By Bob Matyi
November 12, 2013 

West Virginia sets hearing on silicomanganese producer Felman's rate request 

West Virginia regulators will hold next month a public hearing on US silicomanganese producer Felman Production's request for a 10-year special electricity contract the company says is needed to restart at least two of three idled furnaces at the New Haven plant.

The evidentiary hearing will take place December 9 and 10 at the West Virginia Public Service Commission offices in Charleston, PSC spokeswoman Susan Small said Tuesday.

It is unclear how long it will take the PSC to issue a ruling on Felman's application following the hearing, but it appears unlikely a decision will be made before early 2014.

In testimony filed last week with the PSC, John Konrady, Felman's plant manager, said electricity represents about 20% of the plant's total cost of production, "our largest expense after the ore and other reagents."

American Electric Power subsidiary and Felman's electricity supplier Appalachian Power has held discussions with Felman about a special power contract. APCo, in testimony also submitted to the commission last week, acknowledged it has a "reasonable arrangement" on electricity with Eramet Marietta, a rival silicomanganese and ferrosilicomanganese producer in neighboring Ohio.

Currently, APCo supplies Felman under an interruptible-type rate that other large manufacturers also receive. Neither APCo nor Felman has disclosed the rate.

Felman's special rate request is specifically tied to a target margin that would be derived from independent indexes related to the selling price of silicomanganese and costs of raw materials, excluding electricity.

If the market index was greater than the target margin, Felman would pay a premium to the benefit of other APCo customers. The discount would be limited to $9.5 million a year. 

According to Konrady, New Haven can produce about 105,000 mt/year of silicomanganese with all three furnaces running. The domestic market for silicomanganese is about 400,000 mt/year, with Felman representing about 25% of the market.