Bonneville Power deals to buy back energy

Agreement shuts down operations at Northwest Aluminum smelters Related stories

John Stucke - Staff writer

With just days remaining before announcing its rate increase, the Bonneville Power Administration locked in a deal to buy back power from two more aluminum smelters.

It's another move to stave off a regional energy crisis as BPA cobbles together conservation measures and industry shutdowns to keep power prices down.

In the agreement reached Friday, BPA will pay Golden Northwest Aluminum Inc. an undisclosed sum to curtail operations. Smelters in The Dalles, Ore., and Goldendale, Wash., will stay idle until April.

The agreement will return 236 megawatts to BPA. That's enough power for 142,000 homes. The deal also pays Golden's laid-off work force full wages and helps the company develop a wind power project.

Left unresolved, however, is what Bonneville will do with Kaiser Aluminum Corp.

Bonneville's deadline for cutting the region's electricity use passed on Friday.

However, the two camps are negotiating. Yet an agreement to extend Kaiser's shutdown beyond October appears distant.

Bonneville reportedly has offered to pay Kaiser between $3 and $4 a megawatt hour for the company's 251-megawatt load. Kaiser wants more than $27, according to letters from the company to Bonneville.

"I think the reaction would be publics screaming like stabbed owls" if Bonneville pays Kaiser that kind of money, said Jerry Leone.

She is manager of the Public Power Council, which represents many of the Northwest's public utilities.

She said Bonneville has offered other aluminum companies and some of her public utility members $15 to $20 to curtail and conserve.

"As far as we can tell, that's what they've been paying," Leone said.

Bonneville spokesman Ed Mosey said the agency is close to its goal.

"We're going to put out the (rate increase) on Friday, and I'd say the lion's share is in," he said. "There's still some load to reduce out there, and we're looking at it."

He didn't offer details about the Kaiser negotiations.

Kaiser spokesman Scott Lamb said the company is hopeful it soon can reach some sort of an accord with Bonneville.

The company, he said, is interested in a six-month curtailment, much like the deal Bonneville signed with Golden Northwest.

Kaiser has said all along that it wants to make aluminum next year, not sit idle for two years.

During the past six months, Kaiser and Bonneville disagreed on how the company should spend more than $460 million in proceeds netted by reselling its federal power supply.

Kaiser considers the proceeds a private business matter.

Bonneville disagrees and charges Kaiser of violating a contract.

The high stakes dispute has put Kaiser's future supply of federal power in question.

As it stands, Kaiser expects Bonneville to deliver its massive allocation beginning Oct. 1.

Bonneville has said it may not serve Kaiser, calling it a rogue company that has violated its contract.

http://www.spokesmanreview.com/news-story.asp?date=062601&ID=s982968

-- Martin Thompson (mthom1927@aol.com), June 26, 2001