operates seven other smelters in the United States, several of which have been closed or curtailed because of rising electricity prices and decreasing aluminum prices. This agreement will keep 528 jobs from disappearing and will allow Intalco Works to be better positioned for an economic recovery, Rousseau said.

“This economy will change and we want to be a player,” he said.

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