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Alcoa and Chelan PUD Reach Agreement in Principle for Long-term Power for Wenatchee Smelter PITTSBURGH and WENATCHEE, WASHINGTON--June 13, 2001--
Alcoa Inc. and the Chelan Public Utility District (PUD) announced today
that they have reached an agreement in principle that will provide
long-term power for Alcoa’s Wenatchee, Washington aluminum smelter and
other Chelan PUD customers in the future.
As part of this agreement, Alcoa will idle its Wenatchee smelter for
approximately 15 months starting July 1, 2001 and enable the PUD to
acquire additional power supplies to serve Alcoa’s and other Chelan PUD
customers’ needs in the future. Wenatchee will maintain a workforce
slightly over 400 employees while the plant is idled.
Under this agreement, the Wenatchee smelter will return the power it
would have used to the Chelan PUD. The PUD will then sell that power at
market rates and use that revenue to acquire up to 400 MW of additional
power to serve Alcoa and other PUD loads in the future. Final size of
the new resources and length of the idle period will depend on
prevailing market power prices. Power sales revenue will also be used to
cover a major portion of the Wenatchee facility’s financial losses
during the production curtailment.
The impact on Alcoa’s earnings during the idle period will not be
The Wenatchee smelter's planned operating rate was 95,000 metric tons
per year (mtpy) in 2001; total capacity is 220,000 mtpy. Alcoa plans to
restart 95,000 mtpy of capacity at Wenatchee at the end of the idled
Subject to negotiation of further details, Alcoa will purchase power
from the Chelan PUD through 2036, and Chelan will receive 100 MW of new
resource after 2011 for its other local loads. Alcoa may elect to resell
a portion of the power to others, including its other Northwest
facilities, as long as specified employment levels are met at the
“While it is always difficult to idle capacity, this arrangement will
allow us to do the best we can for our workers, communities and other
stakeholders during the limited shutdown period,” said Al Renken, Alcoa
vice president and president of Alcoa Primary Metals. “This agreement
with Chelan will provide a long-term power source for Alcoa's Wenatchee
smelter and its employees."
“This arrangement with Alcoa allows us to acquire additional power
supplies to serve Chelan County loads in the future and maintain Chelan
County employment at no cost to the Chelan PUD or its other ratepayers,”
said Roger Braden, Chelan PUD General Manager. “It is a win-win
arrangement for the PUD, Alcoa and its employees, the community and our
The contract is subject to approval by Alcoa and the Board of
Commissioners. The Board of Commissioners will be considering the
agreement at public board meetings in June.
(Alcoa NYSE: AA)
Joyce A. Saltzman
Charles D. McLane, Jr.
Certain statements relate to future events and expectations and as
such constitute forward-looking statements involving known and unknown
risks, uncertainties and other factors that may cause actual results to
be different from those expressed or implied in the forward-looking
statements. Important factors that could cause actual results to differ
materially from those in the forward-looking statements include
uncertainties regarding the outcome of the energy crisis in the Western
United States and the other risk factors summarized in Alcoa's SEC