Felman delays decision on US silicomanganese plant restart

 

Platts
May 5, 2014
By Bob Matyi

Felman delays decision on US silicomanganese plant restar

Felman Production is delaying a final decision on the possible restart of its idled 105,000 mt/year silicomanganese plant in New Haven, West Virginia, until regulatory challenges to a favorable April 3 Public Service Commission ruling are resolved, a company spokesman said on May 5.

The PSC is reviewing requests for reconsideration of the decision filed by the agency's Consumer Advocate Division and the West Virginia Energy Users Group, comprising several large industrial customers.          

They object to the PSC's approval of an electricity rate discount of $9 million annually for Felman, which had sought $9.5 million a year for 10 years.

John McKenna, spokesman for Florida-based Felman, said in an interview with Platts the company was withholding a restart decision until the regulatory reviews were completed.

When that will be is unclear. PSC spokeswoman Susan Small said in an interview the commission is under no statutory deadline to rule on the CAD and WVEUG requests. Under state law, the commission is required to formally respond to the requests at some point, she added.

Felman would otherwise appear to be in a good position to restart the plant that has been idled since last July. In addition to the PSC order that gave the company almost everything it wanted in terms of a special variable power rate, the United Steelworkers union last month ratified a revised labor agreement with the company that is believed to have contained some union concessions.

Critics of the power deal want regulators to take another look at their decision, however, and revise it, at the least.

The WVEUG argues in a recent filing with the PSC it does not believe the West Virginia Legislature "intended for the operative statute in the case to require other business customers in West Virginia to effectively fully subsidize the competitiveness of a special rate customer."

CAD, meanwhile, again questioned Felman's assertion that the rate relief is needed for the plant to operate competitively in the world silicomanganese market and make money.

"Based on the information provided by Felman, there is absolutely no way for the commission, the CAD or other intervenors to determine the veracity of Felman's assertion that its plant is not profitable and, thus, was shut down," the CAD said.

"Without the benefit of audited, reliable financial statements, how can any interested party know that Felman has been truthful in its assertions and that it meets the statutory requirements for a special rate?" the CAD asked. 

Felman has said it probably would take several months to resume production if and when it decides to reopen the facility.