The short of it is that Alcoa wants a long-term contract with BPA to acquire a gazillion watts of power for its aluminum smelters, locking in rates for 7 years total. This is good for Alcoa. They get preferential pricing on bulk power for a long period of time, allowing them to have a fixed liability to BPA for the commodity of electricity. Sounds neat. If I could lock in my power bill for 7 years I'd do it to. As you might suspect, that's where things get black for the rest of us.
What happens when (not if, but when) electricity rates rise? Well BPA has a simple plan for that: recovery of the shortfall will be passed on to BPAs other utility customers. Me, essentially. And probably you too, if you live in the northwest and your utility company buys power from BPA. Some estimates put the first round of increases at 10% across the board for customers other than Alcoa and $500 billion worth of shortfalls over the contract period. (Some people have asked where I got the figures. I work for a community power company and they got the numbers straight from the BPA.) And if something diabolical happens to spike the cost of power and its production in the next seven years (like the mother of all socialist rear-enders, "cap-and-trade", would bring into play) any and all of BPAs other customers are really going to take it up the socket.
Until 8/3/09 BPA is eliciting public comments (look under "Proposed Terms of Service for DSIs"). (Yeah, I know that's tomorrow.) You know I put my thoughts down.
BPA's proposal to provide half a billion dollars to Alcoa, Inc. and Glencore/CFAC at the expense of public power consumers is poor public policy. Really, that's an overly kind way to frame it. More accurately the whole concept of sticking any group - public or private - with a tab to subsidize any business entity is unfair, socialistic and immoral.
Alcoa et. al. can complain until the moon turns to cheese about their inability to turn a profit/continue to operate/employ however many thousands/etc., but that doesn't change the fact that I can't be expected to shoulder any portion of their power bill any more than I would be able to expect them to pay for mine. Any argument that "these businesses provide more for the surrounding communities than they take" is bollix. Half a billion dollars is a lot to take, especially in these downward-trending economic times. If they can't operate their business on a model that doesn't include perpetrating grand larceny on other energy customers, they shouldn't be in business.
The fact that BPA is even looking at this proposal with anything but distain and fits of laughter is flatly ridiculous. An increase in energy rates to anyone at this time will drive up unemployment and cause undue hardship for more than just Alcoa and Glencore. My job - as well as the jobs of my family members, friends and community - are just as important as any in Ferdale.
If Alcoa/Glencore can't pay their power bills, do the same thing to them you would do to anyone else: turn off the lights.
Most of the comments out there now are positive - primarily people who work at the smelting plants and in the surrounding communities. Frankly, I'd be saying nice things about this dark deal if I were in their position as well. The problem is that if this goes through, the only position any of the rest us will be in is over the barrel.
