JEFFERSON CITY - A bill to assist Noranda Aluminum has passed the Senate and is under consideration in the Missouri House of Representatives.
The bill, which received the Senate approval Friday, would allow the state's only aluminum reduction plant to purchase power directly from energy producers. The bill, which passed the Senate on a unanimous vote, was sponsored by State Senate Pro Tem Peter Kinder of Cape Girardeau with the assistance of Sen. Bill Foster of Poplar Bluff.
In presenting the bill, Kinder noted Noranda needed flexibility to purchase power because it is by far the single largest user of electricity in the state of Missouri and energy costs account for over one third of Noranda's total operating costs. Kinder said Noranda's continuous use of 470 megawatts of power in the aluminum reduction process is more than four times the amount of electricity used by the next largest energy user in the state.
Although the bill as written will not necessarily result in low cost power rates required for the aluminum reduction process, the flexibility gained from this bill will improve the opportunity to purchase affordable power in the future, according to Noranda officials.
"We are pleased that the Missouri Senate approved the proposed legislation," said Noranda President Steve Heddle. "The Senate and Missouri House bills would take a lot of confusion out of purchasing electricity. Having that flexibility will allow us to at least have more options to purchase the lowers costs energy available and maintain profitable operations into the future."
Heddle pointed out aluminum plants, such as Noranda, require huge amounts of power to produce their products. "We use the power equivalent of about 470,000 residential homes, so being able to purchase this quantity of power without the requirement of a middleman will improve our flexibility to buy at the lowest cost," he said. "There are no guarantees in the energy markets going forward but we will at least have a fighting chance if (this bill is) approved by both chambers."
State representatives Lanie Black and Peter Myers are co-sponsoring the House-version of the bill. A House committee is expected to hear testimony to support the bill within the next week. If voted out of committee, the bill would go to the Missouri House of Representatives for a vote.
If approved by both chambers of the Missouri Legislature, the bill would be sent to Gov. Bob Holden for approval.
Noranda's power contract with Associated Electric ends May 31.
Noranda Aluminum employs about 1,100 people at its New Madrid facility. The company produces primary aluminum products which are sold throughout the United States and Mexico. In 2003, the company expects to produce some 547 million pounds of aluminum.