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Bills to keep aluminum smelters in Ky. draw flak

Keywords: Tags  Kenergy, Big Rivers Electric, Century Aluminum, Rio Tinto Alcan, Joe Bowen, Tommy Thompson, Kentucky, smelting electricity

CHICAGO — Separate bills aimed at keeping smelters owned by Century Aluminum Co. and Rio Tinto Alcan operating in Kentucky are drawing opposition from power suppliers.

Power suppliers argue that the proposed bills, introduced Feb. 5 by state Sen. Joe Bowen (R., District 8) and Rep. Tommy Thompson (D., District 14), appear to have been crafted by the aluminum industry without outside input and look set to be rammed through the legislative process.

Monterey, Calif.-based Century and Montreal-based Rio Tinto Alcan didn’t respond to requests for comment.

Century’s plant in Hawesville, Ky., employs about 750 people, and Rio Tinto’s smelter in Sebree, Ky., employs roughly 550, Bowen told AMM in a telephone interview Feb. 11. Hundreds more jobs are at stake when related jobs at suppliers and service providers are factored into the equation, he said.

"And it’s not just about salvaging those jobs, but salvaging that industry (aluminum smelting). If we lose that industry, the state of Kentucky is not going to lose it to (another state) but to a country offshore," Bowen said. "If that happens, it’s never coming back and we’ll have to import that product back in."

This would impact on a host of domestic industries, including the automotive, aviation and the defense sectors, he said, noting that the bills are intended to allow Century and Rio Tinto to buy electricity on the open market, which could help them save money.

Bowen said he hopes the bills, if signed into law, will "lasso back in" Century and Rio Tinto while being as fair as possible to other power customers in the region.

The legislation was introduced after Rio Tinto gave 12 months’ notice Jan. 31 to power provider Big Rivers Electric Corp., Henderson, Ky., that it would terminate its power contract for the smelter and perhaps shut the facility (, Feb. 4). The notice came six months after Century gave Big Rivers Electric a 12-month power termination notice for its smelter in Hawesville (, Aug. 20).

Henderson-based Kenergy Corp., which distributes power generated by Big Rivers, said Feb. 8 that it hadn’t been consulted on the text of the bills before they were introduced and wanted more input, especially given the increased expense other customers would face if the bill were to become law. Citing a third-party study, Kenergy said the aluminum smelting industry in the United States "was dying" and that the proposed legislation was in effect asking other customers to "subsidize the smelters."

Kenergy has since hardened its stance and now flatly opposes the bills, a source familiar with the matter said Feb. 11. That is in part because the company thinks that the bill, which it believes was crafted by the aluminum industry, is being "fast-tracked" through the legislative process, potentially not leaving time for consultation or amendment.

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