Raised Rates Threaten Aluminum Smelters

Jan 8, 2012

In mid-2009, the future looked promising for two of the biggest industries in northwestern Kentucky — the Rio Tinto Alcan and Century Aluminum smelters. They had secured a new long-term contract for the enormous amounts of electricity they need at prices the companies thought could keep them competitive; that power is vital, accounting for one-third of their cost to produce aluminum. Further, power producer Big Rivers Electric Corp. didn't anticipate a need to raise rates until 2016. But after sales of surplus electricity to other power companies came in lower than expected, Big Rivers requested an increase in rates last year.