NEW YORK Ormet Corp. will
shut a second potline at its 270,000-tonne-per-year Hannibal,
Ohio, smelter, chief executive officer Mike Tanchuk told
Ormet began taking the potline
offline last week and will complete the curtailment by Aug. 31,
reducing its overall capacity by one-third, or about 90,000
tonnes per year, according to Tanchuk.
Ormet announced in July it would
curtail one of the six potlines at Hannibal, citing low London
Metal Exchange aluminum prices and high energy costs (
amm.com, July 20). Three-month aluminum on the LME
ended last week at $1,901.50 per tonne, down 19.1 percent from
this years high of $2,349 per tonne in late February.
Ormet notified state officials
in a July 19 letter that it may shut the entire operation,
filing Worker Adjustment and Retraining Notification (WARN) Act
notices to the 998 workers who would be affected by the
amm.com, July 25). Tanchuk declined to comment on
Ormets plans for the remaining four potlines, telling
AMM the company does not "speculate on the
Still, Ormet has said in the
past that in addition to low LME prices, proposed power rate
increases by American Electric Power Co. (AEP) would "strain"
the smelters ability to continue operating (
amm.com, July 5).
The Public Utilities Commission
of Ohio (PUCO) voted in early August to approve a modified
electricity security plan for AEP Ohio that would freeze
current base generation rates through May 31, 2015. It also
sets a schedule for AEP to transition to a competitive market
in which generation rates will be set through a competitive
bidding process beginning June 2015. AEP will conduct an
energy-only auction for 10 percent of its standard service
offer (SSO) load, followed by a second energy auction for up to
60 percent of the SSO load on June 1, 2014, and a third for 100
percent by Jan. 1, 2015, a PUCO spokesman told AMM.
Auctions allow other generating and energy companies to bid for
the right to sell to AEP customers.
"This order more evenly
distributes the rate impacts among other customers. It also
provides a relief valve ensuring that no ratepayers bill
will be impacted more than 12 percent based on the ESP order,
as well as providing AEP Ohio financial stability," PUCO
chairman Todd Snitchler said in a statement.
Ormet has not officially
responded to PUCOs ruling yet, Tanchuk said. "The ruling
is complex so we are still evaluating the impact," he said,
declining to comment further.