American Electric Power Co. Inc. (AEP) must keep power flowing
to Ormet Corp.s operations in Hannibal, Ohio, for the
duration of the aluminum producers bankruptcy
proceedings, Ohio officials have ruled.
Ohio-based utility must continue to provide electricity service
to Ormet, which is based in Hannibal, "to protect the public
from potential environmental harm" that might result from a
disconnection, the Public Utilities Commission of Ohio (PUCO)
said in an order dated Oct. 30.
"We will abide by the
commissions order and are working with Ormet on a weekly
prepayment plan that will apply going forward through the
pendency of the bankruptcy proceeding," an AEP spokeswoman said
via e-mail Oct. 31.
AEP had threatened to
disconnect power at Ormets idled Hannibal smelter on Nov.
1 after the company failed to pay a bill due Oct. 23. The
utility also said the commission lacked the authority to change
its power agreement with Ormet (
amm.com, Oct. 25).
Ormet argued that a
power cut would jeopardize preparations for the sale of its
assets in Hannibal and the operations of Hannibal Real Estate
Inc., a third-party oil and gas drilling services provider that
employs more than 200 people and gets its power through
In addition, a U.S.
Environmental Protection Agency-mandated clean-up project would
be endangered if power were cut, putting the public at risk and
potentially seeing Ormet liable for non-compliance with an EPA
order, the company said. A sewage treatment plant operated by
Ormet also needs electricity, and wastewater not treated by the
plant could pose additional risk to the public and expose the
company to further liabilities, it said.
The commission on Oct.
30 said it found Ormets request to be "reasonable" and
also ordered that AEP bill the company at a rate based on its
current reduced electricity usage rather than a higher rate
used when the Hannibal smelter was operating.
Ormet filed for
Chapter 11 bankruptcy protection in February (
amm.com, Feb. 26).
A proposed sale of the
company fell apart after Ormet failed to win approval from PUCO
for a lower fixed power rate or to gain permission to break its
agreement with AEP (
amm.com, Oct. 4).
Ormet is now seeking
court approval to sell its Burnside, La., alumina refinery to
Almatis Inc. for $35.3 million. The deal doesnt include
the idled Hannibal smelter (
amm.com, Oct. 28).