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Ohio officials back Warren’s power rate request

Keywords: Tags  Warren Steel Holdings, Public Utilities Commission of Ohio, PUCO, rate case, Ohio Edison, U.S. Steel, Sen. Sherrod Brown, Rep. Tim Ryan Sen. Capri S. Cafaro


CHICAGO — Ohio politicians have thrown their weight behind Warren Steel Holdings LLC’s bid for a lower power rate, arguing that cheaper electricity is necessary if the plant is to avoid shutting down.

The Warren, Ohio-based electric-arc furnace steelmaker needs a power rate that will "level the playing field" with other producers, Sen. Sherrod Brown (D., Ohio) and Rep. Tim Ryan (D., Ohio) said in a June 20 letter to the Public Utilities Commission of Ohio (PUCO).

"Without a competitive power rate, the company has no plans to restart operations. A plant closure would be devastating to the local economy," they said in the letter.

Also supporting the move are state Sen. Capri S. Cafaro and state Rep. Sean J. O’Brien.

"To ensure this important business can continue to stay in the area, it is important that they have a fair and competitive electric power rate," Cafaro said in a June 18 letter to PUCO. "At a rate much higher than their competitors and the industry average, they are fighting an uphill battle. They have found that they can’t overcome this disadvantage."

Warren Steel pays higher rates than in-state and out-of-state competitors, O’Brien said in a June 13 letter to PUCO. "This disparity in electrical costs has placed jobs at risk and unfairly disadvantages (Warren Steel)," he said.

Warren Steel, owned by Miami-based Optima Acquisitions LLC, has asked PUCO for a lower rate as it mulls restarting and ramping up production to 1 million tons per year, a move that could create scores of jobs and see tens of millions of dollars invested in the facility (amm.com, June 10).

The steelmaker, which ceased operations in March (amm.com, March 25), is seeking an initial rate of $50 per megawatt hour (MWh).

A customer of Ohio Edison, Warren Steel consumes more than 700,000 kilowatt hours of electricity annually, the company said in a June 25 filing with PUCO, reiterating the necessity of a lower rate to "compete with out-of-state competitors, forge strategic partnerships with other Ohio steel companies and reopen its steel manufacturing operation."

Warren Steel has said it might resume steel melting after its executive team reportedly worked out a supply deal with Pittsburgh-based U.S. Steel Corp., which was said to be interested in purchasing billets from Warren Steel (amm.com, March 28).

The company said it employs 180 hourly and salaried workers and 66 full-time contractors, a number that could jump to 325 people if it restarts steelmaking and invests enough—$10 million in the first year of operations and $33 million in the next three to four years—to boost annual production to 1 million tons from 240,000 tons.

U.S. Steel declined to comment June 25.


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