June 17, 2014
By Bob Matyi


Felman reaches power deal for WV SiMn plant, paving way for potential restart

US silicomanganese producer Felman Production and electricity utility Appalachian Power have reached a special electricity rate contract, potentially eliminating the final roadblock to a long-awaited restart of Felman's 105,000 mt/year silicomanganese plant in New Haven, West Virginia, an APCo spokeswoman said on June 17.

"We have an agreement in principle," spokeswoman Jeri Matheney said in an interview. "We're really just at a point where we're trying to work out language so we know the essentials of it. It's imminent." Details of the electricity rate have not been disclosed.

Felman spokesman John McKenna said the Florida-based company would probably not issue a public statement about the planned restart until after the power agreement with APCo, an American Electric Power subsidiary that supplies electricity to the plant, had been finalized.

Local officials with the United Steelworkers union have said they expect the plant, idled since last July, to be back in operation this month.

Once the contract is completed, it will be filed with the West Virginia Public Service Commission. However, the PSC will not need to hold any public hearings or give its formal approval. "It's just filed with them as a matter of record," Matheney said.

On May 14 the commission denied requests by several parties to reconsider a favorable April 3 electricity rate ruling for Felman.

The PSC approved most of Felman's application for rate relief, granting a discount of up to $9 million annually. The company had asked for $9.5 million a year for 10 years.

But precise terms still had to be negotiated by Felman and APCo before they could take effect.

Felman is one of only two silicomanganese producers in the US. The other —Eramet Marietta — produces silicomanganese at its plant in Marietta, Ohio.

The domestic market for silicomanganese is about 400,000 mt/year, meaning the New Haven facility supplied about 25% of the market. However, its parent company, Georgian American Alloys, imported around 100,000 mt from Georgia into the US, giving a combined market share estimated at just above 50%, according to several market participants.

While the New Haven silicomanganese plant has been a major user of electricity, it has never been APCo's largest customer. That distinction was held by Century Aluminum's long-idled Ravenswood smelter, with an approximate 300-MW load, according to Matheney. Century has been saying for a couple of years it still wants to reopen Ravenswood, idled since February 2009.