Keeping Ormet Plant in Business

Simple, basic fairness may be all the Ormet aluminum plant at Hannibal needs to survive. Whether the company can obtain it appears to be up to the Public Utilities Commission of Ohio.

On Tuesday, the PUCO will hold a hearing on a package of requests by the Ormet Corp., concerning electricity rates paid at the firm’s Hannibal plant.

A Minnesota company has agreed to take Ormet out of bankruptcy, providing several conditions are met. One of them is that Ormet be able to buy electricity, the single biggest cost in producing aluminum, at reasonable prices.

For the past few years, Ormet has been buying electricity from American Electric Power, at discounted rates. AEP wants to end that arrangement.

Ormet has requested the PUCO allow that discount pricing for the remainder of this year.

After that, however, Ormet is not seeking any special favors from either the PUCO or AEP. Its filing with the commission asks only that, after Jan. 1, it be allowed “to purchase power at market rates …”

In other words, Ormet officials believe they can buy electricity “off the grid” from other power companies at rates low enough to keep the Hannibal plant open. In the longer term, Ormet’s plan is to build a natural gas-fired generating station of its own to supply the Hannibal plant.

If the PUCO denies Ormet’s request and orders the company to pay rates sought by AEP, it is likely the Hannibal plant will shut down.

That would be a devastating blow to the about 1,000 men and women who work at Ormet, as well as to their communities.

Ormet’s local payroll alone is about $66 million a year. Directly and indirectly, it has a $238 million annual impact on the area’s economy.

Of course, PUCO analysts understand Ormet’s request is a very complex one in many ways. But if the local plant can survive by finding a power company willing to sell it electricity at an acceptable rate, why should the commission not approve?

Much more than the survival of an aluminum plant is involved. Closure of Ormet would be a devastating blow to hundreds of families as well as several communities. If the PUCO can avoid that by allowing Ormet to buy power “off the grid,” it should do so.