BC Government Will Not Appeal Alcan Ruling

Monday, February 19, 2007 04:13 AM

Premier Gordon Campbell says the Province of BC will not appeal the British Columbia Utilities Commission ruling against an agreement between Hydro and Alcan that would see increased hydro rates under a new contract, in return for the development of a new smelter in Kitimat.

Speaking in Prince George on Friday, Campbell says he still believes that a new smelter is a good idea for Kitimat even if it employs 500 fewer workers.

He says the aluminum business is a very competitive one and a smelter would be a forward-thinking development, but, despite those sentiments, the premier says the province will not in any way interfere with the BCUC ruling.

"I could have simply written them a letter saying, ’you are a body of the government and you are to approve the deal,’ we did not; I am not in the pocket of Alcan."

Campbell says if Alcan and BC hydro want to appeal the BCUC ruling, they can, but the province will not be a part of that process. "If the deal is going to pass," he concludes, "Then it must pass with the BCUC."

The premier says he has not read the entire decision of the BCUC in which the commission said that the deal negotiated between Alcan and BC Hydro was not in the best interests of the people of BC.

In its ruling, the commission commented that it felt that BC hydro could have negotiated a much better deal.

Under the proposed agreement, an old contract would be re-negotiated. The result, according to opponents of the deal, would give Alcan $1-billion dollars in subsidies by increasing the amount of money they would receive for hydro delivered to BC Hydro.

Under the agreement that Alcan and BC hydro sought approval for the rate for power would increase from $44.22 a MWH to $79 dollars a MWH.

Alcan says the new deal is needed in order for a new smelter to be built in Kitimat. That new smelter would employ 500 fewer people, but would be a state-of-the-art facility.

Opponents say that the users of electricity in the province would be called upon to subsidize Alcan upwards of $1 billion dollars during the contract in order to have a new smelter built.

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Posted on Monday, February 19, 2007 04:13 AM in News by 250 News

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Comments

Posted by: Andyfreeze on February 19 2007 8:57 AM

Only Gordon Campbell WOULD think that a project that wipes out 500 jobs in an area that needs jobs and costs the taxpayers of B.C.more money over the term of contract, is a good idea.
He IS right about one thing even though he is dead wrong about the deal in general...he could in fact, have said to the BCUC "approve the deal".Sure,it would have cost him his job. But then he is so deceptive and arrogant that I am suprised he did't do it anyway!After all,god can do anything!And he is wrong on another point too.He says he is NOT in Alcans pocket...well,the whole damn province has been held hostage and dictated to by Alcan for years,so what would change? In the end they will get what they want and so will Campbell.Wait and see.

Posted by: Gofaster on February 19 2007 10:37 AM

You picked up on that too Andy...
I can hardly wait until vote time rolls around again....
The criminal should have been fired a long time ago....

Posted by: diplomat on February 19 2007 10:42 AM

The Alcan thing is not about wiping out 500 jobs. The present smelter is old and uses a lot of power because of the outdated Soderberg smelting process that it was built for over 50 years ago.

Using the latest Pechiney smelting process it will reduce power consumption by 40% for the same tonnage produced and it will also reduce pollution by quite a bit.

Additionally, it is less labour intensive and that is where the elimination of the 500 jobs comes from.

It is like a manual sawmill from the good old days converting to a modern robotized/computerized low manpower operation.

Is Alcan entitled to convert to the most advanced technology available today?

Or not?

Posted by: Andyfreeze on February 19 2007 11:40 AM

I agree with some of your logic in principal diplomat but all the logic in world won't help those who find themselves unemployed.And it would devastate Kitimat and the surrounding area as far as employment is concerned.

I am sure there must be a better way that doesn't cost B.C.taxpayers more money for Alcan to improve their lot.Alcan has not earned the right to be treated like a fine upstanding corporate citizen.They have taken a lot and given very little in return to this province.
But,it is probably a moot point anyway.My guess is they will get what they want one way or the other.This deal would only benefit Alcan and NOT B.C. Gordon Campbell understands that completely, but to him it is about big business and NOT the little guy trying to feed his family.Expect the same deal with different wording.

Posted by: diplomat on February 19 2007 1:59 PM

There may be a better way, although I just don't know what it could be.

Perhaps Alcan could be persuaded to locate some of its secondary operations in Kitimat, like an aluminum alloy wheel casting facility (I think they have one in Richmond already) and an extrusion plant ( the type that makes aluminum extrusions for windows, doors, etc.) and thereby provide more jobs for Kitimat while at the same time living up to the terms of the original agreement which stipulates that excess power be used for industry in the vicinity.

Alcan is also a mayor foil producer and producer of chemicals, I understand.

Surely, with the Chinese and Korean automobile industries mushrooming and adding millions of new vehicles (each needs at least four wheels) just in Asia annually and Prince Rupert about to become a new container port on the West Coast this would be a benefit to the whole area.

I know some people in Kitimat who are eagerly anticipating an early retirement package either right now, or when the new smelter is ready to go with less employees. A certain number retires every year, no matter what.

Undoubtedly some may not qualify for retirement and may be laid off.

That's the downside.

The prospect of a brand new smelter which will provide secure employment for 1,000 workers for another 40 to 50 years is nothing to be sneezed at, either.

That's the upside.

As well, Alcan may expand the new smelter in the near future, especially if aluminum prices stay high and when Alcan runs out of provinces and countries (Africa for instance) that at present eagerly give it cash, tax breaks and cheap power - like Quebec.

Posted by: Palopu on February 19 2007 4:34 PM

Alcan doesnt get any cheap power from Quebec. The cheapest power it gets anywhere in the world is at Kitimat/Kemano. Thats why they located there in the first place. Alcan is a Multi National Corporation and of course would try and get the best deal possible for excess power, however why should we pay for it??

Alcan can go ahead and modernize their plant in Kitimat and continue to make millions of dollars without one red cent from BC Taxpayers or anyone else.

Once they lose the ability to make millions selling power, they will revert to making ingots, which of course they will produce at the lowest cost and sell for the highest price just like they have been doing for the last 56 years. Anyone who thinks they will reduce production or leave the area is living in a dream world.

The Mayor of Kitimat has had this situation pegged correctly from the get go, and is presently taking the BC Government to court in relation to the problem.

Alcan thought they would try this on for size, and it now appears that it doesnt fit., Back to producing ingots. Back to a mundane existence of making millions and millions of dollars profit, selling ingots. Time to put the PR Spinners into storage until the next **BS** story needs to be put out.

Posted by: diplomat on February 19 2007 5:36 PM

"Alcan doesnt get any cheap power from Quebec."

Yes, it does. The Quebec Liberals are lending Alcan $400 million dollars, interest free for 30 years. Plus a further $112 million in tax breaks, plus BELOW COST power, plus a 50-year extension on the company's water rights.

(Citizen Newspaper, Jan. 20th, 2007).

It is not as cheap as Kemano power, of course, but it is cheaper than Quebec cost.

Alcan in Kitimat has been producing ingots at the lowest cost and it has been selling them at the highest profit possible for over half a century. That is Alcan's business mandate and the share holders expect it.

"Anyone who thinks they will reduce production or leave the area is living in a dream world."

I agree, except Kitimatians are fearful that Alcan will keep reducing production for the sake of selling more power, which is more profitable.

By the way, if Alcan wants to sell power it has to have a buyer, like B.C. Hydro, or buyers.

If nobody buys it, Alcan can't sell it and it must out of necessity use it for smelting of alumina, producing aluminum.

Takes two to tango.