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. Thats (pretty much) the only thing thats been discussed," the Big Rivers spokesman said. "That looks like the direction they want to go. I havent 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 isnt viable under the existing power contract and todays 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 years 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 didnt respond to requests for comment.
Century president and chief executive officer Michael Bless told AMM in August that it is the companys intention to continue operating the facility through August 2013, adding that it would consider purchasing power off the grid from multiple carriers if it couldnt 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 utilitys spokesman said.
"Once they leave, wed be losing revenues. We may have to idle one of our plants. ... Were still trying to figure everything out," he said.
"Theoretically, if they go to the market theyll 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 dont want their competitors or employees to know theyre looking at a new location. But most everyone thats 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.