Two More Aluminum Smelters Limiting Operations Company Will Work With Bpa To Use Electricity Elsewhere

Golden Northwest Aluminum Inc. will curtail production at its two smelters in the Columbia River Gorge towns of Goldendale, Wash., and The Dalles, Ore.

With electricity prices surging, the company reached a tentative deal with the Bonneville Power Administration to send the massive power it uses to make aluminum into a tight electricity market until next October.

Hundreds of Steelworkers will be laid off at the two smelters, yet the company will pay full wages during the shutdown.

The sale of 250 to 300 megawatts is expected to help ease the sting of higher electricity prices for people and businesses in the Northwest. One megawatt is enough to power about 600 homes.

The company will keep using about 50 megawatts at the 700-employee Goldendale plant to run at 10 percent capacity, said CEO Brett Wilcox. The Dalles plant, with 525 workers, will be closed.

In recent weeks, regional aluminum companies have chosen to sell their federal power supply into the lucrative open market instead of making metal.

Kaiser, for example, closed its Mead smelter this month and resold its remaining 191-megawatt December supply of BPA electricity to net $52 million. Then it resold the same allotment for January and earned another $37million.

Kaiser’s 545 laid-off Steelworkers are receiving full wages at least through January.

The company, however, is still determining what to do with the remaining cash windfall as pressure mounts to make sure it’s spent in the Northwest instead of added to the Houston-based company’s bottom line.

And in Montana, the Columbia Falls Aluminum Co. has halved production to sell a portion of its BPA power. No layoffs are expected until June 30.

Golden Northwest already has plans for its BPA power proceeds, although the expected revenues haven’t been disclosed.

Besides the salary plan, the company will pay a share of its sales profits to BPA and sell the federal agency some of its power at prices described at “well below current market prices.”

Also, Golden Northwest will reinvest the proceeds from power sales into new electricity generation projects.

Specifically, Wilcox said, the company will provide capital for a 248-megawatt gas-fired power plant at Goldendale.

“This is about finding the best way to make sure that well-paid industrial employment is preserved for the future in an otherwise distressed rural area,” Wilcox said. “This curtailment makes sense for our workers, our future and the region.”

The costs of the plants haven’t been discussed.

David Foster, Steelworkers’ Northwest district union director, agreed with Goldendale’s move.

“They’re really being the model here,” Foster said. “This power shouldn’t be used in a private matter to make profits.”

He added: “Wilcox is being very thoughtful about what’s good for public policy, the region and ratepayers. He’s not just thinking about what’s good for Brett Wilcox.”

BPA spokesman Mike Hansen said Wednesday that officials were still negotiating the final details of the Golden Northwest deal. But he added that the outline of the agreement was consistent with what BPA wants from customers who decide to sell federal power instead of use it for manufacturing.

“It’s good for us,” he said, “and we’re looking for ways that Golden Northwest can benefit at the same time.”