New Ormet Owner Exploring Options
By J.W. JOHNSON JR.
HANNIBAL – A self-sufficient facility – including a natural gas power plant – is what Niagara Worldwide President Eric J. Spirtas would like to see at the Ormet Corp. site his company purchased last month.
Spirtas and the Hannibal Development Partners group – managed by Niagara Worldwide – are exploring options for the site, which Niagara purchased for $25.25 million during a bankruptcy auction in June. With the sale becoming official Thursday, Spirtas said a search for new investors is on in full force.
“The fact that we have a dynamic set of assets that can produce an industry-changing amount of aluminum is key,” Spirtas said. “The bigger issue is the power it takes, the people it takes and the investment it takes.”
The power issue is not new to Ormet, as it was the catalyst for the plant’s bankruptcy declaration last year. Wayzata Investment Partners expressed interest in paying $221 million to purchase the plant, provided Ormet could secure a reduced electricity rate from American Electric Power. Following a dispute with the Public Utilities Commission of Ohio and AEP – in which Ormet asked the PUCO to lower Ormet’s AEP costs from $60 to $45.89 per megawatt-hour – the aluminum producer shut down the smelter in October when the PUCO did not grant as much rate relief as Ormet wanted. In February, Ormet officials announced intentions to sell the plant, roughly one year after the company filed for bankruptcy protection.
On Thursday, United Steelworkers of America union rep John Saunders said the union would continue looking for an operator willing to restart the idled facility, as well as work to obtain a cheaper rate with AEP.
Spirtas said Friday while the company is willing to work with any scenario, there are other options being considered for the plant as well.
“We believe the only way to produce the amount that is standard there is through a gas powerplant program,” he said.
That plant would need to generate about 540 megawatts, and Spirtas said the company is not looking to use outside providers as sources. Instead, he said the company can find a way to provide that power on-site, creating a self-sustaining system.
“We are capable and interested in providing gas powered electricity,” he said. “There are many groups around the world that would be willing to provide a 20-year power purchase agreement. The site has to be self-sufficient, based on what everybody has learned.”
Spirtas said with that possibility as an option, the biggest remaining hurdle is finding an investor.
“We’re not aluminum manufacturers,” he said. “We believe we have a power plant, we’re just waiting on the other side.”
With the finalization of the sale Thursday also came the termination of employment for the remaining employees at the plant. Saunders said the nearly 1,000 workers and the union as a whole were willing to sit down with Spirtas and other company officials to find a way to resume operations at the plant. On Friday, Spirtas said he was open to that discussion.
“We are absolutely happy to work with not only the union but with anyone else around the country or the world,” he said.