Political pressures mounting at Intalco

Energy costs are the last hurdle
March 11, 2022 at 11:10 a.m.

Staff Reporter

Political leadership in Washington, D.C. and in Washington state are calling for Ferndale's Intalco aluminum smelter to resume operations as one of only two “green” aluminum smelters in the country. 

While housing and employment challenges persist across the region, the real barrier to restarting the plant lies in the electricity costs. 

“We are concerned ... that the Bonneville Power Administration (BPA), which provided Intalco electricity for over 50 years, hasn't agreed to restore the power agreement that Intalco needs to restart,” wrote DeLane Adams, assistant communications director for the International Association of Machinists and Aerospace Workers, one of the largest unions in North America.

“We call upon BPA to restore its 50-year-partnership with the power purchase agreement Intalco needs to reopen the facility and restore those union jobs this year.”

Bonneville Power Administration, a nonprofit federal power company, had a long-term contract with Alcoa, the previous administrators of the Intalco plant, allowing the company to use a significant amount of energy at a reduced cost. 

“A strong source of electricity is critical for manufacturing aluminum and in a lot of ways, the only way that Alcoa remained here over the last 10 years is because they were able to negotiate price breaks with the BPA,” Ferndale's Mayor Greg Hansen told Cascadia Daily in January. “Otherwise, it requires so much electricity that it becomes cost-prohibitive.”

The Intalco facilities were shut down in mid-2020, resulting in the loss of more than 700 jobs. At the time, Alcoa cited the rising cost of production, the falling prices of aluminum and increased foreign competition. 

Since the plant idled operations, though, the price of aluminum has increased more than 130%, from under $1,500 per metric ton to more than $3,500, according to U.S. Rep. Rick Larsen, whose district includes Whatcom and Skagit. 

On Wednesday, Larsen sent a letter to BPA administrator John Hairston, asking BPA to consider working with Intalco's hopeful owners, Blue Wolf Capital LLC, to establish a new energy rate plan. 

“Ensuring a long-term supply of affordable electricity is the biggest challenge to re-starting operations at Intalco Works,” Larsen wrote. “I am hopeful BPA and the new ownership group can reach an agreement on the electricity rate BPA charges, even as the plant’s operators work with state and other federal partners to make the smelter more energy efficient.”

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