Kentucky PSC approves open-market power for Century Aluminum - Beckley, Bluefield & Lewisburg News, Weather, Sports

Kentucky PSC approves open-market power for Century Aluminum

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The Kentucky Public Service Commission approved agreements Aug. 14 to allow the Century Aluminum of Kentucky smelter in Hawesville to purchase electricity on the open market from Kenergy Corp.

The PSC called the agreement a "delicate balance" in a news release, saying it will keep the Hawesville smelter viable and will not put extra costs on the remaining Big Rivers Electric Corp. customers.

The Hawesville plant has nearly 700 employees, and Century has said that purchasing power on the open market is necessary to keep the plant operational.

The company closed its Ravenswood smelter in 2009, leaving 650 people without jobs. It engaged in a lengthy rate case hearing last year with the Public Service Commission of West Virginia, but did not act on the order the PSC issued. To read our previous coverage of the rate hearing and decision, click here and here.

Under the agreement in Kentucky, Kenergy will continue to be the retail power service provider for the Hawesville smelter. Big Rivers will purchase power on the open market on behalf of Century and transmit the power to Kenergy for delivery to the smelter in Hawesville.

The Aug. 14 decision from the Kentucky PSC is separate from a rate request filed by Big Rivers to adjust rates in compensation for lost revenue that will be felt when the company no longer sells power to the Hawesville smelter.

Big Rivers also supplies power to a Century smelter in Sebree, Ky. That power agreement is scheduled to be terminated in January. Big Rivers has filed a second rate case in anticipation of even more lost revenue.

Century indicated during its most recent quarterly earnings call that it will seek a similar open-market power supply arrangement for the Sebree smelter. Click here to read our most recent coverage of Century Aluminum.

Open market power was an option briefly discussed during the West Virginia rate hearing, but never entertained as a viable option.