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PUCO Ruling On Ormet Request Expected

October 2, 2013
BY LAUREN MATTHEWS - Staff Writer (reporter@wetzelchronicle.com) , Wetzel Chronicle

The five members of the Public Utilities Commission of Ohio are expected to decide today whether Ormet Corporation will receive approval on a package of requests they have submitted concerning electricity rates paid at its Hannibal plant. Ormet's company officials have indicated that the approval of these requests is essential to continue operations at the plant.

As many as 600 jobs also hang in the balance, as Ormet has already reduced operations to two of its six potlines to reduce power costs in order to keep running. The company also has the option to shut down completely by the end of the year, according to a Worker Adjustment and Retraining Notification Act notice.

Besides speaking out at a really held in support of Ormet on Aug. 17, several area politicians and stakeholders have since spoken out in the plant's favor through comments submitted to PUCO. Just today, a resolution passed by the Township Trustees of Mead (Belmont County, Ohio) in support of Ormet, was processed and entered into the online "Case Documents" of Ormet's case. Ormet's case and case documents can be referenced on PUCO's website, www.puco.ohio.gov. The resolution included approximately 230 pages of signatures in support of keeping Ormet alive.

Article Photos

Supporters attend a rally for Ormet earlier this year.

Also, Ohio State Senator Lou Gentile, in a letter to PUCO dated Sept. 5, referenced the rally, stating "the future of 1,000 workers, their families and the entire region is at stake." He added: "Eastern Ohio has faced many economic challenges; our steel industry has been all but decimated and the recent recession forced plant closures throughout the Ohio Valley. If the state of Ohio is unable to retain the 1,000 jobs at this plan,t the impact to the workers, their families, the local school district and the entire regional economy will be devastating."

Gentile said the price of power under the Unique Arrangement is the gating issue that prevents Ormet from coming out of bankruptcy. "Ormet has developed a sound business plan that includes construction of an onsite gas fired electric generating facility that will meet its future energy needs, but economic development assistance is required to now bridge the gap," Gentile added. "Providing this manufacturing emergency relief is critical in the short term so they are able to enact their long-range business plan. Furthermore, in the event that Ormet were to liquidate, because it is such a large user of power, the loss of Ormet could have the effect of raising power costs to the remaining ratepayers."

Later in his letter, Gentile adds: "I trust that the PUCO commissioners share the same feelings as I do when it comes to protecting manufacturing jobs in our state."

Wetzel County Commissioners also submitted a letter to PUCO, dated Sept. 3. In the correspondence, the commission mentions the fact that 40 percent of Ormet's employees come from West Virginia. "The financial loss to the area would be devastating if Ormet would close. It is estimated the loss of jobs and wages would be nearly $50 million," stated the letter, which is signed by President Don Mason, Vice President Bob Gorby, and Commissioner Larry Lemon.

Ormet's trial brief, submitted to PUCO and also found on their page, also references the possible economic loss contributed to the plant's shut-down: "To evaluate the full impact of the Hannibal facility on the region, Ormet retained Dr. Paul Coomes, an economist and professor emeritus at the University of Kentucky." The brief states that Coomes testified that the total net annual impact in the region of the closure of the Ormet plant would be a loss of 3,117 jobs and $238 million in total employee compensation, with state and local governments in Ohio to lose about $9 million annually in tax revenues.

Furthermore, the brief states that Coomes indicated that the purchase of electricity, which constitutes 35 percent of Ormet's expenditures, to be an important factor to consider. Coomes testified that if Ormet builds a power plant, not only will the newly hired direct employees of the plant benefit the area, but "the regional economy will have the extra benefit, caused by the multiplier effect." Coomes testified that "the overall estimate of $250 million dollars a year of economic impact from Ormet on the regional economy would probably have to be increased."

Related to this matter is a case document on PUCO's page that references some of Ormet's plans for its power plant, which is hoped to generate electricity by late 2015. Although the plant is still in planning stages, Ormet appears to be hopeful to create an average of 300 construction jobs for the creation of the plant, peaking to perhaps 600. Furthermore, Ormet hopes to create "28 full-time family-wage power plant jobs."

As for Ormet, with the approval of its requests, it hopes to eventually reestablish operation of all six pot lines. With full operation, the facility employs over 1,000 full-time workers.

The PUCO meeting is set for 1:30 p.m. today at the commission office located at 180 E. Broad St. in Columbus, Ohio. Commission spokesman Jason Gilham reported to The Intelligencer this week that members of the commission have worked to expedite the process so that it could be on today's agenda.

Commissioners Todd Snitchler, Steven Lesser, Lynn Slaby, M. Beth Rombold, and Asim Z. Haque will decide the matter.

 
 
 

 

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