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Alcoa, Chelan PUD Negotiating Smelter Idling Fee Extension

Negotiations between the Chelan County PUD and Alcoa Corp. over the idled Wenatchee Works smelter are coming to a head. PUD Commissioners yesterday reviewed a staff recommendation to proceed with a contract amendment negotiated with Alcoa that would give Alcoa more time to decide whether to restart the aluminum smelter.
The proposed amendment would allow a one-year deferral and restructuring of Alcoa’s existing Power Sales Agreement. Under the current agreement, should the Wenatchee Works plant remain curtailed through June, a $67 million deferred power contract charge would become due. That charge was specifically designed to encourage Alcoa to operate the plant.  Under the proposed amendment, a large portion of the contract charge would be delayed until June of 2018 and in return, Alcoa would pay the PUD $7.3 million on June 19, 2017.
Should Alcoa restart before June 2018, the existing contract terms would apply. If the plant remains curtailed, the remaining $62 million payment would be due in June 2018 and the contract and existing terms would continue.
In recent months, global aluminum prices have increased from when the plant’s operation was curtailed in December 2015, creating hope that the plant might restart production. More than 400 people were employed at the plant when it was curtailed.
KOHO’s Dan Langager was at the PUD Board meeting yesterday and joined Chris Hansen on the KOHO Morning Show to break it down.

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