PSC staff, Public Counsel: Block Noranda requests

Missouri's five-member Public Service Commission should not approve either of Noranda Aluminum's two requests, unless it can get more details about the proposals' effects, the commission's staff said last Friday.

And the Office of Public Counsel offered a similar caution about Noranda's proposal to reduce the rate it pays for electricity while raising other customers' rates.

But John Parker, Noranda's vice president for Communications and Investor Relations, told the News Tribune Monday: "The positions from the PSC staff and the OPC are just a part of the process - and we are still very confident in our case, and in the data that supports our position."

Noranda's aluminum smelter near New Madrid, in the Bootheel, is Ameren Missouri's single biggest electricity consumer. The company is the only customer in a separate, "Large Transmission Service" class of customers, and has the lowest rate charged in Ameren's rate schedule.

Citing competition problems within the nation's aluminum industry, Noranda last February asked the commission to reduce its rate - in effect only since January 2013 - and to raise other customers' rates so that the proposal is revenue-neutral to Ameren.

The commission will take formal testimony on that proposal next Monday and Tuesday, after the staff takes public comments this week.

Groups opposed to Noranda's requests said Monday that the PSC staff and Public Counsel's comments show "opposition" to those requests.

But both agencies said in their separate "Statement of Positions" that the PSC has the legal authority to grant Noranda's requests, but that they think the commission needs more evidence before it makes that decision.

"The evidentiary hearings will be the opportunity to, really, sort through that," Parker said Monday.

"As it relates to the data, I don't think there are that many differences between our data - what we're showing - and what the others' data are showing."

In a handout provided to the News Tribune, the staff says it "is appropriate for Noranda to pay a lower average rate than most other customers. However, Staff is concerned that the 3-cents per kWh rate Noranda has requested is too low."

So, the handout reports, the PSC Staff "does not support Noranda's request at this time, but Staff does support Noranda's continued operation and Noranda remaining a viable retail customer of Ameren Missouri."

In testimony submitted by Lena Mantle, a retired PSC Staff member now working as a consultant to the Public Counsel's office, the OPC recommended that the "Commission not adopt the exemplar tariff sheets prepared by Noranda."

But, Mantle added, if the PSC decides to grant Noranda's request, it should require Noranda to commit to "continued employment at the smelter, guaranteed amounts of additional capital investments, capitalization strategies that preserve the smelter's ability to continue to operate and Noranda returning, over time, any discount provided by Ameren's other ratepayers."

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