Alcoa today announced it will temporarily idle half the production at its Rockdale, Texas aluminum smelter effective today as a result of ongoing supply issues with Luminant’s onsite power generating unit, Sandow Unit 4, and the resulting market power prices being uneconomical.
Three of the plant’s six operating potlines will be idled beginning immediately as a result of the ongoing supply interruptions and local market energy costs increasing to as much as $2,000 – $4,000 per megawatt hour during peak hours. The idled potlines represent approximately 120,000 metric tons per year of production.
Output at the remaining three potlines is planned to continue using contracted long-term power. As a result of the temporary idling, the company will begin a process to lay-off approximately 250 people across its total workforce at the plant.
“There have been ongoing supply issues at the dedicated power generating unit adjacent to our plant, which has forced us to go into the open market to secure power,” said John Thuestad, President of Alcoa’s US Primary Metals division. “Unfortunately local energy costs have escalated significantly over the past few weeks to an unsustainable level and we have no choice but to idle production that is reliant on uncompetitive power.”
“This is in no way a reflection on our workforce who has been doing an outstanding job,” said Thuestad. “Luminant’s inability to consistently operate the Sandow Unit 4 for our Rockdale Operations over the last few months, has resulted in uncompetitive power and forced us to make this decision. We’ll look to work with Luminant to see if we can secure competitive power to ease the impact on our local community and try to get back to normal production.”