Hopes, Suspicions Raised By Smelter Restart Talk In Wenatchee
Public utility commissioners in Chelan County, Washington, take a high stakes vote Monday that could influence whether the aluminum industry and its well-paid, blue collar jobs make a comeback in the Pacific Northwest.
Aluminum smelting used to be a pillar of the region's industrial economy, but today there is only one smelter left in operation in the Northwest -- Alcoa Corporation’s Intalco Works in Ferndale, Washington. Alcoa also owns a second smelter outside Wenatchee, but it was idled at the beginning of last year, putting more than 400 people out of work.
Eric Gladsjo was one of those workers.
"I would be one of the first people back through the gate if they did open back up,” he said. “I would much rather go back to the wages I was making at Alcoa and all the overtime that I was getting."
Gladsjo now drives a truck for a propane company and said he earns about the same as the unemployment checks from his former Alcoa job.
John Gill would also like to return to the Wenatchee smelter. He's 62-years-old and currently drawing supplemental unemployment.
"Yeah, it'd be good for the community if we went back to work,” Gill said.
Gill and Gladsjo were among two dozen aluminum workers who came to a community meeting earlier this week. It got emotional at times. Alcoa is dangling the possibility of reopening the smelter if aluminum prices rally further.
But there’s one other thing -- a big looming charge Alcoa may have to pay soon to the local public utility. The penalty of sorts comes from Alcoa’s long term power contract with Chelan County PUD.
"The clause in the contract was there to try to incent restart,” Chelan County PUD. General Manager Steve Wright said. “So if they stayed closed for 18 months, they'd have to pay us the now $67 million. The idea was, well let's try to make it hard for them and encourage them to restart the plant if they closed it."
Alcoa Vice President for Energy Michael Padgett told the community meeting if Alcoa is forced to pay that $67 million now, it would be unlikely to reopen the plant. The money it might sink into its Wenatchee smelter to restart would be gone.
Padgett said things are looking up for the company so it would like to buy time, but he made no commitments about reopening the local plant.
"There are a number of factors that go into it,” he said. “You know, the metal price (is an) important factor. But we also look at the cost structure of the plant. We look at the amount of money it would take to do the restart. We look at the other capital investments and the regulatory environment. And all of those things come together."
Labor availability is also relevant.
At the community meeting there was some suspicion from former Alcoans and spouses about whether the aluminum maker is really serious about restarting its aging smelter outside Wenatchee. Or maybe it's just stringing the community along to delay a costly bill.
The situation leaves local aluminum workers’ union president Kelley Woodard feeling torn.
"Part of me says my people have been dangling out here for a little over a year now. They're blowing in the wind. They’d just like a call to know what is going to happen,” Woodward said. “But on the other hand, if it is truly that another year would give us a better chance to restart, I say well maybe we should do it and give 'em another year."
Now that same dilemma falls in the lap of the Chelan County Public Utility District Commission. They have before them a staff recommendation to restructure the power contract. This proposal would give Alcoa a one-year deferral on that big penalty for the price of $7 million. If the smelter is still not operating by the middle of next year, then the global aluminum maker has to pay up to the tune of $62 million.
"We feel it has an overall positive benefit for the community," Chelan PUD Chief Financial Officer Kelly Boyd said of the staff recommendation.
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