Posted by J Purcell on Sat, Mar 22, 2014, at 8:11 PM:
Please visit this site to learn about the proposed Noranda Bailout which will increase all of our utility cost. If you are opposed to this bailout please sign the petition as I did. Here is the link http://moenergyfuture.org/stop-norandas-bailout/
Replies (57)
I've been curious why Aluminum production uses electricity instead of natural gas.
-- Posted by Old John on Sat, Mar 22, 2014, at 11:33 PM
Jay, I was interrupted before I finished,
The site doesn't really explain what I though I understood which is Noranda is claiming it needs cheaper electricity to maintain the jobs that people and our local economy depend on. Then Ameren claims they need an overall return on their investment to maintain and expand their vital service to the community, thus the average consumer will have to pay to make up the difference of reduced revenues from Noranda.
I contend that if they wish to discount for volume they should invest in the means to provide the volume.
I'm ignorant to how all this works but suspect federal and state government policy is what holds back that investment.
I would be interested in learning more.
-- Posted by Old John on Sun, Mar 23, 2014, at 12:29 AM
Thanks Nil, I remember reading about the location subsidy explanation. Didn't know the part about electrolysis.
-- Posted by Old John on Sun, Mar 23, 2014, at 12:51 AM
"to get perpetual subsidies"
Which they do get, year after year after year.
-- Posted by survivalist on Sun, Mar 23, 2014, at 5:46 AM
Shut the place down. Better to pay welfare to the former employees than pay it to noranda.
-- Posted by FreedomFadingFast on Sun, Mar 23, 2014, at 8:43 AM
I worked at Noranda for 20 yrs.(now retired)in middle management and will try to make my comments as simple as possible. "Nil" is correct about the electrolysis process of smelting aluminum. This process requires huge amounts of electricity to separate the aluminum from the oxides in the refined raw material of Bauxite called Alumina. The refined Alumina is shipped by barge from Lake Charles, LA which is one of the reasons the plant was located south of New Madrid along the Mississippi. A second reason for the placement of the plant was a source of electricity from the grid of the Associated Electric plant next door to Noranda. Associated was expanded to allow more production of electricity that Noranda needed. The Rod Mill furnaces which produce aluminum rod used in the making of household electrical wire to the highline transmission lines are ran on natural gas as well as the Cast House furnaces which produces the finish products of billet, sow, and pigs. Look at all the jobs(construction, permanent, and retirees)provided by both companies and you will see that Noranda has been a wise and profitable decision for SEMO. For more info on this aluminum production process refer to the following link: http://en.wikipedia.org/wiki/Aluminum
-- Posted by Truth Slinger on Sun, Mar 23, 2014, at 9:38 AM
SEMO
These people don't realize the impact to our area the loss of Noranda would be. The people working there spend a hefty sum of cash locally.
We used to haul pigs out of there years ago. I also have several friends that retired from there and the power plant.
The central location for distribution was a no brainier when it was built. The bad thing is Obama and crew want to end coal fired plants so it might be doomed anyway.
-- Posted by We Regret To Inform U on Sun, Mar 23, 2014, at 6:13 PM
Why should taxpayers subsidize a private for-profit company? Free-enterprise? I think not.
-- Posted by persnickety on Sun, Mar 23, 2014, at 7:00 PM
OK. When they shut down the rates will most likely go up more because of the loss of Noranda.
Lets also quit subsidizing people's income while we are at it. Make them work for a living like the rest of us because we will be short about $330 million in wages in SEMO and not have to funds to give them.
-- Posted by We Regret To Inform U on Sun, Mar 23, 2014, at 8:09 PM
Oh come on Regrets, every deadbeat is guaranteed free money, the Constitution says so, just ask a Left Winger, they will tell you it comes under Promoting the General Welfare.
-- Posted by Have_Wheels_Will_Travel on Sun, Mar 23, 2014, at 8:21 PM
Why should taxpayers subsidize a private for-profit company? Free-enterprise? I think not. -- Posted by joe05265 on Sun, Mar 23, 2014, at 7:00 PM
Spaniard - why should taxpayers subsidize a private not-for-profit company? Free enterprise? I think not.
