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Noranda bill heads to governor's desk

Thursday, May 15, 2003

Proposal gives flexibility in purchase of power

JEFFERSON CITY -- The bill that would let Noranda Aluminum Inc. negotiate for power contracts not under the Missouri Public Service Commission's control is on its way to the governor.

The revised measure cleared both chambers without opposition -- 32-0 in the Senate and 129-0 in the House of Representatives. It is sponsored by Senate President Pro Tem Peter Kinder, R-Cape Girardeau, and state Rep. Lanie Black, R-Charleston.

After its passage last Friday in the House, the Noranda bill was sent to conference committee. Here a compromise was forged over the sale of excess power by the aluminum smelting plant, located near Marston.

The bill passed by the House stated that Noranda could not sell back more than 35 percent of the power they would buy. This provision had no restrictions on whether or not the company could make a profit from this money.

Opponents of that section worried Noranda could purchase more power than it needed at low cost and then sell it in competition with utilities subject to PSC regulation.

Those concerns resulted in a previous House vote of 88-53. That tally was sufficient for passage but 21 votes short of the 109 needed to enact an emergency clause allowing the bill to become law immediately upon receiving the governor's signature

Black, the bill's House handler, fought adamantly last week to keep the provision in the measure but agreed to its removal during negotiations with the Senate.

"We ran into a dose of reality, which was we couldn't get the emergency clause as long as we had that section," said Black.

Because Noranda's current power contract expires at the end of the month, Black said the company was willing to drop its demands for open market resale. Without the emergency clause, which both chambers ultimately approved, the measure couldn't become law until Aug. 28.

As a result of the compromise in the conference committee, Noranda can now sell their power back to only the original provider(s) of the electricity. Those opposed to power sales noted it should keep Noranda from shutting down the plant then selling off the excess electricity for a profit to other companies, similar to what aluminum smelting plants in California and the Northwest have done.

Some in the conference were still disappointed that there was not a "sunset clause" place upon the legislation. A sunset clause would have essentially allowed the provisions of this bill to fade away after a designated amount of time. In this case many were calling for a sunset on this legislation after five or six years, allowing Noranda plenty of time to contract for new power sources.

Without a sunset on this legislation, Noranda could continue to contract for power outside of the Missouri Public Service Commission's regulation for the life of the plant.

Jack Cardetti, a spokesman for Gov. Bob Holden, said the bill will undergo a customary review but that the governor would act expeditiously.

"The governor realizes the importance of this legislation to Southeast Missouri," Cardetti said.

The Noranda bill is SB 555

Marc Powers of the Southeast Missouri News Service also contributed to this article.