CHICAGO Century Aluminum Co. and Rio Tinto Alcan are in discussions with Big Rivers Electric Corp. about the aluminum producers smelters in Kentucky potentially tapping the open market for power, a spokesman for the utility said.
The move comes after a bill backed by Monterey, Calif.-based Century seeking to legislate the issue effectively died when the Kentucky legislature ended its session on March 26 without voting on the matter.
"Since the session ended, we have resumed talks with Century and Rio Tinto Alcan to work towards an equitable solution to allow them to access market power," the spokesman for Henderson, Ky.-based Big Rivers said in a March 29 e-mail to AMM. "Actually, the smelter legislation stalled progress on negotiations."
Big Rivers has always been open to negotiations but "cant provide corporate entitlements at the expense of our other customers," the spokesman said. But the utility does care about the smelters existence, he said.
"Thats why we are willing to allow them to access the open market as long as they pay for any incremental costs associated with their decision to do so," the Big Rivers spokesman added.
Neither Century, which operates a smelter in Hawesville, Ky., nor Montreal-based Rio Tinto Alcan, which operates a smelter in Sebree, Ky., responded to requests for comment.
Century had been pushing for legislation that would allow its Hawesville smelter to access power on the open market. Company president and chief executive officer Michael Bless said during the companys last earnings call that the smelter "is not viable" without a better power deal from Big Rivers (amm.com, Feb. 22).
Similar bills on the issue were introduced in both the Kentucky House and Senate. The bill in the House made it out of committee but was never taken up for a vote by the wider House, while legislation in the Senate remained stuck in committee. Both bills effectively fizzled when Kentucky lawmakers wrapped up their legislation session for 2013 on Tuesday, a source familiar with the matter said.
Still, the source cautioned AMM that while "bills die, issues dont." The smelter issue could still be taken up by Kentucky lawmakers if Kentuckys governor were to call a special session and bring lawmakers back to Frankfort, the states capital, for more legislative work, the source said. "So it depends on what your definition of dead is," he quipped.
But both the source and the Big Rivers spokesman questioned the likelihood of such an outcome. "I dont anticipate a special session to be called by the governor considering he stated that this is a private business negotiation, not a legislative matter," the Big Rivers spokesman said.
Gov. Steve Beshears office was unable to comment by press time, a spokeswoman said.
Century gave Big Rivers a 12-month power termination notice for its smelter in Hawesville in August (amm.com, Aug. 20), while Rio Tinto Alcan gave its 12 months notice Jan. 31 (amm.com, Feb. 4). The two smelters together account for about 70 percent of Big Rivers power (amm.com, Feb. 4).