Why are you concerned for only profit? Why should we subsidize private not-for-profits Spaniard?
-- Posted by not_sorry on Sun, Mar 23, 2014, at 8:43 PM
Why should we subsidize private citizens?
-- Posted by FreedomFadingFast on Sun, Mar 23, 2014, at 9:03 PM
-- Posted by We Regret To Inform U on Sun, Mar 23, 2014, at 6:13 PM
Regret: For those old enough to know what SEMO was like before Noranda came alone it's a no brainer to keep Noranda going. While I was working at Noranda, there were 3 aluminum plants in the USA that were shut down completely due to the high cost of electricity.(one each in TN, AL, and LA)
-- Posted by Truth Slinger on Sun, Mar 23, 2014, at 9:24 PM
...... The only reason Noranda is located in New Madrid is to get perpetual subsidies.
-- Posted by Nil on Sun, Mar 23, 2014, at 12:40 AM
I should have asked, what subsidies does Noranda get and from where.
I think Jay is pointing out that a rate decrease for Noranda dependent on a rate increase for other Ameren customers cannot be justified.
I'm happy to see folks making a good wage and spending it in the community but should I pay a higher electric bill to keep them employed?
-- Posted by Old John on Sun, Mar 23, 2014, at 11:40 PM
"For those old enough to know what SEMO was like before Noranda came along it's a no brainer to keep Noranda going. "
I remember.
Nil believes only New Madrid would be the town that would benefit but doesn't realize people from Kenett, Cauthersville, and many small towns work there. Noranda pulled generations of families out of poverty, sent kids to college, and helped produce good tax paying citizen. The money was spread all though the Bootheel and created other supporting jobs.
All this for about $2 a month on their bill. How much do we pay per month for Obamaphones that sure don't support tax paying folks.
-- Posted by We Regret To Inform U on Mon, Mar 24, 2014, at 7:25 AM
Regret: I over looked "Nil's" comments because like Nil there are lots of folks jealous because they couldn't get on down there. It's true that Noranda has downsized employee's but they still pump millions of dollars in the areas economy. Take the current Rod Mill expansion, more construction jobs and additional employees will be added.
-- Posted by Truth Slinger on Mon, Mar 24, 2014, at 8:26 AM
What about all of these entitlements some of this bunch out here receive for sitting on the couch and drinking beer all day laughing at the rest of us for going to work while we pay there way. I would rather support a company that offers high paying skilled labor jobs to the community then some of these welfare collectors that refuse to work but still fraud the tax payer every month and laugh at us. We are turning in to an entitlement Nation, that is what Obama wants.
-- Posted by swampeastmissouri on Mon, Mar 24, 2014, at 8:40 AM
If the federal government gave as much freebees to manufacturing companies as they do to "do nothing folks" the USA would have a surplus of manufacturing jobs.
-- Posted by Truth Slinger on Mon, Mar 24, 2014, at 8:50 AM
These guys are worried about a 1.8% increase when Obama's EPA is going to cost an 89% increase. His new rules go into effect next year. He warned you not to vote for him.
-- Posted by We Regret To Inform U on Mon, Mar 24, 2014, at 7:08 PM
Diseased turtle I am assuming your comment is directed towards me given that I created this thread.
I have been a private citizen for 15 months. Thanks for your interest in my thread.
-- Posted by J Purcell on Mon, Mar 24, 2014, at 7:09 PM
I'm old enough to remember. I can see how many agreed it was a good idea for SEMO to benefit from tax money collected from the whole state although I don't support the idea.
That is the ideology that got us into all the government programs of dependence.
Now comes the idea that a government regulated company should redistribute wealth by giving to a private industry at the expense of local consumers. I may be wrong but something just doesn't get by my gut feeling that it's wrong.
"I have been a private citizen for 15 months....."
-- Posted by J Purcell on Mon, Mar 24, 2014, at 7:09 PM
Any chance of changing that status?
