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Alcoa to Add 60 Jobs by Staff BPA Journal, February 2011

At one time there were 11 smelters in the region, consuming a third of BPA's power.

Alcoa Intalco Works announced Jan. 7 that it is preparing to restart a portion of idled capacity at its Ferndale, Wash., aluminum smelter almost immediately. The restart will be met in part by the existing sale of BPA power to the facility, with the bulk coming from market purchases. The restart is expected to be complete by April and, according to the company, would create 60 direct "family wage" jobs.

Intalco, a direct-service industry, is currently operating under a 17-month power contract with BPA while waiting for additional clarity from the U.S. Court of Appeals for the Ninth Circuit that it considers the sale consistent with sound business principles. The current power contract provides 320 megawatts at the Industrial Power rate.

Under the Northwest Power Act of 1980, certain electricity intensive industries were allowed to buy wholesale power directly from BPA. At one time there were 11 smelters in the region, consuming a third of BPA's power. Prior to 1995, DSI contracts totaled over 3,000 average megawatts. Contracts were reduced to 1,500 a MW in 2002. Over the same period, service to public utilities grew significantly. As DSI contracts shrank, disagreements arose in the region about whether BPA should continue to serve the companies.

BPA took the position that providing limited, capped benefits to the region's DSIs strikes a careful balance between retaining jobs in economically depressed areas and minimizing cost impacts to public preference customers. BPA noted that the benefits do not guarantee the aluminum companies will operate, but they improve the likelihood that the smelters' power costs will be low enough for them to continue operating.

Related Pages:
Alcoa Intalco to Restart Idled Capacity, Create 60 Jobs by Alcoa Staff, KGMI, 1/7/11