SPOKANE, Wash. — Northwest labor organizations have launched an effort to make electricity-gobbling aluminum smelters energy self-sufficient within five years.
The United Steelworkers of America, which represents most of the hourly workers at Northwest aluminum smelters, made the proposal in a letter to the Bonneville Power Administration last week.
If adopted, the measures would bring about voluntary reductions in energy use, “save jobs, protect the environment and ratepayers, and improve the long-term social and environmental health of the Pacific Northwest,” labor officials said.
A key to the plan is to make smelters – users of vast amounts of federally produced electricity – completely energy self-sufficient by 2006.
“This is what we felt ... was the approach BPA ought to take to try to balance all the interests,” David Foster, director of the Steelworkers’ District 11, said Tuesday from his Minneapolis office. “It’s a historic step on the labor movement’s part ... to advocate setting up a system in which the aluminum industry is no longer dependent on federal power in the Northwest.”
The labor alliance proposes a two-tiered rate structure that would sell BPA customers about 75 percent of the power allocated for the 2001-2006 period at $23.50 per megawatt hour, with additional power requirements selling at a higher rate.
The plan would encourage conservation and provide rate caps to protect low-income
the alliance said.
It calls for development of new sources of energy generation, with an emphasis on renewable resources, such as wind power.
Scott Lamb, a spokesman for Kaiser Aluminum Corp., said the idea “sounds nice in theory,” but is difficult in practice.
“It’s a concept that sounds good, and we’ve been looking at various options that might help us bring generating capacity to bear,” Lamb said. “The problem is, if you are talking about non-hydro resources in the Northwest ... you would end up with a plant that would be generating electricity that is still prohibitively expensive for the manufacture of aluminum.”
BPA spokesman Ed Mosey said the labor coalition’s proposal echoes the agency’s call for the aluminum industry to plow profits it made from recent resales of federal power into new generation and to “remove itself from federal power sales in five years.”
But the proposed tiered rate plans doesn’t sit well with other users of federal hydropower, such as public utility districts and electrical cooperatives, he said.
“If the aluminum industry and its workers would get together with other customers and convince them a two-tier rate structure is going to be an advantage to them, that would be great,” Mosey said. “But the other customers are dead-set against it. To their view, it shifts costs onto them and away from the aluminum industry.”
The Washington State Labor Council and the Oregon AFL-CIO have signed on to the effort to wean smelters off the region’s hydropower system and save aluminum industry jobs.
A recent report by the state Office of Financial Management included a worst-case scenario that shows rising energy prices leading to the loss of half of the aluminum industry jobs in Washington.
The BPA estimates that its power rate for aluminum smelters, now about $22 per megawatt hour, will jump to $41 per megawatt hour for the next two years. Aluminum company officials say no smelter in the region will make a profit once power rates top $35 per megawatt hour.
Contracts that take effect Oct. 1 obligate BPA to deliver about 11,000 megawatts, but the agency has only enough generating capacity for about 8,000 megawatts, meaning it has to buy the remainder on the expensive spot market.
At full capacity, the region’s aluminum smelters use about 3,000 megawatts of power annually. The BPA has committed to selling only 1,500 megawatts to aluminum plants in the next five years.
Foster said the labor plan would reduce aluminum industry consumption by about 400 megawatts.
On the Net:
Bonneville Power Administration: http://www.bpa.gov
Office of Financial Management: http://www.ofm.wa.gov