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BPA Deal Could Help CFAC with Power Costs by Chris Peterson Hungry Horse News, February 16, 2006

The Bonneville Power Administration has all but finalized a plan that could help the Columbia Falls Aluminum Company.

BPA spokesman Ed Mosey said the administration will likely adopt a plan that will "monetize" the power supply for aluminum plants up to 577 megawatts of power over three years.

The plan calls for paying out $59 million to two aluminum producers in the Pacific Northwest - CFAC and Alcoa, Mosey said.

Here's how it works: The power plants have to pay so much for electricity, say $45 a megawatt hour. But they know they can't run profitably on that rate. They need a $30 per megawatt hour rate to run. So BPA pays them the difference.

CFAC and Alcoa are the only two aluminum smelters in the Northwest that are still operating after the West Coast energy crunch in 2000-01 put most of them out of business.

CFAC is currently running one potline and employs about 120 people here, with a payroll of about $7.5 million.

The BPA plan would run from 2007 to 2009.

The plan is all is expected to be finalized when BPA sets rates in July, Mosey said. Barring any strong objections, it should be approved, he said.

The Bush plan (see related story) should not impact this plan, Mosey said.

CFAC currently uses about 70 megawatts of power.

A company representative could not be reached by presstime, but Mosey said CFAC was hoping for a better arrangement, but this was what BPA settled with.

BPA held a host of "regional dialogues" last year to discuss, among other things, the role of aluminum smelters in its future business plans.

Smelters are problematic in some respects, because they use so much power. An aluminum plant runs entirely on electricity. At full capacity, CFAC is, by far, the largest consumer of electricity in Montana.

In the 2001 energy crisis, BPA swung deals to shut down CFAC.