Seeking to end a big rate dispute between Noranda Aluminum and utility Ameren, Missouri state officials have proposed a compromise that would lower the Franklin-based company's electricity tab but require it to maintain its employment base at its massive Bootheel factory and invest $35 million a year there.
Noranda has been petitioning the Missouri Public Service Commission for a big rate cut from Ameren, to which it is now paying $41.03 per megawatt-hour. The local company has asked regulators to cut that to $30 per megawatt hour and put a cap of 2 percent on rate increases for the next decade, claiming that a denial of that request could lead it to eventually shut down its New Madrid complex — which last year cranked out 586 million pounds of primary aluminum, about 14 percent of all U.S. production. Ameren has fiercely resisted that move and regulators have agreed with the utility's standpoint that such a cut wouldn't cover its production costs.
On Thursday, however, the Missouri Office of the Public Counsel, an independent agency that advocates for utility customers, filed a proposal that would cut Noranda's base rate to $34.44 per megawatt-hour for the next five years, drastically cut back on the fuel surcharges Ameren tacks on and limit to 2 percent any rate increases the utility could impose on Noranda.
On the flip side, Noranda would have to guarantee that its New Madrid workforce would stay above 850 — the company now employs about 890 people there — and invest $35 million per year in New Madrid.
John Parker, Noranda's vice president of communication and investor relations, said company officials are reviewing the OPC's filing and "will make a decision within the time provided by the PSC's rules." The PSC had been scheduled to make a final decision on Noranda's first request Aug. 6.
Shares of Noranda (Ticker: NOR) are up more than 3 percent in mid-day trading Friday to about $4.50. So far this year, they've climbed 36 percent.
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