HomeGAA in the MediaNewsUSW endorses Eramet power rate discount extension

 

Platts
March 23, 2015
By Bob Matyi

 USW endorses Eramet power rate discount extension

The United Steelworkers union has endorsed Eramet Marietta's request for an extension of a discounted electricity rate, warning the French-owned company may close its manganese ferroalloys plant in Marietta, Ohio, if the application is not approved by state regulators.

"I believe if we don't get this extension, we will probably shut down," Steven Brown, president of USW Local 1-00639-01 at Marietta, said in an interview on March 23.

Earlier this year, Eramet asked the Ohio Public Utilities Commission to extend a "reasonable arrangement" concerning electricity rates with American Electric Power that took effect on October 28, 2009, for an additional year through 2020. The deal is currently scheduled to expire at the end of 2019.

Eramet says it needs the extension to justify spending up to $25 million at Marietta to comply with a US Environmental Protection Agency hazardous air pollution rule expected to be issued in May 2015, with compliance due in May 2017.

Despite its arrangement with AEP, Eramet says the plant experienced "significant increases" in the delivered price of electricity between January 2010 and December 2014, although figures have not been publicly disclosed. Brown said the Marietta plant operates on thin margins and he believes the extension is necessary to keep it open.

"I know this is very important to us," he said. "Because of the rate discount we got several years back, we were able to make major improvements."

In a March 19 letter to the PUC, Brown cited the "benefit of well-paying jobs" supplied by Eramet, adding the company spends $65 million annually in employee and retiree benefits as well as taxes to support schools, hospitals and local communities.

The Ohio Office of Consumers' Counsel, the state's residential utility watchdog, recently told the commission that Eramet had failed to demonstrate the extension request was "just and reasonable" and it should not be approved.

Brown and the USW are concerned about Eramet's future in light of bankrupt Ormet's decision in October 2013 to close its 260,000 mt/year Hannibal aluminum smelter, also in southeastern Ohio, as a result of a similar power rate dispute. The plant, which once employed more than 1,000 people, was subsequently sold and is not expected to reopen.

The Marietta plant continues to produce both silicomanganese and ferromanganese at its two operating furnaces. The company has not decided if it will restart Furnace 18, which has been out of service since March 9, 2010, when a pressure buildup blew material off its top.

Eramet does not disclose capacity figures. Felman Production's plant in New Haven, West Virginia, is the only other silicomanganese producer in the US.

A PUC decision on the extension is expected this spring.