Judge Says Alcan Can Sell Power Without Making Aluminum

Mr. Justice Brenner has ruled  Alcan cannot be restricted to using power for the smelting of aluminum.

Mr. Justice Brenner decided that neither BC's Industrial Development Act nor the original 1950 power sales agreement between Alcan and the Province of B.C.,  restrict Alcan in the decisions it chooses to make with respect to its production of either electricity, or aluminum.  In his ruling,  he said "Alcan is not restricted by either instrument from selling its Kemano power or using it for the Kitimat smelter as it considers appropriate. "

Experts  say the ruling means Alcan could simply shut down the smelter in Kitimat, continue producing power  at a cost of $50 million dollars a year,  and sell that Kemano power  for about $500 million a year.

The Court's decision  will  play a major  part in  whatever Alcan decides to do.
 
Meantime, Alcan says it is pleased with the decision which  dismisses the District of Kitimat's petition. The judgment concludes that there are no restrictions in the legislation, on the company's use or sale of Kemano power .

Michel Jacques, President and CEO of Alcan Primary Metal Group, says "We must still meet the conditions required for final approval of the US $1.8 billion dollar project." That is the cost of a new smelter for Kitimat if  the proposed deal with  BC Hydro  would have proceeded. 

Under that agreement, Alcan would be selling hydro to the grid at just under 78 dollars a MWH .The BC Utilities Commission said  the company needs about $10 dollars per MWH to produce the power and the mark up was too high.

Alcan is currently  appealing the BCUC  decision.

Alcan has said  a new smelter  must be tied  to a new hydro contract with BC Hydro.  Under that contract, Alcan would receive susbstantially more money for  its power.  The Court decision,  coupled with the BCUC  ruling,  now opens the door for Alcan to  consider selling power only,  without having to  build a new smelter.
 
Economic Development Minister Colin Hansen applauds the decision saying  he is optimistic  the ruling will allow Alcan to put back on track its plans to build a new smelter.

The District of Kitimat had sought the Court's support to compel the government to force Alcan to use its power for the development of industry "within the vicinity of the works."

Mayor Richard Wozney and Members of the Kitimat Council say they are disappointed with the ruling.

Mayor Wozney says," We have been fighting to protect our community and one of the largest water resources in BC for a number of years now, standing in where the Provincial government should be."  He asks,  “Why are we giving away our resources to Multi Nationals?"  

Mayor Wozney  says  Alcan is now free to close even more aluminum smelting capacity and sell power from the Kemano station. "Under the Industrial Development Act, Alcan got the rights to vast tracts of  public land and watersheds of the Nechako and Kemano systems, and Alcan does not have any obligation to use those public resources for industry and jobs." 
Wozney says the 500  jobs already lost  have  left Kitimat  with the highest percentage population  drop in Canada.