State power authority gives Alcoa cheapest electrical rate

State power authority gives Alcoa cheapest electrical rate

The signed off Thursday on a deal to provide bargain basement electric power to aluminum giant Alcoa’s North Country plant amid concerns it might spark a stampede of other businesses seeking the same price.

Under the deal, NYPA will cut the price of power being sold to Alcoa and tie the rate to future changes in the price of aluminum.

Alcoa also agreed to offer buyout packages to up to 100 unionized and non union workers.

Also, if the company fails to maintain 600 jobs, it would face a financial penalty that could ultimately require it to pay back to the state up to $40 million.

Alcoa touts the plant, first opened in 1902, as the longest continually operating aluminum smelter in the world. The sprawling, 2,700 acre Massena plant is at the Canadian border in St. Lawrence County. this makes for a complicated situation.”

The NYPA press office declined to disclose the current rate being paid by Alcoa, citing confidentiality. But under the agreement, based on the current depressed price of aluminum, Alcoa would pay $12.25 per megawatt hour. (A megawatt hour can run about 900 average homes)

In 2014, the average wholesale price of a megawatt hour statewide was about five times higher at $69.30, according to a report from the. The long term average is about $65 a megawatt hour.

If the price of aluminum rebounded to its recent 2011 peak, under a sliding scale in the agreement, Alcoa would be charged $29.75, more than twice what it would be today, but still significantly less than the cheap jerseys market price.

Under the worker buyout deal accepted by Alcoa, hourly employees who leave voluntarily would get a lump sum payment of $10,000, along with another $400 for every year of service; an additional $400 a month added to their monthly pension check until age 62, and loosened retirement eligibility.

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