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PUD Board agrees to Alcoa ‘buying time’ to consider restarting Wenatchee Works

by Kimberlee Craig | May 01, 2017

Chelan County PUD commissioners Monday agreed to a requested change in the power contract with Alcoa Corp. that the company says will preserve the opportunity to further consider restarting its aluminum smelter located south of Wenatchee. Alcoa’s $7.3 million partial payment, which includes a charge for being able to “buy time,” was recommended by staff and provides that the one-year deferral on the balance will keep the financial impact neutral for PUD customer owners.

Board members took the action after reviewing staff analysis, discussing comments gathered from the community and Alcoa workers, and confirming with Alcoa and union representatives that workers will not lose any benefits if part of the $67 million payment due in June is deferred.  

Kelley Woodard, Wenatchee Aluminum Trades Council president, thanked PUD commissioners for the District’s support over the years of continued plant operations. “My goal is to get the plant restarted and get my members back to work. I think this gives us the best chance to make that happen … so I’m in favor.”

After approving the amendment, Commissioner Ann Congdon said the union’s support for the approach of paying a portion now and deferring the balance of the payment a year was key. “I had reservations, but based on what Kelley said, and that he supports it, because of that I did vote ‘yes.’"

Michael Padgett, Alcoa senior vice president for energy, updated PUD board members on the company’s positive earnings for the first quarter of 2017, that the worldwide surplus of aluminum is smaller and that the Trump administration launched a recent inquiry into unfair trade practices in the global aluminum market.  

In other business Monday, commissioners: 

  • Heard updates related to new substations planned to meet growth on the north shore of Lake Chelan and in Leavenworth.
    • For Chelan, PUD staff and the community group are going back to assess earlier areas closer to the “load center” is to determine if there is a suitable location. Staff is talking with property owners in the area. A community meeting is being planned for late May to report on preliminary findings and gather comments on a preferred alternative.
    • Commissioners heard a related report on putting transmission lines underground. Analysis found that putting high-voltage lines underground protects views and can protect lines from weather and fire, but that installation costs can be five to 10 times the cost of overhead (depending on terrain), maintenance costs more and expected life is about half the 80 years of overhead lines.
  • Rescheduled an update on discussions with customers about new digital, two-way meters to the May 15 board meeting.
  • For Leavenworth, commissioners authorized a purchase/sale agreement for a 3.01-acre parcel at the corner of Chumstick Highway and North Road that came available and meets criteria for a possible substation location. General Counsel Erik Wahlquist said the purchase “preserves an option” for a possible location and is not a decision. Staff will continue analysis on site 14, the MEND property, plus the property purchased from John and Wendy Fishburne for $450,000, and return to the board with results in June. PUD staff will be meeting with the Leavenworth focus group for input in the coming weeks.    
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