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Power Contract Gives Lifeline To Big Smelter by Tom Banse KUOW, December 22, 2009

Alcoa and the Bonneville Power Administration have agreed to a power sales contract to keep a big aluminum smelter running near Bellingham. Alcoa says deal keeps the plant operational at two thirds capacity and preserves more than 500 family-wage jobs.

Abundant and dirt cheap hydropower attracted the aluminum industry to the Northwest decades ago. Today, surplus hydropower no longer goes begging for takers. The aluminum smelters are actually the ones pleading now. In Ferndale, in northwest Washington, Alcoa plant manager Mike Rousseau says his smelter's survival depends on getting low-cost federal hydropower.

Rousseau: "Bonneville is the largest energy supplier in the Northwest and they set their rates at cost. That's the way it was built when those dams were built. The market at times goes much higher and it becomes very difficult to operate a facility."

Smelter workers can now breathe easy for 17 months. Rousseau is optimistic about getting a five-year contract extension after that. But the region's public utilities have previously sued BPA over such direct power sales and remain dubious. They claim the electricity needs of their customers take precedence over the energy-gobbling smelters. I'm Tom Banse in Olympia.