-- Posted by Old John on Mon, Mar 24, 2014, at 10:58 PM
Diseased Turtle you seem to have all the answers why don't you run for an office throw your hat in the ring you might be able to pick up those famous words we all been told for the past six years "CHANGE WE CAN BELIEVE IN".
-- Posted by swampeastmissouri on Wed, Mar 26, 2014, at 7:36 AM
Does anyone wonder whether there is some sort of trifecta in Governor Nixon appointing a Republican Senator, Scott Rupp, to the Public Service Commission, removing a potential veto-override vote, just when Noranda and Ameren need to have their "needs met"?
Go to Opensecrets.org and scope out Jason Smith's donors...Noranda Intermediate Holding gave him over $5 K; Ameren gave him $5 K (and one of their lobbyists gave him $500, though that might not say much). Search also for a $10,000 donor, known as the Rely on Your Beliefs fund, whose honorary chairman is Senator Roy Blunt.
-- Posted by Givemeliberty on Wed, Mar 26, 2014, at 10:10 AM
-- Posted by Old John on Wed, Mar 26, 2014, at 10:37 AM
Go to Opensecrets.org and scope out Jason Smith's donors...Noranda Intermediate Holding gave him over $5 K; Ameren gave him $5 K-- Posted by Givemeliberty on Wed, Mar 26, 2014, at 10:10 AM
So Smith took money from both sides of this issue?
-- Posted by not_sorry on Wed, Mar 26, 2014, at 11:13 AM
I think the term "bailout" is used incorrectly in this discussion.
"bail·out noun \ˈbā-ˌlau̇t\
: the act of saving or rescuing something (such as a business) from money problems"
-- Posted by Shapley Hunter on Wed, Mar 26, 2014, at 12:25 PM
Shapley I would respectfully disagree that the term bailout is being misused pertaining to Noranda.
Even Noranda admits that they need a reduction in utility rates to stay productive they also go on to say they may have to lay off 150 to 200 workers or even shut down the plant if they do not receive this rate reduction they are requesting.
I agree that Noranda is an important part of Southeast Missouri economy and if it were to shut down it would hurt.
But after thinking about it I have boiled this issue down to one thought that has made me be against it.
Is it right for all of the residential customers utility rates to go up so that a for profit business can get cheaper utility rates. In my opinion NO!
-- Posted by J Purcell on Wed, Mar 26, 2014, at 3:19 PM
Noranda has been playing the gimmee, gimmee state and federal funds for employment stimulus and then ~wink~ hire new (rather than laid off) employees for a very short period of time.
I see nothing right about public monies being handed out to for-profit companies.
In Noranda's case, I could make a very good argument for fraudulently taking funds and debunking on the agreement.
-- Posted by survivalist on Wed, Mar 26, 2014, at 3:55 PM
Is it right for all of the residential customers utility rates to go up so that a for profit business can get cheaper utility rates. In my opinion NO!
-- Posted by J Purcell on Wed, Mar 26, 2014, at 3:19 PM
I do not know what I think for sure at this point, but if it were free enterprise, everybody would be paying the same rate with possibly volume discounts, because costs of production are not different depending on who is using the product.
So based on your question about fairness, I would like to ask.... is it fair and or reasonable for residential customers to receive cheaper rates than small commercial does?
-- Posted by Have_Wheels_Will_Travel on Wed, Mar 26, 2014, at 4:09 PM
"Is it right for all of the residential customers utility rates to go up so that a for profit business can get cheaper utility rates. In my opinion NO!"
Noranda was lured to the area on the premise that utility rates in the region were among the lowest anywhere. That was true at the time, when cheap Illinois coal could be shipped downriver by barge to the neighboring power plant.
The question is not whether other people's rates have to go up to lower theirs, but whether other people's rates should go up at a faster rate than theirs. As I understand it, they are not requesting a rate cut but rather opposing a reduction, so they are not seeking to be 'bailed out' so much as seeking not to have the cost of operations raised.
That everyone else's rates are going up is immaterial to the argument - rates have to go up to cover the rising cost of coal and the rising cost of compliance with government dictates regarding the burning thereof.
