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Legislators frustrated with PUCO decision

August 3, 2013
From staff reports , The Herald-Star

COLUMBUS -Two area legislators expressed disappointment and frustration with the decision by Public Utility Commission of Ohio to deny a request by the Ormet Corp. for an emergency reduction in electric rates.

State Rep. Jack Cera, D-Bellaire, and Sen. Lou Gentile, D-Steubenville, released a statement Friday afternoon saying they had hoped the PUCO would grant Ormet's request for lower utility rates from American Electric Power so they could complete a $221 million sale as a means to emerge from bankruptcy.

Last summer, Ormet issued a Worker Adjustment and Retraining Notification Act notice regarding the possibility of laying off 998 employees.

Both legislators have been engaged in conversations with Ormet, AEP, the United Steelworkers and the state of Ohio for nearly a year.

"The Public Utilities Commission of Ohio's refusal could jeopardize nearly 1,000 good paying jobs in Eastern Ohio. Ormet is asking for temporary relief to save and protect employees and the PUCO is fully aware that Ormet's ability to keep operating was contingent upon the approval of an adjusted electricity price," said Gentile.

"Ohio's utility regulators had the opportunity to keep 1,000 people off of unemployment in Ohio. Now, dedicated and longstanding employees are faced with uncertainty about their pensions and future employment. This decision will not only affect the workers, it is going to hurt families, the Switzerland of Ohio Local School District and the local economy," said Gentile.

"Keeping Ormet operating is vital to the Ohio Valley and the state of Ohio. We have been working with state officials to make sure they understand the economic and social impact that losing Ormet would have on the area. Ratepayers will be hit with additional costs whether Ormet is operating or not since they are such a large user of power and a huge part of AEP's rate base. The closing of Ormet will devastate Monroe County. We believe the governor's office can work to expedite a decision more promptly than the end of August to help the state of Ohio remain competitive in job growth and retention," stated Cera.

Ormet Corp. President and Chief Executive Officer Mike Tanchuk said the company soon will only operate two of its six aluminum potlines because the company must quickly reduce costs.

Tanchuk said he was "terribly disappointed" the Public Utilities Commission of Ohio on Wednesday refused to grant emergency rate relief in Ormet's ongoing dispute with AEP.

The rate dispute is taking place because AEP could raise Ormet's bills to $62.83 per megawatt hour. The rate was just $39.66 per megawatt hour when the companies reached their power agreement in 2009, he said.

"In the current metal pricing environment, Ormet simply cannot overcome the massive increase in the Ohio Power electric rates experienced over the past several years. Ormet must receive the relief requested to continue operations and build a future for our employees and community," Tanchuk said.

He said earlier this year the company had about 860 employees working at the Hannibal plant. The company already had cut back to running just four of its six potlines, but now will reduce operations to just two of the lines.

"Ormet is trying to stay open to save these jobs," said USW staff representative John Puskar, whose coverage area includes Ormet. "They have done everything they can. You are talking about 1,000 jobs that could be gone."

Tanchuk could not be reached for further comment, while Puskar did not know exactly how many employees would be affected by this reduction.

The PUCO ruled against Ormet's emergency relief request on Wednesday deciding to hear the case on Aug. 27. Ormet officials hoped to gain the lower AEP rate relief so they could complete the $221 million sale to Wayzata Investment Partners as a means to emerging from the bankruptcy case it filed in February.

Puskar said he believes Kasich has the power to save Ormet. However, Kasich spokeswoman Connie Wehrkamp said the state of Ohio has "worked hard to help" Ormet succeed, including allowing the company to take millions of dollars worth of subsidies at the expense of other AEP customers.

"It's unfortunate that the company has taken this step," she said. "We'll continue to work with the company to provide additional appropriate help, and also work with employees to ensure they get the assistance they need going forward."

 
 

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