Keep Rates Reasonable for CFACby Editors
The Daily Interlake, December 7, 2005
It's now or never for the Columbia Falls aluminum plant.
The future of the venerable aluminum plant is in question, and so is the future of the entire aluminum refining industry in the United States.
Due to a woeful lack of foresight, the industry actually helped put itself in this situation by pressing for deregulation of the energy market some years ago. The thought then was that deregulation would bring lower electricity rates that would make the industry more profitable.
The reality, of course, has been a steady increase in prices, which have crippled the megawatt-devouring aluminum industry in the Northwest and elsewhere. Production at aluminum smelting plants in the United States is down 31 percent since 2000.
One of the last survivors in the Northwest has been the Columbia Falls Aluminum Co., which dates back to 1955 and was long the biggest employer in Flathead County. Even today, with diminished capacity and only about 150 employees, the aluminum plant is one of the best-paying employers in the county.
But all that is very likely going to be lost if the Bonneville Power Administration continues its recent policy of looking only at power costs and not at power benefits. The BPA system of dams and hydroelectric power transmission, after all, was built at public expense and it should benefit the public in tangible ways. The high-paying aluminum jobs in Columbia Falls are just such a benefit.
It would be nice if the country could somehow make policy that would benefit wage-earners, businesses, and our economy as a whole instead of thinking only about market-based equations. Market-based thinking has sent most of our manufacturing jobs to China, Japan and the Third World.
The same thing is happening now to aluminum. In the 10-year period from 1992 to 2002, aluminum production in North America declined from 31 percent of the world share to just 21 percent, while Asia's production increased from 15 percent to 26 percent.
Rather than just wave good-bye as aluminum production capacity shifts to China, we ought to start asking ourselves why China wants those jobs and why we don't. We need to think about what strengths we have as a nation and figure out how to use them not just for a quick buck but for a long-term strategy. Aluminum is absolutely essential in the production of many modern necessities, including airplanes and automobiles. At some point, when all the aluminum production is overseas and our aluminum plants are dismantled, we may wake up and realize we have made a terrible mistake.
Sound familiar? Just think of what you were told about utility deregulation before it happened, and how miserable you have been since.
There is time to save Columbia Falls Aluminum. The worldwide market for aluminum is strong; the plant owners are eager to expand capacity. The only thing missing is a source of cheap energy. BPA -- with the help of the federal government if necessary -- should step in and offer power to CFAC at the same $30-per-megawatt-hour rate that it is giving to public utility customers.
After all, before deregulation, the aluminum smelters of the Northwest were a godsend to BPA. As a reliable and substantial market for power, the aluminum industry helped carry Bonneville Power through many a lean year. Now it's Bonneville's chance to return the favor.
It's only right.
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