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Wal-Mart backs Noranda’s power rate

Keywords: Tags  aluminum, Noranda Aluminum Holding Corp., Wal-Mart Stores Inc., electricity, power rate cut, smelter, New Madrid, Mo. Steven W. Chriss


NEW YORK — Wal-Mart Stores Inc. is in favor of Noranda Aluminum Holding Corp.’s push for a lower electricity rate in Missouri, citing the severe economic impact on the region should the company’s New Madrid, Mo., smelter close.

"Noranda’s departure from the system could have an even greater impact to the remaining customers than the $47.7 million revenue shortfall estimated in this docket," Steve W. Chriss, a senior manager at Bentonville, Ark.-based Wal-Mart, said in testimony filed with the Missouri Public Service Commission (PSC) May 9, adding that the company has around 48 stores and a distribution center serviced by St. Louis-based utility Ameren Corp., primarily on the large general service and small primary rate schedules.

The Franklin, Tenn.-based aluminum producer had asked the PSC to approve a new rate of $30 per megawatt hour (MWh) for its New Madrid smelter, about 27.7 percent less than the $41 to $42 per MWh the company now pays Ameren. Without the decrease, the company said, it would need to cut 150 to 200 jobs or ultimately close the 260,000-tonne-per-year smelter (amm.com, Feb. 13).

Noranda’s requested rate relief would be out of the ordinary and inappropriate "under normal circumstances," Chriss said. "However, the specific and extraordinary circumstances of this docket warrant the commission’s consideration of whether movement away from cost-based rates for Noranda is in the public interest," he said.

While it is not possible to estimate the specific economic impact to Wal-Mart stores in the region, "the potential loss of $95 million of annual payroll from the local economy due to the shutdown of the smelter is a significant general concern," Chriss said.


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