Alcoa Secure Power Supply for Washington Smelter

Alcoa (NYSE:AA) and the Bonneville Power Administration (BPA) have reached an agreement to provide power for the Intalco aluminum smelter in Ferndale, Washington. The agreement will help secure 528 jobs at the facility, along with the associated economic benefits to the local and regional economy.

The new contract provides Alcoa with up to 320 megawatts (MW) of power at the Industrial Power (IP) rate and will allow the plant to produce a total of 184,000 metric tons per year.

Washington Governor Chris Gregoire joined Alcoa employees and local leaders at an event earlier today to welcome the new Alcoa - Bonneville Power Administration (BPA) contract. "I congratulate the Bonneville Power Administration and Alcoa for reaching this important agreement to keep the Intalco aluminum smelter operating. This agreement supports more than 500 living-wage jobs in the Ferndale area, jobs that are essential to our ability to make it through and recover from this recession," Governor Gregoire said.

"Today's signing is clear evidence of what can be achieved when federal, state and local partners work together in pursuit of a common goal," said Bob Wilt, Alcoa's President for US Primary Products.

"We are very grateful for the support we have received from everyone involved, including Governor Gregoire, Congressman Rick Larsen and Senators Maria Cantwell and Patty Murray. We are also grateful to our employees - union and management -- who have worked hand-in-hand on this issue, and to local community leaders," Wilt added

Alcoa is a 70-year customer of BPA and this contract marks a return to direct power sales under the Northwest Power Act. Direct power sales were halted in 2006. The new contract has two phases - an immediate 17-month power supply for up to 320 MW and a second phase for at least an additional five years of power. The second phase would be implemented following clarification of a recent US 9th Circuit Court of Appeals ruling and will depend on the state of future power markets.

Under terms of the agreement, the facility will maintain an average of 528 full-time equivalent jobs.

An independent study by Washington economist Dick Conway shows that each Alcoa job sustains around three additional jobs in Washington State. The results of the study indicate that over 2,000 jobs will be preserved as a result of this agreement.

"In addition, this decision has helped maintain the local tax base, expenditures with local businesses and the community contributions made by our organization and our employees," Wilt concluded.

In the past three years, Alcoa and the Alcoa Foundation have contributed more than $500,000 to local organizations, including $10,000 to the Whatcom County Toys for Tots campaign as part of a plant safety campaign this month. And in October, Intalco employees contributed more than 1,000 hours of volunteer service to local non-profits as part of Alcoa's Global Month of Service.


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