Montana Smelter Shuns Bpa, Buys Power From New Suppliers

Another Northwest smelter has decided to bypass the Bonneville Power Administration and shift a significant share of its electricity load to other suppliers.

Columbia Falls Aluminum Co. announced Tuesday it would buy 245 megawatts of power from two new sources, Portland-based PacifiCorp and Houston-based Enron Corp., beginning April 1, 1996.

The plant near Kalispell, Mont., consumes 345 megawatts at full production.

The five-year deal is the fourth - and by far the biggest - in which Northwest smelters have abandoned their historic, 100 percent dependence on Bonneville.

And it comes on the eve of the federal agency’s planned disclosure of the rate at which power will be offered to the smelters beginning Oct. 1, 1996.

Vice President Jim Stromberg said owners of the Columbia Falls smelter decided that relying on Bonneville for all their power needs was too risky given the agency’s escalating costs.

“There’s a lot of attractively priced power right now,” he said.

Stromberg would not disclose the price of the power that will be purchased from PacifiCorp and Enron, but said that Bonneville could retain the remainder of the load, depending on the rates announced today.

He noted that power expenditures are half the cost of production at the Columbia Falls plant, which employs about 600.

Bonneville spokeswoman Dulcy Mahar said the announcement was disappointing but not surprising given the intense competition in newly deregulated power markets.

“We’re going to take some hits,” she said.

Mahar said the agency is caught between customers like the smelters that want to lock in long-term, inexpensive power contracts, and other interests that assert Bonneville is moving prematurely.

Washington Water Power Co. has signed deals to supply a portion of the power needs of Kaiser Aluminum & Chemical Corp. and Northwest Aluminum Co.

, DataTimes