St. Louis Post-Dispatch: Large electricity users such as Noranda should not get a rate cut
Regarding “Company’s rate cut request could raise Ameren bill” (Feb. 14):
Large users of electricity, especially those whose use is relatively constant and does not increase during system peak periods, are justified in paying lower rates, and this, in fact, is reflected in the current Ameren rate structure. However, Noranda’s request for substantially lower rates, which would transfer $35 million to $40 million a year in costs to other Missouri electricity customers, would not only be unfair, but would be bad public policy.
The primary argument for cutting Noranda’s rates is that the company claims that it might have to cut 150-200 jobs at the facility if it does not receive the rate cut. Noranda seems to have forgotten already that it recently received state economic development incentives to create 29 jobs. But nonetheless, if Missouri’s citizens wanted to protect the 200 people who might lose their jobs, it would cost them less to simply pay each of those people $100,000 a year (for a total of $20 million a year), than to cut Noranda’s rates and transfer that cost to other customers.
The fact is Missouri’s electricity rates are among the lowest in the country, and the savings in electricity that Noranda could achieve by relocating elsewhere is unlikely to justify the large costs of moving operations elsewhere. Moreover, providing rate cuts to large electricity users is a slippery slope: If the largest user can get this large reduction, then why not the second-, third- or fourth-largest users?
Joseph Martinich • Creve Coeur
