By NOREEN HYSLOP
Managing Editor
Elected officials from Stoddard, New Madrid, Dunklin, Pemiscot, and Butler Counties have banded together in support of an electricity rate reduction that the New Madrid-based Noranda Aluminum plant has requested from Ameren Missouri.
A letter to the Public Service Commission in Jefferson City, signed by nearly every elected official across the five counties in southeast Missouri, was forwarded to The Daily Statesman on Tuesday morning. The letter is dated June 9, 2014, and is a plea from the elected officials, -- including Stoddard County's sheriff, prosecuting attorney, all three commissioners, the recorder of deeds, circuit clerk, public administrator, the assessor, and the treasurer/collector -- for the Commission to "consider the citizens of our counties and the drastic effect your decision will have on each and every one of their lives" should the Commission decide not to grant a rate reduction proposed by Noranda.
The battle between Noranda and Ameren ensued in February when Noranda Aluminum Holding Corp. accused Ameren of overcharging its customers and filed two separate requests with Missouri's Public Service Commission (PSC). One of those requests accused Ameren with charging customers more than what is allowed by the PSC, which is 9.8 percent. The other request asked for a reduced rate to purchase electricity from Ameren Missouri.
A report from the St. Louis Business Journal states that if the rate request was granted to Noranda, it would represent a savings of about $580 million over the next 10 years. Noranda is asking to pay $30 per megawatt hour, which is $11.44 less per hour than what is currently charged. A Noranda spokesperson said in March that Noranda's rate is the second highest out of the nine smelters in the U.S.
While Noranda is seeking a reduction in their electricity rate, Ameren is talking of a rate hike by year's end, though the amount of that hike has not been announced. Ameren has reportedly invested more than $1 billion in upgrading its system by the end of 2014 and says they will need higher rates to pay for their investment.
Noranda officials said in February that a rate cut for its smelter is key to preserving jobs at their New Madrid Plant, a facility that employes about 900 individuals, many of whom are from Stoddard County.
On May 9, 2014, the PSC recommended against Noranda's proposed reduction, saying that the newly proposed rate would not cover Ameren Missouri's costs in operating the plant. Noranda consumes roughly the same amount of power as the city of Springfield, Mo. or 10 percent of all power Ameren produces, according to a report in the St. Louis Post-Dispatch in May.
Should a rate reduction materialize, Noranda has suggested that an increase of 1.8 percent for Amercn customers be instituted to compensate for the loss.
While reports earlier this year from Noranda stated that they could feasibly reduce their staff by up to 200 employees, the implication in this week's letter from local elected officials is that the New Madrid Noranda plant will inevitably shut their doors without the requested reduction.
In Monday's letter to the PSC, local elected officials state, "We write you today as a collective group to express our extreme concern for the economic well-being of our communities should the unthinkable event of the closure of Noranda Aluminum occur due to increased electric rated charged by Ameren Missouri."
The letter also states that Noranda "could not survive" an increase of $44 million over six years for a single overhead item such as electricity" and to "consider the disastrous effects to our region that the closure of Noranda will cause in your deliberations."
The letter goes on to cite that "irreparable cascading damage" to several business sectors in southeast Missouri who relay on the plant's operation to sustain, would also take place, along with "crushing numbers of defaults and home foreclosures" in the banking industry, should Noranda cease operations in New Madrid.
The letter concludes, "To preserve our regional economy and way of life, we respectfully request that you grant Noranda Aluminum their requested rate reduction."
A full copy of the letter to the Public Service Commission may be found at www.dailystatesman.com, along with signatures from local elected officials.