RELEASE: Cement Co. to PSC: Reduce Noranda’s Rate? Reduce Ours Too!
PSC Faces Opening Pandora’s Box with Noranda Rate Shift Case
Jefferson City, MO – In the latest twist to Noranda Aluminum’s request to the Pubic Service Commission (PSC) for an electric rate reduction that would saddle Ameren Missouri customers with between $500 million and a billion dollars in rate increases, Continental Cement asks the PSC for a rate reduction as well, saying that if Noranda gets special treatment, so should other businesses.
Continental Cement’s Vice President of Engineering and Projects, J. Scott Conroy, said in his rebuttal testimony to the PSC, “Continental, like Noranda and many other industrial or commercial firms, would greatly benefit from a reduction in Ameren’s rates for electric service. If the Commission is inclined to reduce Ameren’s rate for service to Noranda, the Commission should reduce the rate for Continental as well. Otherwise, the Commission should deny the relief requested in Noranda’s complaint entirely. Giving a particular class of Ameren customer a rate reduction below its cost of service and imposing that cost on other customers is unfair and should be rejected.”
Noranda Aluminum, a Tennessee company with a smelter in New Madrid, MO – over 100 miles from 90 percent of Ameren Missouri customers – bases their rate shift request on the need for economic relief. However, Missouri consumers that have opposed the rate shift argue that a shift of millions of dollars onto other businesses and residents would cause further economic hardship. When asked recently by a financial analyst whether this was true, Noranda’s CEO said he would not comment.
Furthermore, Missourians for a Balanced Energy Future (MBEF) called on the General Assembly to address the rate shift request as the rightful forum to discuss economic development policy, since the PSC lacks the authority to grant economic relief packages. If the PSC does grant Noranda’s request, it is likely to lead to an unintended consequence of endless numbers of businesses facing financial challenges to seek relief through utility rate reductions before the PSC.
“This is why the PSC is not the forum to grant economic relief, especially on the backs of other Missouri consumers. Noranda has put the PSC in a position that, if the PSC grants this rate shift, they would be opening up Pandora’s Box and every business could make the same case for a rate reduction. And, at that point, where does it end? Which companies are worthy of a reduction and which are not? This, again, comes down to another question of fairness,” MBEF Executive Director Irl Scissors said.
Additionally, there is reason to believe that Noranda’s relief may actually be more geared to pad profits for its parent company. Noranda announced that it would pay dividends to shareholders again this month, marking the second such payment in just five months of 2014. And the company that owns and controls Noranda, hedge fund Apollo Holding Corporation, sold 10 million shares of Noranda with all proceeds going to Apollo, not Noranda. In light of news that Apollo’s CEO made $500 million last year, moving his rank on the Forbes billionaires list from 299 to 240, the financial controls and decisions being made for Noranda do not appear to have the company’s financial health in mind.
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Missourians For A Balanced Energy Future | moenergyfuture.org |
