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Ormet Bill Introduced

February 6, 2014
By CASEY JUNKINS - Staff Writer , The Intelligencer / Wheeling News-Register

HANNIBAL - Gov. John Kasich said he has no power to overrule the Public Utilities Commission of Ohio's order regarding Ormet Corp.'s electricity rates.

Now, Rep. Jack Cera says he wants to give Kasich that authority.

As nearly 1,000 displaced Ormet workers collect unemployment benefits or train for new careers, Cera, D-Bellaire, introduced a bill this week that could help refire the closed smelter plant by allowing Kasich to cancel Ormet's "reasonable arrangement" to purchase electricity from American Electric Power.

"Republicans always talk about how they believe in the free market. All Ormet wants to do is to be able to buy electricity on the free market, instead of being stuck in this deal with AEP," Cera said.

The bill gives the governor the authority to intervene when necessary to allow a company to obtain market rates for their electricity, Cera said.

The reasonable arrangement was put in place a few years ago between Ormet and AEP. While at the time the it helped Ormet, changes in the market cost of electricity have made it less advantageous.

In October, the PUCO decided to lower Ormet's electric costs from $60 to $50 per megawatt-hour, rather than down to $45.89 per megawatt-hour as Ormet requested. The commission further denied Ormet's request to transition to retail choice for electricity purchases in 2014, ordering the company to honor its current contract with AEP through December 2018.

The plant shut down a few days later, leaving almost 1,000 workers with an uncertain future.

According to Cera's bill - Ohio H.B. 421 - the governor would be able to override a PUCO decision involving a reasonable arrangement if the rate customer proves it employs at least 100 people and if it proves that maintaining the arrangement will cause it to file for bankruptcy.

One year ago, Ormet filed for bankruptcy in U.S. District Court in Delaware. The company later announced a planned $221 million sale to Minnesota-based Wayzata, but emphasized this transaction required convincing the PUCO to allow Ormet to have lower AEP bills. Company officials had wanted Ormet to generate its own electricity by late 2015 via a planned natural gas power center.

Rob Nichols, press secretary for Kasich, previously said Ohio electricity ratepayers approved "more than $300 million in assistance for Ormet. That is $300 million more than any other state has provided to them."

Nichols also challenged Cera and Sen. Lou Gentile, D-Steubenville, to introduce legislation that would allow Kasich to overrule the PUCO regarding Ormet.

Reached late Wednesday, Nichols said Cera should ask Ormet to file a new case with the PUCO in an effort to purchase free market electricity.

"We hope he can help the company understand how it can help itself, and more importantly, its workers," Nichols said.

 
 
 

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