NEW YORK Ormet Corp.
could see annual electricity costs at its Hannibal, Ohio,
smelter increase by more than $20 million if proposed power
rate hikes by AEP Ohio, a division of American Electric Power
Co. Inc., are implemented, Ormet said Tuesday.
"The current issue is that
AEPs electricity rates have increased so much that Ormet
needs additional assistance to keep employment levels up,"
Ormet chief executive officer Mike Tanchuk said in a statement.
"We have been working very hard with AEP and the state of Ohio
over the past several months to formulate a solution to the
rising electricity prices, but unfortunately could not come to
an agreement for any of the alternatives developed."
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 put
forth a schedule for AEP to transition to a competitive market
where 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 load, followed by a second energy auction for up to 60
percent of this load on June 1, 2014, and a third auction for
100 percent by Jan. 1, 2015.
Ormet began the curtailment
process for a second potline at the six potline,
270,000-tonne-per-year smelter last week, and anticipates the
potline will be completely shut down by Aug. 31 (
amm.com, Aug. 27).