Chelan PUD Board Approves Alcoa Contract Change To Spur Smelter Restart

May 1, 2017
Originally published on May 2, 2017 11:44 am

The Chelan County Public Utility District Board of Commissioners is playing ball with Alcoa Corporation in hopes of bringing back hundreds of well-paid manufacturing jobs. Commissioners voted 4-0 to postpone a big charge the aluminum maker faced for idling its smelter near Wenatchee at the beginning of last year.

Alcoa has many years left on a long-term contract to buy electricity from the Chelan County utility. The power contract contains carrots and sticks for Alcoa to keep its energy-intensive aluminum smelter running and the jobs that go with that. 


PUD Board President Randy Smith said the utility board agreed to defer almost all of a $67 million charge Alcoa faced next month for not operating for the past year and a half.

"My desire is not to put any impediments in the way of a potential reopening for Alcoa,” he said.

Alcoa management said aluminum markets are improving, but not yet to the point where it will commit to reopening the smelter in Wenatchee. A company vice president, Michael Padgett, did say that forcing Alcoa to pay up now would remove the possibility of restart.

Alcoa did not get an entirely free pass from the PUD board. The board accepted a staff recommendation to charge Alcoa $7.3 million now to ensure the deferral has a neutral effect on the rest of the district's ratepayers for the next year. If the Alcoa smelter in Wenatchee remains shut down in June 2018, then the company would owe $62 million. 


At a community meeting last week, some former Alcoa workers and spouses asked the public utility and their union to seek a stronger demonstration of "good faith" from Alcoa regarding its intentions for the idled local smelter. Nothing concrete emerged in the interim. 


"I made a comment to the Alcoa vice president as he was leaving the room today," Smith related Monday. "I said, 'I really hope six months from now that plant is open and making aluminum.'" 


More than 400 union workers lost their jobs around the beginning of last year when the global aluminum maker indefinitely "curtailed" the Wenatchee Works amid swooning prices for raw aluminum. The spot price for the metal has rallied significantly this winter and spring.


Aluminum smelting used to be a pillar of the Pacific Northwest's industrial economy, but today there is only one smelter left in operation in the region -- Alcoa's Intalco Works in Ferndale, Washington.

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