PITTSBURGH The United Steelworkers union wants Ohio Gov. John Kasich to push for negotiations that it believes could lead to bankrupt aluminum producer Ormet Corp. resuming full operations at it smelter in Hannibal, Ohio.
The union said it hopes Kasich will nudge the Public Utilities Commission of Ohio (PUCO) to bring Hannibal-based Ormet and Columbus, Ohio-based utility American Electric Power Co. (AEP) together to find a resolution to their disagreements over Ormets power rate, according to a release dated Oct. 8.
"We encourage Gov. Kasich and his administration to insist that Ormet, PUCO and AEP return to the table to resolve the issues, save our jobs and protect these (affected) communities," USW District 1 director Dave McCall said in a statement.
The USW and secured creditors have already worked with Ormets management to reduce the companys financial liabilities by $300 million, McCall said. He also questioned whether saving Ormet would increase costs to other AEP rate payers.
"Ormets major request is not for subsidies but rather to be free to purchase electricity from the grid at market price," McCall said. "Gov. Kasich has been an outspoken proponent of a market-based approach, but AEPs intransigent and short-sighted behavior has made sustainable operations at Ormet impossible," he said.
"Massive layoffs" are expected this week after PUCO last week denied most of Ormets request for an energy transition plan that would have allowed the company to build its own on-site natural gas power plant, thereby reducing electricity costs, the USW said.
Ormet said it would stop production at its Hannibal smelter and could not emerge from bankruptcy after PUCO did not grant the company all of the rate relief it had requested. The company had sought a fixed power rate, lower than the one PUCO approved, and permission to break its agreement with AEP and buy power on the open market in 2014 (amm.com, Oct. 4).
The aluminum producer filed for Chapter 11 bankruptcy protection in February, citing low aluminum prices and high legacy and electricity costs (amm.com, Feb. 26).