Senators Ask BPA for CFAC Solution
by Chris Peterson
Hungry Horse News, January 7, 2009
Montana Sens. Max Baucus and Jon Tester have sent a letter to the Bonneville Power Administration urging them to renogiate a power contract with the Columbia Falls Aluminum Co.
"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," the Senators wrote to Stephen Wright, the administrator of the BPA.
The Ninth Circuit Court of Appeals ruling effectively stopped a $17 million payment to the aluminum company that would have been sent this month. The payment was designed to bridge the gap between the market cost for power and what the company said it could afford to pay and stay in business.
In the end, however, the court ruled the BPA had gone too far, and was giving the aluminum company too great a subsidy at the expense of other ratepayers.
BPA has already had talks with CFAC officials and more are planned, said BPA spokesman Scott Simms.
Now the Senators have also gone to bat for the company.
"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," the Senators wrote.
"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."
But there are complicating factors in all of this. For one, aluminum prices are depressed to begin with, as the auto industry is in a severe slump.
In addition, the electricity market is also going down and a company might be hestitant to sign any long term deals if the power markets are slumping.
Still, BPA will continue talks, Simms said.
"We need to get this resolved," Simms said. "If there is a path, we want to find that path."
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