American Metal Market
June 12, 2014
By Daniel Fitzgerald

Felman looks to restart output in June

NEW YORK - Falman Production LLC is hoping to restart its New Haven, W.Va., silicomanganese plant by the end of June, but has yet to reach an agreement with electricity supplier Appalachian Power Co. (APCo).

Felman will "initially restart two of its three furnaces" at the New Haven plant, although details on production volume weren't made available to the public, the company said in a June 10 filing with the West Virginia Public Service Commission.

Felman and APCo are in agreement as to certain aspects of the new power deal, the Letart, W.Va.-based

company noted, adding that Felman "does expect to reach a total agreement with APCo" by June 30.

"Felman is greatly desirous of restarting the New Haven plant as promptly as possible, preferably before June 30. In order to do so, Felman needs to have the terms of its special contract with APCo resolved," the company said.

The filing was in reply to the petition for clarification from  APCo  (,  May 28), which noted that the two companies could not reach a new power agreement due to "different views" over  the  nature  of the special rate order handed down by the commission in April (, April 3).

APCo'scalculated per-megawatt-hour discount in its petition "is both legally and factually flawed and should not be used in a special contract implementing the commission’s orders," Felman claims in the filing.

"Felman disagrees with the legal analysis, factual basis and the methodology proposed in the petition for determining Felman's maximum annual discount for low usage years," the filing states.

"The principle which the special contract implementing the commission-approved special rate should follow is that in low usage years Felman's maximum annual discount will result in Felman  paying  its variable costs in full and making a $500,000 contribution to APCo's fixed costs (while) the commission conducts rate proceedings for APCo which determine APCo's fixed and variable costs," it added.

"Felman prays that the commission issues an order resolving the petition by rejecting APCo's proposed  per MWh discount and instead adopting as a second limit on the maximum annual discount in low-usage years the difference between the total amount of charges applicable to Felman over a 12-month period under the reference charges in its special contracts less the (expanded net energy cost) charges applicable to the annual volume of usage over that same period, and less $500,000”, it said.

Silicomanganese market participants are closely monitoring the return of Felman, previously  the  industry's dominant supplier, to the domestic market (, May 30).