Noranda has the same right of any customer to petition for the best possible rate. That they have perhaps more clout due to the enormous amount of power they use gives them an advantage, but not an unfair one. Municipalities, businesses, and other groups likewise assemble and pool their demands on the understanding that there is strength in numbers. The Constitution even guarantees we citizens the right to do so. Noranda is using its leverage (high power consumption) just as you are using yours (mass media and public sentiment) to influence the decision of the regulatory authority.
I have no dog in this fight, and I see validity to both sides of the argument: given that rates will increase, through little or no fault of Noranda nor public at large, both sides are petitioning to see that they are not burdened too heavily with those increases. I merely argue that keeping their rates at the same rate is not a "bailout" in the common sense, even if it may be counted a "subsidy".
Whether it qualifies as a "subsidy" would depend upon whether it costs Ameren more to provide power to Noranda than they earn from them. I rather doubt that is the case, given that Ameren seemed so anxious to have them as a customer and seems anxious to keep them as such. Thus the only question would be, to me, whether the rate of Ameren's profits earned from Noranda is significantly lower than the rate earned from other customers, when all things are considered. Ameren admits that it costs less to provide power to Noranda (fewer transmission lines, fewer step-down transformers, etc., I suppose) than to residential and small commercial customers, so it seems fair and reasonable to give them a rate decrease in accordance therewith.
How much of a break is fair is the question to be answered. Tilting public favour by calling it a "bailout" at time when bailouts have fallen out of favour strikes me as wrong. You are free to petition for increased pubic support for your cause, I'm merely trying to keep in the proper context.
-- Posted by Shapley Hunter on Wed, Mar 26, 2014, at 4:18 PM
"is it fair and or reasonable for residential customers to receive cheaper rates than small commercial does?"
Just checked the rates, which I have not done for a while, but at the moment base charges are cheaper for residential but /KWhr charges are slightly less.
I can remember when this was reversed many years ago.
-- Posted by Have_Wheels_Will_Travel on Wed, Mar 26, 2014, at 4:22 PM
"...because costs of production are not different depending on who is using the product."
True, but costs of distribution are, and Ameren is in the distribution business as much as the production business.
One thing I learned when I was in municipal politics, the cost of utilities is heavily influenced by transportation costs. We purchased a lot of fuel when I was a selectman, and transportation costs sometimes exceeded the cost of the fuel itself. If you have to pay another provider or transporter for the use of their lines, the cost could get quite prohibitive. Electricity, while different, is also much the same.
-- Posted by Shapley Hunter on Wed, Mar 26, 2014, at 4:23 PM
Oops! I do see they are asking for a rate decrease, but they are asking for the decrease because they say Ameren is making more profit from them than allowed by the PSC.
-- Posted by Shapley Hunter on Wed, Mar 26, 2014, at 4:30 PM
That would seem to make it more of a "refund" than a "bailout".
-- Posted by Shapley Hunter on Wed, Mar 26, 2014, at 4:31 PM
"True, but costs of distribution are, and Ameren is in the distribution business as much as the production business."
True. I also see the benefits of giving such a user a break and the down side of letting all customers pick up the slack.
My guess if they were to close and idle 900 more workers, we all pay for that as well and our aluminum will wind up coming from China or some other country. The downside of which should need no explanation.
-- Posted by Have_Wheels_Will_Travel on Wed, Mar 26, 2014, at 4:36 PM
Wheels: While I was still with Noranda there were around 20 aluminum plants in the USA (if my memory is correct) after 3 plants were closed due to the high cost of energy. One of the bigger competitors back then was Russia.
-- Posted by Truth Slinger on Wed, Mar 26, 2014, at 8:41 PM
Russia and China have continued normal production of aluminum through the economic downturn and just now lowering production. The overall expectation is that market demand will increase.
Noranda claims that residential rates would go up even more if they were forced to close. I don't understand that.
-- Posted by Old John on Wed, Mar 26, 2014, at 8:47 PM
OJ
Noranda uses around the same amount of electricity as Springfield Mo. day in day out. Their transmission cost to Noranda uses much less infrastructure ie. poles, lines, meters, etc. and is within 1 mile of the plant.
