NEW YORK Noranda Aluminum Holding Corp.s New Madrid, Mo., smelter could see a change in its base power rate next year.
The Missouri Public Service Commission (MoPSC) last week approved an overall rate design proposed by Ameren Missouri, the states largest electric utility, which requested a 14.6-percent base rate increase that would impact all customers.
"We have been diligently working through the rate-setting process over the power contract at New Madrid," Noranda president and chief executive officer Layle "Kip" Smith said during a call following the release of the companys quarterly earnings results Wednesday. "We are supportive of the rate design."
However, he noted that Noranda wont know the full impact to the company until later this year, when the MoPSC rules on the total revenue requirement. "We expect a ruling on the issue in December," Smith said.
In September 2010, Ameren had filed a new rate case with the MoPSC seeking an 11-percent increase, which the agency approved in July 2011. This allowed Ameren to raise its base rates, and increased Norandas base rate by 5.2 percent effective July 31, 2011, according to the companys 2011 10-K filing.
That power contract with runs through May 2020.
Also, Noranda last month renewed a five-year labor deal at New Madrid (amm.com, Sept. 10). It covers about 780 United Steelworkers union workers and includes employee wage hikes and retirement benefits, Smith said.
The health-care aspect of the deal will also be beneficial in the long term for the Franklin, Tenn.-based producer, he added.
"We do expect the health plan changes will provide us with greater control over the impact of future health-care cost increases," Smith said.
The new health-care plan is focused on "design and employee participation," a company spokesman told AMM, declining to offer additional detail.