Metals sector seeks cleaner, cheaper electrical supply

Oct 31, 2012 | 07:00 PM | Nathan Laliberte

Tags  American Iron and Steel Institute, Brett Smith, Aluminum Association, Charles Johnson, Commerce Department, Nathan Laliberte

Over the past decade, stepped-up environmental initiatives have led to increased federal regulation of utilities, presenting challenges for metal producers whose core business relies on a steady supply of electricity. In response to these policies, as well as increased pressure from international competition, mills and the associations that represent them have taken a two-pronged approach to securing their access to affordable, uninterrupted electricity: advocating for federal policy reform, and working to develop new technologies designed to reduce reliance on utilities.

Brett Smith, senior director of government relations at the American Iron and Steel Institute, said that the steel industry has increased its efforts to advocate for policies that would ensure a reliable supply of affordable electricity. These efforts, Smith said, have become increasingly difficult to advocate, largely because of new emissions standards set by the Environmental Protection Agency for domestic utility companies. “The EPA is in a position now of either proposing or currently regulating the utilities themselves for their emissionsÑwhether those emissions fall under the Utility MACT (maximum achievable control technology) regulation or the Cross State Air Pollution Rule,” he said. “Those regulations and the cost of those regulations and the risks associated with them are oftentimes, if not always, passed on to the large industrial customers like steel facilities.”

What’s more, Smith believes that coal-fired utilities and production facilities reliant on their electricity will begin to face challenges as a result of increased government oversight over the next 12 months. In a report to the House of Representatives, the AISI indicated that “these regulations would negatively impact the steel industry either through direct impact on its use of coal or through the consequences on the coal-fired utilities from whom the industry purchases electricity.”....