Our Opinion: PSC rejects misdirected, unfair proposal
Friday, August 22, 2014
Missouri’s Public Service Commission (PSC) voted unanimously, and wisely, to reject Noranda Aluminum’s request for a further reduction in it electric rates.
The request, by any yardstick, was unfair.
Noranda already pays a reduced rate, which the PSC says is the lowest cost for electricity of any Ameren customer. Reduced rates for bulk customers are common, and Noranda qualifies for its existing, lower rate because aluminum processing requires consistent, large amounts of electricity.
Unfairness came into play when Noranda proposed its further rate reduction be offset by rate increases for other Ameren customers.
The proposal, said Ameren official Warren Wood, “was harmful to our other customers and would have set Noranda’s rate well below what it costs to serve them, resulting in a shift of over half-a-billion dollars onto our other customers.” Wood is Ameren Missouri’s vice president for legislative and regulatory affairs.
Noranda’s proposal was based on its claim that a lower electric rate was needed for it to remain in business.
In response, PSC Chairman Robert Kenney said: “We were not persuaded that Noranda’s alleged liquidity crisis was of such severity as to justify granting the relief requested.”
No one wants to see Noranda Aluminum go out of business. The smelter near New Madrid employs about 900 people and is a valuable contributor to the economy in Missouri’s Bootheel.
But economic development issues, PSC commissioners correctly pointed out, are a matter for state lawmakers to consider, not the regulatory agency for public utilities.
Noranda made an unfair proposal to the wrong group. Unanimous rejection by PSC commissioners was both fair and justifiable.
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