Rio Tinto Alcan and Century Aluminum have said that they will start buying 50-megawatt and 63-megawatt firm blocks of power respectively, from Kenergy from July 1 to serve their aluminum smelters in western Kentucky after the Kentucky Public Service Commission approved amended agreements on Friday.
Kenergy, an electric distribution cooperative, will purchase the power from Big Rivers Electric, a Henderson, Kentucky-based generation and transmission co-op.
The power will be delivered by Kenergy to Rio Tinto Alcan's 180,000mt/py smelter at Sebree and Century's 244,000mt/py smelter at Hawesville during on-peak hours on Saturdays, Sundays and North American Electric Reliability Corporation holidays over a 10-week period from July 1 through September 9,2008. Prices under the special contracts were not disclosed.
Late last year, both aluminum companies moved to ensure the long-term viability of the Sebree and Hawesville smelters by entering into new long-term supply agreements with Big Rivers.
The smelter deals are part of an ongoing effort by Big Rivers to regain operational control of its 1,740-megawatt coal-fired generating system in Western Kentucky by terminating a 25-year lease arrangement signed in 1998 with E.ON US, formerly LG&E Energy. The PSC is reviewing Big Rivers' request
to 'unwind' the lease.
If the PSC approves the complex accord, Big Rivers would be in a position to supply the approximately 850-megawatt combined loads of the two smelters when their existing long-term power deals expire in 2011. The Big Rivers/smelter agreements would run through 2023.
Source: Platts, by BOB MATYI, newsdesk@platts.com
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