Alcoa should learn later this spring whether the Bonneville Power Administration gives its final approval for a power agreement that would allow the company's Intalco aluminum smelter in Ferndale, Washington, to remain in partial operation at least into February 2018, BPA officials said Thursday.
The 279,000 mt/year plant was scheduled to close by the end of June.
Under the freshly negotiated deal, Alcoa would continue to operate Intalco at its current level of two-and-a-half potlines, or about 226,000 mt/year, with approximately 350 MW of power, purchased mostly on the market, rather than curtailing production to only its casthouse operation and buying a maximum of 10 MW from BPA under an existing amended contract.
Mark Miller, a BPA account executive, said the existing amended contract would end June 30 and the new arrangement would begin July 1.
Under the original contract, which started in January 2013, BPA was selling 300 MW to Alcoa, he said.
"They gave us a termination notice and we sat down with them and negotiated new terms of the contract which dropped the purchase amount to 75 MW, which allowed them to buy more from the market," Miller said. "In November [2015], they gave us a notice that they wanted to curtail their purchases from us down to 10 MW."
The parties then resumed negotiations. That led to the new accord that Miller said provides for other provisions designed to protect both Alcoa and BPA.
Alcoa would continue to buy 10 MW from BPA at its industrial power rate and BPA would sell Alcoa another 25 MW at an indexed market price plus a small adder.
Miller said the BPA price would be greater than $40/MWh, although he was not specific. Alcoa would be able to continue to access the market for the remainder of its power needs.
In all, BPA estimated the total value of the proposed amendment is slightly more than $5.29 million to the federal nonprofit agency based in the Pacific Northwest.
Alcoa officials did not immediately respond to an email Thursday seeking comment on the pending agreement.
Alcoa permanently closed its 269,000 mt/year Warrick aluminum smelter in Warrick County, Indiana, at the end of March.
