CHARLESTON, WV -
Byron Harris, the consumer advocate at the Public Service Commission, has come up with another plan in Century Aluminum rate case, one he says would not shift the burden of the Ravenswood plant's power costs onto other ratepayers.
Harris noted a motion on behalf of the Consumer Advocate Division, filed with the PSC Aug. 20, that on the final day of the evidentiary hearings, Appalachian Power's Steve Ferguson was asked to prepare a summary of any kind of proposal or counter proposal Appalachian Power could present that the power company believes would be fair and reasonable while still considering Century's position.
Harris wanted to leave his own final thoughts after examining all the evidence brought to light during the hearings. Initial briefs in the case are due Aug 21, and reply briefs are due Aug. 28.
The motion the Consumer Advocate Division filed starts with explaining Harris's motivation, which stemmed from the testimony of Century retiree spokeswoman Karen Gorrell, who provided testimony at the end of the PSC's evidentiary hearings.
"Ms. Gorrell's statement accurately summarize the dilemma faced by the Commission in this proceeding and provided the Commission with an invaluable ‘reality check,'" Harris's motion reads. "The CAD believes that the essential elements of Ms. Gorrell's statement can serve as a guide for the Commission to fashion a proposal that will allow Century to re-open without inflicting additional harm to other ratepayers."
During her comments, Gorrell said the retirees did not want to be stuck in the middle of the rate hearing issue.
"We need our benefits, but we're good, moral people, and we need this to be fair for all," Gorrell said at the time.
The newest motion from the CAD states that if the PSC decides that a special rate mechanism is "appropriate," for Century, then the PSC should adopt a "do no additional harm" standard.
"The Commission should limit any additional subsidy to Century to the amount that is currently embedded in base rates - $17.3 million," the motion states. "Even though embedding this subsidy would be unprecedented for the Commission, it would at least not increase rates to other ratepayers."
Harris has argued that when the plant closed, $17.3 million in power costs was shifted to all other Appalachian Power ratepayers to help make up for the gap that occurs any time a big energy consumer leaves the market. He has argued, though, that Century officials treat that amount as a "given," that consumers have always paid and will always pay.
The motion states that, based on the newest idea for a rate mechanism, that the minimum rate for Century Aluminum must be any surcharges plus a little extra to cover the $22.7 million "arrearage over 9 years," that has amassed while Century's Ravenswood plant has been closed.
The CAD's newest proposal also suggests any changes to Century's rate above its minimum would be based solely on the London Metals Exchange market price for aluminum, "with no adjustments to account for changes in costs of production or to guarantee minimum profit margins."
The latest electricity rate idea also suggests Century's rate be capped when there is no deficit in its "bank," and the minimum rate for power would be $36.97 per Megawatt hour.
"The CAD believes that the rate mechanism outlined above meets the ‘Gorrell Standard' – it would necessitate compromises from all of the parties in this proceeding," the CAD motion reads.
The motion further explains that Appalachian Power's other ratepayers would continue to absorb the base rate amount that was shifted to them when Century's Ravenswood plant closed in 2009, according to the newest rate idea. It also allows that if Century's projected increases in the market price of aluminum become a reality, Appalachian Power's other ratepayers would reap the benefit in a future rate case.
The CAD's plan also states that Century "will enjoy the benefit of a heavily subsidized rate, which should provide it with sufficient risk abatement to be able to re-start the plant."
The PSC has received 27 letters in support of Century Aluminum's request for a special power rate and 118 letters in protest. Century's original rate plan, filed with the PSC in May, was heavily criticized as having no "floor" for subsidies, which could push a large amount of the plant's electricity costs onto other ratepayers.
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