The rates will go up because Noranda is supporting a large amount of their overhead which will have to be made up for.
-- Posted by We Regret To Inform U on Wed, Mar 26, 2014, at 10:42 PM
Regret, Now I'm more confused. Is all the electricity used by Noranda generated a mile away?
Ameren makes that claim of infrastructure costs but they have to spend on that and public relations due to court order.
-- Posted by Old John on Wed, Mar 26, 2014, at 11:05 PM
Ameren does not own the plant adjacent to Noranda, it is owned by Associated Electric Cooperative. It was built at about the same time as Noranda, and built generally to serve them. Noranda began buying power from Ameren in about 2005, I believe.
-- Posted by Shapley Hunter on Thu, Mar 27, 2014, at 7:10 AM
Apparently, Noranda has gotten there electricity from Ameren since 2005 and not from AEC. Ameren would probably supply Noranda thru the power grid with contracts maybe with AEC.
-- Posted by Truth Slinger on Thu, Mar 27, 2014, at 7:52 AM
"Apparently, Noranda has gotten there electricity from Ameren since 2005 and not from AEC. Ameren would probably supply Noranda thru the power grid with contracts maybe with AEC."
The power all goes into the grid, including AEC's and Noranda gets their power from there. You can't tell an AEC kilowatt from an Ameren kilowatt once they're in the grid. I'm not sure why they buy through Ameren, someone more knowledgeable than I would have to explain that. It does seem to me that they used to buy their power directly from AEC. I thought the City of New Madrid exercised some authority with regard to rates back then, though I could be mistaken (the City of New Madrid also bought power from AEC by contract, and I could be confusing the two). The City of New Madrid was instrumental in bringing both the AEC and Noranda plants to the area, even though they are located a few miles from the city limits thereof. I do recall that low utility rates was a chief factor in luring Noranda in, and the AEC plant was instrumental in securing those rates.
It's probable that the contracted rate agreement expired and Noranda was unable to negotiated a new, agreeable rate formula with AEC, probably due to increased environmental costs imposed on the aging plant at Marston, and thus Noranda went shopping for lower rates. Even so, it seems odd that they could obtain significantly lower rates from Ameren than from the plant next door, given the cost of transportation and maintaining infrastructure. Nor does it seem likely that Ameren could buy power from AEC and resell it to Noranda cheaper than Noranda could buy the power directly, but stranger things have happened.
-- Posted by Shapley Hunter on Thu, Mar 27, 2014, at 11:38 AM
I think I read somewhere that the AEC arrangement was not subject to PSC. Politics and profits other than those concerning Noranda at play, methinks.
-- Posted by Old John on Thu, Mar 27, 2014, at 11:57 AM
-- Posted by Old John on Tue, Jun 10, 2014, at 10:28 PM
They supposedly have about 900 employees making very good wages and benefits. I'm glad to see that. If my electric bill has to go up a few dollars a month to keep these people and their dependents going, so be it. We will pay one way or the other if the plant closes. If each employee has only one dependent we are talking about 1800 people. Many businesses could also be affected. Being the liberal I am, I say let's see what the actual costs would be to keep this plant nad it's employees thriving.
-- Posted by left turn on Wed, Jun 11, 2014, at 10:33 AM
Bring back Enron, they could probably sell electricity at a loss and make everyone lots of money. :)
-- Posted by Old John on Wed, Jun 11, 2014, at 10:44 AM
-- Posted by left turn on Wed, Jun 11, 2014, at 10:33 AM
Left: I don't believe it, first time we agreed on something. By The Way, I 'm a retiree from Noranda and understand what there impact is for SEMO.
-- Posted by Truth Slinger on Wed, Jun 11, 2014, at 12:23 PM
semo, I'm all for Noranda, just doesn't seem right for everyone to pay higher rates so they can get lower rates. Too much like wealth redistribution which we already have enough of.
Ameren and Noranda should surely be able to work this out a better way.
