Two Kentucky electric cooperatives are teaming up on a deal that will save hundreds of jobs at an aluminum smelter they serve.
Century Aluminum of Kentucky will now be supplied with electricity procured on the open market by Big Rivers Electric Corp. and distributed by Kenergy Corp. Both the G&T and the distribution co-op are based in Henderson.
“Many of the employees at the Hawesville smelter are Kenergy members,” said Greg Starheim, president and CEO of the co-op. “There are also a lot of spinoff jobs associated with the plant’s operations, so this was a major economic development project for us.”
A series of agreements announced by the Kentucky Public Service Commission staved off a crisis, which could have led to closure of the smelter, eliminating 700 jobs.
“The agreements are designed to produce Century Kentucky an opportunity to continue operating the Hawesville smelter,” wrote members of the PSC in an order released Aug. 14.
Three distribution cooperatives that own the G&T sought intervention with state regulators. The agreements with Kenergy are designed to reduce overall energy costs for the smelter. Jackson Purchase Energy Corp., based in Paducah, and Meade County Rural Electric Cooperative Corp., headquartered in Brandenburg, are co-owners of the G&T with Kenergy.
Big Rivers will now transmit power secured by Kenergy on the open market to the Hawesville smelter, which produces about 252,000 metric tons of aluminum per year.
“The agreements achieve a delicate balance between keeping the Hawesville smelter viable and not imposing costs on the remaining Big Rivers customers beyond those that would occur if the smelter closed,” wrote regulators in the order.
The Hawesville plant is one of two aluminum smelting facilities operated by Century’s parent company in Kenergy’s service territory. Big Rivers’ service contract with the plant at Sebree expires in January and the company is seeking a similar arrangement with Kenergy, which could keep the facility operating.
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