Electricity-rate reductions sought by Ormet Corp. are drawing
opposition from Industrial Energy Users-Ohio (IEU-Ohio), whose
members include several big metals and manufacturing
IEU-Ohio contends that
if the bankrupt Hannibal, Ohio-based aluminum producer is
granted measures it seeks to cut its electricity costs, the
move would push the burden of those costs to customers served
by Columbus, Ohio-based utility American Electric Power Co.
(AEP), according to documents filed July 16 with the Public
Utilities Commission of Ohio (Puco).
The relief that Ormet
seeks would see AEP customers in Ohio hit with "the rate
increase burden that Ormet seeks, right or wrong, to avoid,"
the group said. "In this context, IEU-Ohio is compelled to
Ormet is seeking a
fixed price for electricity for 2013 and permission to buy
power on the open market beginning with the January 2014
billing cycle. But AEP argues that such changes would violate a
supply contract it contends it has with Ormet through 2018, as
well as bankruptcy law (
amm.com, July 12).
A Puco hearing over
the power issue is scheduled for Aug. 27, although Ormet is
appealing to move the hearing date up to the week of July 22
amm.com, July 15). IEU-Ohio also objects to
pushing forward the date of the hearing, according to the
memorandum to Puco.
aluminum prices, cheaper electricity is an urgent issue for the
companys survival, Ormet said in separate bankruptcy
court filings in Delaware. Without affordable electricity,
Ormet is "unable to operate the company as a going concern"
because Wayzata Investment Partners LLC and its entities have
advised Ormet that they are "unwilling to move forward with the
sale" without a better power deal. Wayzata, Minn.-based Wayzata
Investment Partners is the parent company of Smelter
Acquisition LLC, which last month was approved as Ormets
stalking horse bidder (
amm.com, June 4).
that assertion. "No prudent successor to Ormets
operations would close an asset purchase deal contingent on
permanent modifications to Ormets unique arrangement"
with AEP and Puco, the group said.
include Columbus Castings, Columbus, Ohio; Globe Metallurgical
Inc., a subsidiary of New York-based silicon producer Globe
Specialty Metals Inc.; welding and cutting company Lincoln
Electric Co., Cleveland; Plymouth, Mich.-based automotive parts
manufacturer Metaldyne LLC; Ohio Star Forge Co., Warren, Ohio;
Welded Tubes Inc., Orwell, Ohio; and Vallourec Star LP, a
subsidiary of Boulogne-Billancourt, France-based Vallourec