KRCU: Noranda Aluminum Wants Electricity Rate Reduction
Noranda Aluminum is asking the Missouri Public Service Commission (PSC) for a cut in the electric rates Ameren Missouri charges them for power at Noranda’s smelter near New Madrid, Mo. The aluminum company also filed a complaint against Ameren estimating that the electricity company is overearning and therefore asking for the review of Ameren’s revenues.
In spring 2013, the electricity company Ameren disclosed that they earned $80 million more than authorized in 2012. Ameren is restricted in the amount of profit they can earn. That pushes Noranda to argue Ameren should reduce their rate for them.
One of Ameren’s largest customers, Noranda filed on February 13th a petition requesting the PSC to look at Ameren profits. Ameren is required to report details on their earnings to the PSC through a Surveillance Monitoring report but this document is not available to the public.
“We’ve provided testimony to the Public Service Commission that, giving current market condition, if we don’t get the rate reduction that we are seeking within the time frame we are seeking we would be required to reduce the workforce in New Madrid by 150 to 200 people,” said John Parker, vice president of communications and investor relations at Noranda.
Tennessee-based Noranda Aluminum is a major producer of aluminum in the United States. According to Parker, the company needs to have competitive power rates in order to be sustainable which they do not believe is the case right now.
But advocates with energy watchdog group Missourians for a Balance Energy Future are not convinced. Irl Scissors, executive director for the group, thinks it is up to the PSC to determine if Ameren is earning too much and believes that Noranda is trying to control Missouri’s electricity rate. That, Scissors contends, is the PSC’s job.
Scissors said Noranda already pays 60% less than the average Missouri consumer and has the lowest rate in the state.
“They have the cheapest rate of the service provider that provides them electricity and if it were to be any cheaper it would actually cost more to provide them electricity than it costs for the electricity,” Scissors says.
