Rehearing sought in rate change for Noranda

Just over three weeks after the Public Service Commission said "No,' Noranda Aluminum and the Missouri Office of Public Counsel both asked for a rehearing on Noranda's request for lower electric rates.

The Office of Public Counsel is a state agency required to represent consumers in rate cases involving investor-owned, regulated utility companies.

Noranda is a Tennessee-based company that owns and operates an aluminum smelter at New Madrid, in the southeast Missouri Bootheel.

Even though the plant is billed at the lowest rate Ameren Missouri charges any of its more than 1 million customers, Noranda last February said its costs were too high and asked the PSC to cut its rates by 25 percent - and raise all other Ameren customers about 2 percent, so the change would be revenue neutral for the utility.

Noranda also asked that, no matter what rate increases Ameren might get in the future, the smelter's increase be limited to 2 percent - and that it be exempted from any increases Ameren can make under its ability to change rates when its fuel costs change.

The company had argued that it needed the lower rates - and might have to shut down the New Madrid plant without them - because it has ongoing cash problems.

"We were not persuaded that Noranda's alleged liquidity crisis was of such severity as to justify granting the relief requested," PSC Chairman Robert Kenney said shortly before the commission's Aug. 26 vote rejecting Noranda's requests.

But earlier this month, Noranda announced it would lay off between 125 and 200 of its nearly 900 employees at the New Madrid plant over the next six months, saying the commission's decision had damaged its ability to keep operating the plant.

On Aug. 1 - after the commission had finished its June hearings on the rate-change proposal and closed the case record - the public counsel proposed a compromise, 16-percent rate cut for Noranda, with a 1 percent increase for other customers.

Commissioners said last month the parties should continue discussing that option as part of Ameren Missouri's new case, that asks for a nearly 10 percent rate increase over the current rates that went into effect in January 2013.

The PSC must decide that case by next June.

"This request is about jobs and the fact that a proposal supported by representatives of all customer classes wasn't considered," Layle K. "Kip" Smith, Noranda's president and chief executive officer said in a news release. "If our rehearing request is successful, and depending on how quickly an affordable rate can be secured, we would be in position to re-evaluate these actions and minimize job losses."

Stan Ivie, president of Steelworkers Local 7686 which represents many of Noranda's New Madrid employees, said in a separate news release: "I fear the recent job losses at this plant are just the tip of the iceberg if state regulators don't step in and quickly approve this compromise."

The PSC said Noranda should seek help from lawmakers if it needs an economic boost.

Ivie said now "is the time for the Missouri Public Service Commission to partner with Noranda and all of our employees to save these jobs. Without the PSC's help, our families are in danger."

Republican state Sens. Gary Romine, Farmington, and Wayne Wallingford, Cape Girardeau, state Rep. Steve Hodges, D-East Prairie, and former Rep. Terry Swinger, D-Caruthersville, all endorsed the proposal to reopen the case.

And the group Fair Energy Rate Action Fund (FERAF), a consortium of consumer groups that generally have backed Noranda in its battles with Ameren, said in a news release that "the 200 jobs eliminated at Noranda are a direct result of the constant barrage of electric rate hikes by Ameren Missouri in recent years."

Neither Ameren nor the group Missourians for a Balanced Energy Future - which generally supports the utility - issued any statements or comments this weekend on the rehearing request.

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