Noranda, Ameren remain at odds over electric rates

NEW MADRID, Mo. -- A proposal by Ameren Missouri on the rates it wants to charge its largest customer, Noranda Aluminum, needs more work, Noranda officials say.

During a recent hearing before the Public Service Commission, Matt Michels, Ameren's senior manager of corporate analysis, reportedly proposed Noranda a lower wholesale rate based on market pricing, as an unregulated customer, in a five-year contract. At the end of the five-year term, Ameren then would have the ability to sell the energy Noranda was using on the open market.

While welcoming Ameren's actions to stabilize rates for the aluminum smelter, John Parker, vice president of communications and investor relations for Noranda, said the testimony "falls quite short of a workable proposal."

"To our knowledge, no testimony or proposals have been filed with the PSC that define a rate structure for this 'market-based pricing,'" he added, declining to comment more on the proposal.

On Oct. 1, the commission denied Noranda's petition seeking a reduced rate for the smelter, saying the company had failed to meet the burden of proving its rates are not just and reasonable.

At that time, PSC chairman Robert Kenney urged Noranda and Ameren to present their proposals during hearings on Ameren's request to raise rates on all of its customers.

The New Madrid smelter plant employees about 900 people and says it produces 14 percent of the nation's aluminum.