Decision on Ormet power deal to cause loss of jobs
From wire, staff reports
A dispute between a utility company and a major employer in Monroe County is expected to cause a large group of workers to lose their jobs.
On Wednesday, the Public Utilities Commission of Ohio denied Ormet, of Hannibal, emergency rate relief, which would have allowed the company to stretch out its electrical power bills to American Electric Power, starting in January.
“The existing reasonable rate arrangement previously approved by the commission remains in full force and effect, and Ormet thereby continues to receive a substantial discount off the price of its power,” said Chairman Todd A. Snitchler, of the PUCO.
Because of that decision, the plant will have to shut down at least two of its six aluminum pot lines to reduce costs, said Mike Tanchuk, Ormet president and chief executive officer.
Tanchuk said he was “terribly disappointed.”
“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,” Tanchuk said. “Ormet must receive the relief requested to continue operations and build a future for our employees and community.”
United Steel Workers representative John Puskar said about 860 jobs could be gone after four of the six pot lines shut down.
“The Public Utilities Commission of Ohio’s refusal could jeopardize nearly 1,000 good paying jobs in Eastern Ohio,” said State Sen. Lou Gentile, D-Steubenville on Friday. “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.
AEP and Ormet had agreed in 2009 to fix the rate for power at the plant at $39.66 per megawatt hour. The two companies now are in a fight over AEP’s plan to raise the rate to $62.83 per megawatt hour.
“I’ve heard it time and time again,” said John Schmidt, Ormet retiree and mayor of New Matamoras. “They’ll shut down for six months or a year, and they’ll open back up. Truthfully, I take that with a grain of salt. The only person that’s going to take a hit is the working man and the consumers.”
On Wednesday, the PUCO ruled against Ormet’s emergency relief request, waiting until Aug. 27 to hear the case. Ormet was hoping for the rate relief to be able to complete the $221 million sale to Wayzata Investment Partners to try to emerge from bankruptcy.
“Ohio’s utility regulators had the opportunity to keep 1,000 people off of unemployment in Ohio,” Gentile said. “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.”