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Baucus, Tester Press BPA to Renegotiate Energy Prices with CFAC by Dan Testa Flathead Beacon, January 5, 2009

ENERGY PRICES A KEY PART OF CFAC'S SHUTDOWN DECISION

I touched on this briefly in my story about the shutdown of the Columbia Falls Aluminum Company, but U.S. Sens. Max Baucus and Jon Tester are calling on the Bonneville power Administration to renegotiate its power contract with CFAC. A Dec. 17 Ninth Circuit Court of Appeals decision ruled that BPA could no longer offer preferential pricing to CFAC, the way it does to other energy co-ops or "direct service providers." The subsequent rise in operating costs was among the factors cited by CFAC managers in announcing the plant would shut its doors. Baucus and Tester are, apparently, applying the full court press to BPA to make sure they work out a new contract sooner, rather than later. The senators' full press release, and letter to BPA Administrator Stephen J. Wright, is below.

BAUCUS, TESTER URGE BPA TO NEGOTIATE NEW DEAL WITH CFAC
Senators Call Columbia Falls Aluminum Co. 'Anchor of the economy'

(Washington, D.C.) - In an effort to help save jobs in the Flathead, Montana's U.S. Senators Max Baucus and Jon Tester today urged the head of the Bonneville Power Administration to quickly renegotiate a power contract with the Columbia Falls Aluminum Co.

Citing global economic troubles, low aluminum prices, and a new court order restricting its access to cheap power, CFAC announced in late December that it will lay off as many as 200 workers in 60 days.

In a Monday letter to Stephen J. Wright, the BPA Administrator, Baucus and Tester said CFAC "has been an anchor of the regional economy for nearly 55 years" and urged the power provider to implement a new contract with CFAC as soon as possible.

Baucus and Tester said that while a December 17 Ninth U.S. Circuit Court ruling struck down the manner in which BPA currently provides benefits to so-called Direct Service Industries like CFAC, it upheld the ability of BPA to continue to provide some level of benefits to the aluminum company.

"BPA has historically been a good neighbor and business partner for Montana and Columbia Falls Aluminum Company," Baucus and Tester wrote. "This relationship can and should continue."

"Columbia Falls Aluminum Company is a critical business partner for companies throughout the Northwest," the senators said. "In these challenging economic times, the first step to getting the economy back on track is to keep the good paying jobs already in the region like those at Columbia Falls Aluminum Company."

The letter to Mr. Wright is below.

Mr. Stephen J. Wright
Administrator
Bonneville Power Administration
905 Northeast 11th Avenue
Portland, Oregon 97232-4170

Dear Administrator Stephen Wright:

You are well aware of the economic importance of Columbia Falls Aluminum Company to northwest Montana. Columbia Falls Aluminum Company currently employs about 200 hard working Montanans and has been an anchor of the regional economy for nearly 55 years. The recent Ninth Circuit ruling on benefits provided to Direct Service Industries puts these workers' future at risk. In light of the recent Ninth Circuit ruling, we urge you to work quickly to implement an amended contract with Columbia Falls Aluminum Company to ensure that Columbia Falls Aluminum Company stays open for business.

BPA has historically been a good neighbor and business partner for Montana and Columbia Falls Aluminum Company. This relationship can and should continue. While the Ninth Circuit's ruling struck down the manner in which BPA currently provides benefits to the Direct Service Industries, it upheld the ability of BPA to continue to provide some level of benefits to Columbia Falls Aluminum Company.

We strongly urge you to work within the contours provided by the Ninth Circuit to come to an agreement with Columbia Falls Aluminum Company on an amended contract. Columbia Falls Aluminum Company is a critical business partner for companies throughout the Northwest. In these challenging economic times, the first step to getting the economy back on track is to keep the good paying jobs already in the region like those at Columbia Falls Aluminum Company.

Sincerely,
Max Baucus and Jon Tester