CHICAGO Ormet Corp.s future wasnt immediately clear after the Public Utilities Commission of Ohio (PUCO) granted the bankrupt aluminum producer a fixed rate for power but denied its request to buy electricity on the open market.
PUCO approved a monthly power rate not to exceed $50 per megawatt hour (MWh) beginning with the Hannibal, Ohio-based companys October 2013 bill and continuing through December 2014, according to an order dated Oct. 2.
"This rate keeps Ormets pricing in line with the other larger industrial customers and strikes the right balance of support and maintaining jobs without unduly burdening other ratepayers," PUCO chairman Todd A. Snitchler said in a statement Oct. 2.
Ormet didnt respond to requests for comment.
Ormet had requested an average fixed rate of $45.89 per MWh for 2013 and permission to break its current contract with Columbus, Ohio-based utility American Electric Power Co. (AEP) effective Jan. 1, 2014, so that it could shop for power on the retail market, PUCO said.
PUCO denied that request and ordered Ormet to honor its amended agreement with AEP through Dec. 31, 2018. In addition, PUCO ordered Ormet to maintain 650 full-time employees at Hannibal throughout that period.
Ormet has said it needs a competitive electricity rate not only to survive but also to give the company time to build its own natural-gas-fired power plant, which it hopes to have operating by 2015 (amm.com, July 16). PUCO said Ormet could revisit its arrangement with AEP if the plant is built, but cast doubt about the project.
"The project is already at risk and behind schedule, and ... many of the details, such as the permitting and financing for the project, remain to be decided," PUCO said in the order.
Even the relief granted to Ormet appeared to be done so only grudgingly by some commission officials. "I sign todays order not because of any confidence in Ormets management, but because of the potential devastating impact of the regions largest employer closing," PUCO commissioner Steven Lesser said in the statement. "I hope this order provides an opportunity for the company to move out of bankruptcy and find a viable business model that retains high levels of employment not dependent on subsidized rates."