Smelter Owner Agrees to Stay Offline

PORTLAND-Goldendale Northwest Aluminum is the latest smelter operator to agree to an extended closure as part of an effort to increase power reserves and stave off power problems throughout the Northwest. Alcoa, Columbia Falls and Longview Aluminum also have agreed to remain shut down.

The Shuttered smelters mean more power reserves for the federally operated Bonneville Power Administration, supplier of nearly half the power consumed in the Northwest and supplier to most of the aluminum companies. The BPA is trying to stave off energy shortages and exponential rate increases expected later this year.

Under the pacts, BPA will pay the smelter operators $20 per megawatt hour for their power, some of which will be used to provide full wages and benefits sufficient to cover employees who would have worked had the smelters not shut down. The BPA also will support development of a wind energy project by an affiliate of Golden Northwest.

“This agreement helps balance supply and demand during the ongoing West Coast energy crisis. It allows BPA to avoid purchasing expensive power and will reduce what otherwise could have been a very large rate increase in October,” said Steve Wright, acting administrator of BPA. “It will also help the region avoid power shortages next winter.”

Meanwhile, efforts to settle claims from the California power crisis began Monday. Western states accuse power-generating companies of overcharging to the tune of $15 billion during the past 12 months. California says it should receive $9 billion in refunds. Other Western states say they are owed around $6 billion.

Specifically, the states allege the power producers took advantage of the power shortage by unfairly driving up prices to 10 times what they were in 1999. In the past year, rates often topped $300 per megawatt-hour. The power companies argue that the charges were justified.