By Bob Matyi
17 Jan 2014

Felman not proved SiMn power relief case: WV PSC 

Felman Production has not proved it needs a special electricity rate to reopen an idled silicomanganese plant in New Haven, West Virginia, despite the company's claims the 105,000 mt/year facility is not economically "viable" without cheaper power, Appalachian Power and the West Virginia Public Service Commission staff argue in newly filed briefs.

Felman told the commission it was forced to shut down last year when the price of silicomanganese "dropped below a certain level per ton and Felman Production could no longer sustain losses resulting from the combined impact of lower commodity prices and high costs of electricity."

The company is seeking approval of a special electricity rate with APCo, an American Electric Power subsidiary, that would save the New Haven plant about $95 million annually on power costs.

But both the utility and PSC staff opposed Felman's proposal in the briefs submitted on January 14 to the commission.

"Felman Production's petition for a special rate for electricity should be denied," urged the PSC staff. "Sufficient evidence was not submitted demonstrating Felman Production qualifies for a special rate for electricity under the special rate statute."

Under West Virginia law, Felman is required to show evidence that New Haven is not economically viable without a special rate, said APCo, adding, "APCo is not certain that Felman has met this statutory requirement."

The utility chastised Felman for failing to provide sufficient financial information to support its assertions that less expensive electricity is needed before it reopens New Haven.

In documents filed with the PSC to date, Felman has done "little more than reproduce information that it already provided and that leaves APCo uncertain of Felman's qualification for a special rate," the utility said.

"Further, Felman did not provide any projections of SiMn prices in this proceeding. Rather, Felman merely asserted that there would be some times when prices would be high and other times when prices would be low, without presenting specific evidence on the projected level or duration of such high and low prices."

New Haven's peak load is 71 MW and the plant uses about 500,000 megawatt-hours of electricity annually, according to Felman.

APCo suggested, moreover, that Felman intends to restart New Haven with or without the special rate. "For example, although Felman's plant has been shut down for some months, Felman has used this hiatus to perform needed maintenance on its facilities, at a more leisurely pace and in a more cost-effective manner than would ordinarily be possible," it said.

In addition, APCo referred to December testimony by New Haven's plant manager that Felman "has been able to continue to make deliveries of SiMn to its customers from its accumulated stockpiles, and the exhaustion of those stockpiles is still 'months away.'"

Felman countered, saying the fact the plant is not currently producing product "is the strongest possible evidence" of the need for a special power rate. 

Some 72 employees are still working in the plant, Felman said. If two of the plant's three silicomanganese furnaces are restarted, the plant's payroll would increase to 155 people. And it conceivably could reach 200 employees if all three furnaces were running.