THE BALL has bounced its way to the Land of 10,000 Lakes.
The Public Utilities Commission of Ohio on Wednesday issued its long-awaited ruling on Ormet Corp.’s electric-rate reduction request. The Hannibal-based facility was seeking an average fixed-rate cost of $45.89 per megawatt-hour, instead of the going rate of $60 per megawatt hour.
Ormet didn’t get everything it was hoping for, but it did receive a major break, as the PUCO placed the rate at $50.
With that being the case, Ormet’s fate lies squarely in the hands of Minnesota-based Wayzata. The company announced its intentions to purchase Ormet out of bankruptcy for $221 million. The deal hinged on Ormet’s ability to reduce its electricity costs.
With PUCO’s ruling, the rates will be lowered. But the $64,000 question remains, will the reduced costs be acceptable to Wayzata. We do not know when the Minnesota company will make its decision, but it is one that will shape the future of the aluminum maker as well as much of the Ohio Valley.
We believe PUCO displayed much compassion for the fate of Ormet and its nearly 1,000 employees, by going more than halfway on the reduction request. PUCO also had the task of watching out for the benefits of local ratepayers, as they would be the ones shouldering the burden of subsidizing some of Ormet’s power costs with increases to their own bills.
The PUCO has approved $346 million in financial support for Ormet over the past four years.
As we view it, the $50 figure is an equitable one. But is it a low enough amount to entice Wayzata to continue its purchase plans?
We certainly hope so. If Wayzata has a change of heart and halts its efforts to buy Ormet, it may signal the end of the Monroe County plant.
Such an occurrence would be a devastating blow that would be very difficult for the Ohio Valley to recover from.