CHICAGO Ormet Corp. has been given permission to defer payment of its August and September electricity bills to utility American Electric Power Co. Inc. (AEP).
The bankrupt Hannibal, Ohio-based aluminum producer may push back a $5-million payment for its August bill and as much as $5.5 million for its September bill, the Public Utilities Commission of Ohio (PUCO) said in an order dated Aug. 21, overruling arguments by AEP that Ormet should pay its electric bills as they come due.
Ormet, which was sold in June to Smelter Acquisition LLC, a subsidiary of Wayzata, Minn.-based Wayzata Investment Partners LLC (amm.com, June 4), had said that late payments were necessary for it to continue operating as it seeks to emerge from bankruptcy.
The Ohio regulatory commission said it made the decision "to mitigate Ormets immediate cashflow problem" and to enable the company to continue operations.
Ormet filed for bankruptcy protection in February, citing high power and legacy costs (amm.com, Feb. 26). It has since been at loggerheads with AEP over the terms of its power agreement with the utility.
The aluminum producer has warned that it could be forced to liquidate unless a new power deal is reached and has issued a Worker Adjustment and Retraining Notification Act (WARN) notice to more than 900 employees at its 271,000-tonne-per-year smelter in Hannibal (amm.com, Aug. 13).
A PUCO hearing on the power dispute is scheduled for Aug. 27 (amm.com, Aug. 19). Ormet has already reduced operations to two of six potlines after failing to receive immediate approval from PUCO for lower power rates.