Ormet, AEP-Ohio’s New Electric Arrangement Approved to 2018

The Public Utilities Com-mission of Ohio last week approved an arrangement between Ormet Primary Alu-minum and American Electric Power-Ohio for electric service to Ormet’s aluminum producing facility in Hannibal. The arrangement will be in effect through 2018.

Ormet’s electrical rates will be based on the price of aluminum, with other AEP power customers making up the difference for any discounts.

“This arrangement will ensure that jobs are retained in Ohio and that the region continues to receive economic benefits from Ormet’s operation,” said PUCO chairman Alan R. Schriber. “By approving this arrangement, we are fulfilling the economic development policies in Senate Bill 221 through job retention, as Ormet is a key employer in the Hannibal region.”

The PUCO set limits on how much of a discount the Ormet can receive and how much money AEP can recover in a year.

As modified by the PUCO, rates billed to Ormet by AEP for the balance of 2009 will reflect an annual average rate of $38 per megawatt hour (MWh) for the periods Ormet was in full production, $35 per MWh when Ormet curtailed production to 4.6 potlines and $34 per MWh when the plant curtailed production to four potlines. These rates are contingent upon Ormet maintaining its employment levels at 900 employees for calendar year 2009.

For calendar years 2010 through 2018, the commission approved the link of Ormet’s rate to the price of aluminum as reported on the London Metal Exchange, but modified the agreement to include a maximum electric rate discount for Ormet and a maximum amount of delta revenue (or the difference between AEP’s tariff rate and the rate paid by Ormet) that AEP ratepayers will be expected to pay. The PUCO commission also reduced the impact of the arrangement on customers’ bills by including a credit of the provider of last resort (POLR) charges paid by Ormet to AEP.

During calendar years 2010 and 2011, the maximum electric rate discount Ormet will receive is $60 million. This discount will be subject to adjustment based upon employment levels at the facility. The maximum amount of delta revenue that ratepayers will be expected to pay during 2010 and 2011 will be between $45.4 million and $54 million, depending on the credit of POLR charges, resulting in a charge to customers’ bills of less that $2 per month. AEP will defer the difference between the rate paid by Ormet and the delta revenue collected from ratepayers and will recover the difference at the end of the arrangement.

The commission also phased down the discount Ormet received throughout the length of the arrangement. As a result, Ormet’s maximum discount will be reduced to $54 million in 2012. For calendar years 2013 thru 2018, the maximum discount will be reduced each year by $10 million.

PUCO directed that any rate discounts provided to Ormet must be directly related to employment levels. Under the arrangement, Ormet will be required to maintain an employment level of 650 full-time employees. Ormet’s discount will be reduced by an additional $10 million each month for every 50 workers below 650 full-time workers employed by Ormet for the previous month. Ormet will be required to provide a monthly report to PUCO staff and AEP detailing its employment levels.

Ormet and AEP must file an executed power agreement that reflects the modifications ordered by the PUCO commission. Once the agreement is filed, the arrangement will be effective.

A copy of the commission opinion and order is available at www.PUCO.ohio.gov. Click on the link to the Docketing Information System (DIS) and enter the case number 09-119-EL-AEC.

Ormet filed a request for the special arrangement in February, describing the deal as “essentially an on-or-off switch” for the Hannibal plant.

“It was a huge step in securing Ormet’s future and that of its employees,” said Ormet spokeswoman Linda King.

According to officials at both companies, Ormet and AEP-Ohio must evaluate the arrangement ordered by the PUCO before putting it into a binding contract.

AEP spokesman Jeff Rennie said his company must apply to the PUCO before it can start to collect the revenues forgone in the new Ormet deal, as well as a temporary one already in place.

The Ohio Consumers’ Counsel had advocated an even lower limit on Ormet’s discount, about $32 million. However, counsel spokesman Ryan Lippe said the office was pleased with some of the provisions the PUCO added.

Beallsville Calls for Clean Up

Issues with property and pets were addressed at the July 6 meeting of Beallsville Village Council, which also took action to close Washing-ton St. during Heritage Days.

Council discussed unkempt properties and noted that non-compliance with the village ordinance will result in the village cleaning the property and the charges being placed on the owner’s tax bill. They said that keeping property cleaned up means to keep it free of trash and keeping the lawn moved

Officials also remind residents that all dogs within the village limits are to be confined to the owner’s property.

Concerning safety issues, Ted Billiter, reported that new fire extinguishers have been installed and are up to code. The extinguishers were purchased from Dynamic Safety Resources, Woodsfield.

Billiter also told council that most pot holes within the village have been patched.

On a motion by Council-woman Ladonna Carleton, Washington Street will be closed July 23 through 26 for the Beallsville Heritage Days celebration.

Danny Jones and Martha Ackerman, of the Monroe County Veterans Memorial Committee, accepted donations recently from Beallsville American Legion Post #768 delivered Roger Elliott, a Post #768 member, and an additional donation from Herman Zerger, WWII veteran and former prisoner of war.

Donations Accepted by Veterans Memorial Committee

“We’re finally starting to get back on our feet,” said Martha Ackerman, president of the Monroe County Veterans Memorial Committee. “The last few months have been hard but with the donations received from the Beallsville American Legion Post #768, Woodsfield VFW Post 5303, VFW Post 5303 Auxiliary, Woodsfield Eagles, Woods-field Moose Lodge, Herman Zerger and others, we were finally able to pay an outstanding bill and order memorial bricks. The committee has also received the first restitution payment from True Williams via the prosecutor’s office.

Applications have been alphabetized and an inventory has been done for the bricks already laid in the Veterans Walk-way in front of the Monroe County Courthouse. A few of the bricks were found to have had incorrect spellings and/or information. These bricks have been ordered along with a number of others, which when matched against applications, were found to be missing. Those, along with the new orders received, have been forwarded to Randall L. Gallagher Memorials, Inc. for engraving.

The task of laying the bricks is the next order of business for the committee. That will be done soon, noted Ackerman.

“We want to regain the community’s trust in the committee,” said Ackerman. “When money has been taken, it’s hard to trust. With the new committee, we hope our current efforts will be recognized and trust restored.”

For information, call 740-472-0535 evenings.