A proposed ten-year power sales agreement between the Bonneville Power Administration and Alcoa’s Intalco plant in Ferndale, Wash., would provide long-term certainty to Alcoa and its 625 employees while allowing BPA to serve energy needs that yield operational and financial benefits for the region.
The proposed agreement would provide up to 300 average megawatts through September 2022. Three hundred average megawatts is enough electricity to serve more than 200,000 Northwest homes for a year. The plant is located six miles north of Bellingham, Wash.
BPA will take public comment on the proposed power sales agreement and its accompanying equivalent benefits test through Nov. 7, 2012.
BPA’s current power sales contract with Alcoa was set to expire May 26, 2012, but has been extended month-by-month since then while long-term contract negotiations have continued. The current extension expires Dec. 31, 2012, assuring continued service during the public review process.
“Our analysis indicates that this proposal would provide another decade of stability to Alcoa, the local community and BPA ratepayers,” said Suzanne Cooper, vice president, BPA Power Services Bulk Marketing. “We look forward to hearing from the public as we consider moving forward with this proposed agreement.”
While preparing the proposed power sales agreement, BPA conducted an analysis, called the equivalent benefits test, to determine whether net benefits would flow to BPA ratepayers through a contract with Alcoa. The results of the latest test show that service can be provided through September of 2022 while continuing to benefit all BPA ratepayers. The ability to offer a ten-year extension is primarily due to the long-term market price forecast for Northwest electricity, which has been driven down by low natural gas prices.
In addition to providing Alcoa 300 average megawatts at BPA’s Industrial Power (IP) rate, the proposed agreement requires Alcoa to:
- Employ a specified number of workers at the Intalco facility for the duration of the contract.
- Make available to BPA ten percent of the power delivered to Alcoa should BPA need it to meet its obligations during a system disturbance.
- Invest $35 million in capital improvements in the facility during the first seven years if it wants the contract to run its full ten years.
The Intalco facility produces approximately 278,000 metric tons of aluminum metal per year and has three potlines. It began operations in 1966. Today, Intalco is the only smelter directly served by BPA.
BPA, celebrating its 75th anniversary in 2012, is a nonprofit federal agency that markets renewable hydropower from federal Columbia River dams, operates three-quarters of high-voltage transmission lines in the Northwest and funds one of the largest wildlife protection and restoration programs in the world. BPA and its partners have also saved enough electricity through energy efficiency projects to power four large American cities. For more information, contact us at 503-230-5131 or visit our website at www.bpa.gov