-- Posted by Old John on Wed, Jun 11, 2014, at 2:17 PM
Noranda brought up a good point ... Ameren made millions more than they should have; which means they not only charged Noranda, their (10% customer); they also charged the other 90% of us peons too much also.
The PSC needs to do the job they are supposed to do... protect consumers from utility monopoly imposed price increases.
Not a fan of all the taxpayer subsidizing Noranda has begotten. A few years back, they received $10,000 per 900 employees in federal and state grants. To borrow a quote from 'The Price is Right'... "THAT'S TOO MUCH !!!"
-- Posted by Otoe on Wed, Jun 11, 2014, at 3:40 PM
Interesting comments by the PSC staff during the last Ameren rate case ER-2012-0166 towards supporting the rate design proposed by the staff -
"While reducing over-collection from customer classes with negative revenue shift percentages (revenues greater than cost to serve) for Ameren Missouri customer classes on the SGS (Small General Service), LGS/SPS (Large General Service / Small Primary Service), LPS (Large Primary Service), and LTS (Large Transmission Service) rate schedules all the way to zero is appealing, the bill impact on the customer classes with positive revenue shift percentages must be considered. For Ameren Missouri, these are the Res (Residential) and Lighting rate classes."
"For example, based on Table 2, on a revenue-neutral basis, the Residential customer class is providing 6.81% less revenue to Ameren Missouri than Ameren Missouri's cost to serve that class. Also, the Large General Service/Small Primary Service customer class is providing 7.28% more revenue to Ameren Missouri than Ameren Missouri's cost to serve that class."
The challenge is the closing of the loop between the rate increases that the staff recommended in their report linked above, and the rate increases the Commission actually imposed...
-- Posted by fxpwt on Wed, Jun 11, 2014, at 6:24 PM
Jay: Explain what we will do with a 95 million annual payroll gone out of our economy around here you should know that how is that going to be replaced and furthermore Noranda offers good skilled paying jobs and none of this low end unskilled labor jobs like we see so much of in this area. Your wrong on this one Purcell. Ameren is the one that needs to stop going around with the hand out all the time begging for more money maybe they need to look at the high dollar salaries they are paying their executives and all of the high dollar trips they make. Ameren for the past five years have had more rate increases which they directed at the consumer and the industrial market they are always asking for more before the PSC. I support Noranda and hope they win this one so good paying jobs are saved which not many good paying jobs are around here Jay.
-- Posted by swampeastmissouri on Wed, Jun 11, 2014, at 6:30 PM
Explain what we will do with a 95 million annual payroll
Swamp, Did you pluck that number out of your thumb? Citation.
-- Posted by CSIP2016 on Wed, Jun 11, 2014, at 6:35 PM
-- Posted by fxpwt on Wed, Jun 11, 2014, at 6:56 PM
I remember the local grocer facing competition from the new big chain store. His sales were declining and next his cost of bread, milk and other short shelf life items were raised to the convenience store rate. I understand volume discount in the private sector, but in a government regulated monopoly it doesn't seem fair to me that people with lessor jobs should have to pay more to support those with better jobs.
And those charts saying residential customers cost more than they bring in.. charts are right up there with figures.
-- Posted by Old John on Wed, Jun 11, 2014, at 8:52 PM
Not only the $95 million payroll is at stake, look at all the items bought locally that is needed to keep the plant running....from lumber to brooms and on and on.
-- Posted by Truth Slinger on Wed, Jun 11, 2014, at 9:01 PM
maelstrom for your information it is a matter of public record if you would stay up on this you would know it. Noranda is a publicly traded company. Before you contradict another persons comment make sure you have your facts together partner.
-- Posted by swampeastmissouri on Thu, Jun 12, 2014, at 7:26 AM
If the decision is made in favor of Noranda doesn't that also mean that all of Ameren's customers were charged too much and are entitled to a cut?
-- Posted by Truth Slinger on Mon, Jun 16, 2014, at 8:37 AM
Menu
Please visit this site to learn about the proposed Noranda Bailout which will increase all of our utility cost. If you are opposed to this bailout please sign the petition as I did. Here is the link http://moenergyfuture.org/stop-norandas-bailout/
Replies (57)