Ormet Power Rates Critical
Half the equation the Ormet Corp.’s new owner needs to solve to get the Hannibal aluminum plant back in operation appears to be in place. Aluminum prices are on the upswing.
Taking care of the other half of the problem – electric bills – is another question, however.
A bankruptcy court judge has approved the sale of Ormet to Niagara Worldwide, a Wisconsin company that buys idle industrial facilities and tries to profit from them.
Too often, such sales are followed by the appearance of dismantling crews at old plants. Equipment is removed and sold. Some of it, along with buildings, is marketed as scrap.
But Niagara Worldwide President Eric J. Spirtas seems focused on doing something else at the Hannibal plant, where nearly 1,000 local men and women worked until last year. “We are going to do anything we can to get jobs on that site. We are going to find out what that property can support,” Spirtas told our reporter.
Can it support an aluminum smelting operation like the one that operated at Hannibal for decades?
Two crucial factors forced Ormet’s former owner into bankruptcy. One was what the company could charge for the metal it produced.
Aluminum prices are notoriously cyclical and, during recent years, have been subject to what some analysts say is surplus production capacity. Overseas mills are part of the problem.
But aluminum prices on international markets are trending upward. The metal was selling for 90 cents a pound this week, more than has been the case for two years.
Although current prices remain far below the $1.25-per-pound peak of three years ago, they may continue climbing past current levels.
But the straw that broke Ormet’s back was electricity prices. The company’s attempt several months ago to convince the Public Utilities Commission of Ohio to approve a substantial break in rates charged the firm by American Electric Power failed.
Whether power rates conducive to reopening the Ormet plant can be negotiated is primarily up to AEP, of course. While the PUCO plays a role, neither it nor other local, state or federal officials can – or should be able to – order AEP to charge only what Ormet can afford.
Still, there may be some influence government can exert on the issue. Getting nearly 1,000 Ohio Valley residents back to work in Hannibal certainly merits the attention of public officials at all levels.