homepage logo

Ormet To Close

By Staff | Oct 9, 2013

Needless to say, many Wetzel County residents were shocked Friday afternoon to hear the news that Ormet was shutting down, a turn of events that will cost about 750 workers their jobs in addition to the 250 who were already laid off.

After the news was posted on The Wetzel Chronicle’s Facebook page, several local residents expressed their sadness and disappointed that the plant was tapping its final two lines down over the upcoming weekend.

“This is horrible news!” one poster commented, while another described the news as “heartbreaking.” Two individuals even stated that the news made them “sick,” while others offered hope by simply stating that they were praying.

Local politicians express similar disappointment to the news: “I think it’s a real shame that this plant had to shut down and something could not have been worked out,” Wetzel County Commission President Don Mason stated at the commissioner’s weekly meeting Tuesday. Commission Vice President Bob Gorby, a retiree from Ormet with 33 years of service, commented to The Wheeling Intelligencer Friday at Magnolia’s football game that Ormet’s shutdown would have a terrible trickle-down effect for the whole area. Gorby did state that the manner in which Ormet is shuttering would allow the plant to re-fire fairly easy if someone were to step forward to run it. He added, “All you can do is hope now.”

Despite stating that they were approving Ormet’s application for a unique arrangement Oct. 2, the Public Utilities Commission of Ohio made modifications to the aluminum corporation’s application. PUCO did grant Ormet a discount on electricity rates, but instead of granting the $45.89 per megawatt that Ormet requested, PUCO ruled that Ormet’s monthly billed rate should not exceed a fixed generation and fuel rate cap of $50 per megawatt hour, beginning with the company’s October 2013 bill through 2014.

In June 2013, Ormet filed the application to amend the 2009 unique arrangement with AEP-Ohio and a request for emergency relief. In the application, Ormet emphasized that the requested relief is necessary to enable them to emerge from a recent bankruptcy sale and to continue its operations.

PUCO approved the acceleration of the remaining maximum discount available to Ormet under their current unique arrangement with PUCO. The origin of the unique arrangement begins in 2009 when PUCO approved $308 million in electricity discounts. These discounts were to last from 2009-2018, on a sliding scale. However, PUCO denied Ormet’s proposal to extend its 2012 deferral repayment schedule; denied the request for an additional $4.5 million discount the first five months of 2015; and denied Ormet’s request to transition to retail choice. Thus, the company had to honor its current contract with AEP-Ohio through December 2018.

On Friday, Ormet’s President and Chief Executive Officer Mike Tanchuk blasted the Public Utilities Commission of Ohio for not further reducing Ormet’s electric bills as he announced the company would cease all operations. “The chairman and one of the commissioners went out of their way to insult Ormet’s efforts to reduce costs,” he said, expressing frustration with the Oct. 2 comments made by PUCO Chairman Todd Snitchler and Commissioner Steven Lesser. Especially scathing were those remarks made by Commissioner Lessler at the meeting: “I sign today’s order not because of any confidence in Ormet’s management, but because of the potential devastating impact of the region’s largest employer closing.”

Despite the scolding remarks, PUCO Chairmen Todd A. Snitchler had stated that the commissioner’s commitment to taking every reasonable effort to support the company would continue. However, when asked about Ormet’s shutdown, PUCO spokesperson Jason Gilham stated that PUCO could only speak to what’s in front of them. “We can only speak to what’s in front of us,” Gilham stated. “There’s nothing pending in front of us for us to comment on.”

Gilham noted, “The only thing I think you need to understand is that it is subject to a re-hearing. There’s always that possibility as well, if any intervener files for a re-hearing.”

When granting Ormet a discounted rate on Oct. 2, the commission said it recognized Ormet’s economic importance to the region, but wanted to balance those interests with the concerns of local ratepayers, who would be subsidizing part of Ormet’s power costs with increases to their own bills. However, with Ormet in the process of shutting down, many question if ratepayers will still see an increase to their bills, to make up for the loss of AEP’s largest customer. On Monday, American Electric Power officials expressed disappointment that Ormet will close, but stated they are not yet sure if they will seek to raise rates on other Ohio consumers.

The wife of a 32-year Ormet employee, Judy Mason had stated to The Intelligencer, also at Magnolia’s football game, that although she does not place all the blame with AEP, she said the electricity provider could be part of the problem. Citing that the company earned $338 million from April through June, she stated “It is difficult to see how much AEP is making at the same time others are suffering.”

“This is just terrible for everyone,” Mason had stated. “Emotions are running high.”

Ohio State Representative Jack Cera, along with Ohio Senator Lou Gentile, criticized Ohio Governor John Kasich for his lack of regard to the Ormet situation.

“For nearly a year I have expressed to the Kasich Administration the importance of these jobs and the devastating impact it would have if they did not provide Ormet with a reasonable power agreement. Now, their actions have jeopardized nearly a thousand jobs,” Cera said in a statement given to the Chronicle.

“The workers and retirees at Ormet have made significant concessions in wages and benefits to put this company in a position to be successful. They did their part and the Kasich Administration failed to uphold their end of the deal,” Lou Gentile also remarked in the statement. “The workers, families, and communities in the Ohio Valley deserve better.

Although, as reported by The Associated Press, Kasich is currently in Europe for his wife’s birthday, his press secretary Rob Nichols reported to The Intelligencer that the Kasich administration sent about 10 people to Monroe County on Monday to meet with local officials and Ormet employees. He said officials are determined to help eastern Ohio cope with the loss of Ormet as much as they can. “This is the start of a process that will continue because the governor is committed to continuing to work with Monroe County to find the right solution moving forward,” Nichols said.

Nichols said the administration also offered advice and support Monday to those at the Ohio Department of Job & Family Services One Stop center in Woodsfield.

Nichols was further reported as questioning why West Virginia has not offered any financial support for the company. “(Ohio) has approved more than $300 million in assistance for Ormet. That is $300 million more than any other state has provided to them,” Nichols said.

However, many can wonder about the administration’s interest in the detrimental cost the shutdown of Ormet will be on eastern Ohio, especially the Switzerland of Ohio School District.

At a rally held for Ormet on Aug. 17, Lance Erlwein, Switzerland of Ohio School District treasurer, said Ormet’s closure would mean a direct loss of $110,000 in property tax revenue given to the school. “As Ormet goes, so goes the community,” Erlwein had stated.

Cera also referenced in his most recent statement that the shutdown of Ormet would “jeopardize” the future of the Switzerland of Ohio School District as well as “the stability of local governments that rely upon Ormet’s tax base.”

“Everyone is concerned about the impact this will have on the economy in Eastern Ohio,” Gentile added in his statement.

Cera and Gentile agreed that they remained committed to the workers and families “who depend upon these jobs.”

Representative Bill Johnson of Ohio said he was “deeply disappointed” to learn that Ormet would shutter operations next week. “Ormet has a strong, viable plan to produce its own energy from the natural gas production that we are seeing in eastern and southeastern Ohio-if only they had the support to get to that point,” Johnson said.

Editor’s Note: We contacted Senator Joe Manchin’s office for a comment related to this story. A representative said Manchin was distressed by the news of Ormet’s shutdown, and we would receive a statement. Unfortunately, as of press-time, a statement had not been received.