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Century said likely to buy power from grid

Keywords: Tags  Century Aluminum, Big Rivers Electric, Hawesville smelter, aluminum, smelter, London Metal Exchange, LME, grid Suzy Waite


NEW YORK — Century Aluminum Co. is now primarily considering purchasing power off the grid, or spot market, for its Hawesville, Ky., smelter, as opposed to re-signing a multiyear contract with Big Rivers Electric Corp., a spokesman for the utility told AMM Monday.

"Century is looking to go to the market. That’s (pretty much) the only thing that’s been discussed," the Big Rivers spokesman said. "That looks like the direction they want to go. I haven’t heard a word of a (new) contract (with us)."

Century gave 12 months’ notice in August that it would terminate its power contract with Big Rivers, saying that the 250,000-tonne-per-year smelter isn’t viable under the existing power contract and today’s aluminum prices ( amm.com, Aug. 20).

Three-month aluminum closed the official session on the London Metal Exchange at $1,949 per tonne Monday, down 17 percent from this year’s high of $2,348 per tonne in late February.

Big Rivers and Century have met several times over the past seven weeks, but have failed to come to an agreement, he said.

A Century spokeswoman didn’t respond to requests for comment.

Century president and chief executive officer Michael Bless told AMM in August that it is the company’s intention to continue operating the facility through August 2013, adding that it would consider purchasing power off the grid from multiple carriers if it couldn’t reach a new power deal with Big Rivers.

If Century does decide to purchase power on the spot market, it has big implications for Big Rivers, the utility’s spokesman said.

"Once they leave, we’d be losing revenues. We may have to idle one of our plants. ... We’re still trying to figure everything out," he said.

"Theoretically, if they go to the market they’ll purchase power from elsewhere. However, due to transmission/voltage issues they may technically use our electricity while purchasing elsewhere," the spokesman said, adding that Big Rivers is pursuing other customers, or loads, in anticipation that Century does take its business elsewhere.

"Arrangements have to be made by August," he said, adding that it is targeting big companies requiring a lot of power.

"You never know the companies. They come to you with a project name. They don’t want their competitors or employees to know they’re looking at a new location. But most everyone that’s come to us is talking huge loads. And if you do your math, only a select few (industries) use big loads."

This includes aluminum, steel, bio diesel, or ethanol industries, among others, he said.


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