Bootheel officials urge electricity rate cut at Noranda facility

Elected officials from Stoddard, New Madrid, Dunklin, Pemiscot and Butler counties in Southeast Missouri have banded together to support an electricity rate reduction the New Madrid-based Noranda Aluminum plant has requested from Ameren Missouri.

A letter to the Missouri Public Service Commission in Jefferson City, Missouri, signed by nearly every elected official in the five counties was forwarded to The Daily Statesman on Tuesday

morning.

The letter, dated Monday, is a plea from the officials -- including Stoddard County's sheriff, prosecuting attorney, all three commissioners, recorder of deeds, circuit clerk, public administrator, the assessor and the treasurer/collector -- for the commission to "consider the citizens of our counties and the drastic effect your decision will have on each and every one of their lives" if the panel decides not to grant a rate reduction requested by Noranda.

The battle between Noranda and Ameren ensued in February when Noranda Aluminum Holding Corp. accused Ameren of overcharging customers and filed two requests with the Public Service Commission.

One of those requests accused Ameren of charging customers more than what is allowed by the commission. The other request asked for a reduced rate to buy electricity from Ameren Missouri.

A report from the St. Louis Business Journal states if the rate request was granted to Noranda, it would represent a savings of about $580 million over the next 10 years. Noranda is asking to pay $30 per megawatt hour -- $11.44 less per hour than what is charged. A Noranda spokesperson said in March that Noranda's rate is the second-highest of the nine smelters in the U.S.

While Noranda seeks a reduction, Ameren is talking of a rate increase by year's end, though the amount has not been announced. Ameren has reportedly invested more than $1 billion in upgrading its system by the end of 2014 and says it will need higher rates to pay for it.

Noranda officials said in February a rate cut for its smelter is key to preserving jobs at the New Madrid plant that employees about 900 people, many of whom are from Stoddard County.

On May 9, the Public Service Commission recommended against Noranda's proposed reduction, saying the proposed rate would not cover Ameren Missouri's costs. Noranda consumes about the same amount of power as Springfield, Missouri, or 10 percent of all power Ameren produces, according to a May report in the St. Louis Post-Dispatch.

If a rate reduction materializes, Noranda has suggested an increase of 1.8 percent for Ameren customers to compensate.

While reports earlier this year from Noranda said it could reduce staff by up to 200 employees, the implication in the letter from the elected officials is the New Madrid plant will be shut down without the reduction.

In Monday's letter to the commission, the elected officials state: "We write you today as a collective group to express our extreme concern for the economic well-being of our communities should the unthinkable event of the closure of Noranda Aluminum occur due to increased electric rated charged by Ameren Missouri."

The letter also states Noranda could not survive an increase of $44 million over six years for a single overhead item such as electricity and to "consider the disastrous effects to our region that the closure of Noranda will cause in your deliberations."

The letter cites "irreparable cascading damage" to several business sectors in Southeast Missouri that rely on the plant, along with "crushing numbers of defaults and home foreclosures" in the banking industry, if Noranda ceased operations in New Madrid.

The letter concludes, "To preserve our regional economy and way of life, we respectfully request that you grant Noranda Aluminum their requested rate reduction."