JPEC Board Of Directors Unanimously Votes To Oppose Concessions For Aluminum Smelters

September 07, 2012

The Board of Directors of Jackson Purchase Energy Corporation (JPEC) has unanimously voted to oppose concessions for aluminum smelters following Century Aluminum's request to Big Rivers Electric Corp. for a multi-million dollar per year bailout.

JPEC, one of three distribution cooperative owners ofthe Big Rivers, said that caving in to the smelters' request for more than $110 million dollars a year in bailouts would increase their typical residential customer's electric bill by more than 37 percent. For the average homeowner, the increase would equate to approximately $1,000 more a year in electric bills. JPEC serves approximately 30,000 residential and business customers in the region.

"Every JPEC board member is committed to jobs and economic development," said Gary Joiner, chairman of the board. "But we're also committed to fairness and making sure that our residential customers aren't left holding the bag for a company that only three short years ago was begging for the electric rates they currently pay. We are hopeful that some sort of resolution can be reached- but our representatives on the Big Rivers board are committed to voting only for an equitable settlement."

Joiner noted that JPEC's two board members who also serve on the six-member board of Big Rivers-Wayne Elliott and Lee Bearden--already have voted against any unfair subsidy to aluminum smelters.

A 15-year power contract signed between Century Aluminum and Big Rivers in 2009 was structured to keep power rates at a level agreed to by Centmy. On August 20, Century gave the required one-year notice that it will te1minate its contract with Big Rivers. The other aluminum smelter in Big Rivers' service tenitory is the Rio Tinto Alcan plant in Webster County.

"We understand the current economic climate and no one wants to see the job loss that would occur if Centmy chose to close its Hawesville smelter," said Kelly Nuckols, president and chief executive of JPEC. "But asking our customers to pay an additional $1,000 out of their pockets every year in increased electric rates is just not right."

The JPEC board resolution notes that if Centmy Aluminum makes good on its threat to close the Hawesville smelter, "the JPEC board will do all it can to work with the Big Rivers board and other entities in support of a major industrial recruitment and retraining effort to get laid-off employees back to work, and replace lost sales of electricity."

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