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Alcoa Delays Decision to Shutter Washington Smelter by Staff Dayton Business Journal, September 29, 2003

Alcoa Inc. said it would postpone for two weeks a decision to suspend production at an aluminum smelter in Washington state as discussions continue with a regional power authority over a rate increase.

Alcoa, which employs about 400 people in Sidney, had planned to shutter its Intalco smelter in Ferndale, Wash., on Oct. 1, when the regional Bonneville Power Administration plans to increase electricity rates. But Alcoa will postpone the shutdown until Oct. 15 to accommodate discussions among elected officials and others that could mitigate the rate hike.

Bernt Reitan, president of Alcoa Primary Metals, said the company is continuing to prepare to shut down the smelter, an action that would affect 615 jobs.

"But in fairness to our employees and the community," he said, "we will wait another two weeks so there is more certainty about the costs before making a decision."

Reitan said rates charged by the Bonneville Power Administration "have risen sharply." Pittsburgh-based Alcoa, the world's largest aluminum producer, has a supply contract with the administration but the agreement expires Tuesday.

Alcoa says rising electric rates will push costs at the Ferndale smelter too high for the facility to be competitive. Alcoa presently operates two production lines there with a total capacity of roughly 110,000 metric tons per year.

Alcoa owns 61 percent of the Intalco smelter, with the remainder owned by a Japanese consortium.