Tester urges long-term contract between Columbia Falls Aluminum, BPA

KALISPELL – In hopes of moving along negotiations between Columbia Falls Aluminum Co. and the Bonneville Power Administration, U.S. Sen. Jon Tester on Monday urged a long-term energy agreement that would restore jobs to the shuttered plant.

Columbia Falls Aluminum shut down at the end of October 2009, forcing layoffs of nearly 90 workers as high energy prices made operations unprofitable.

In a letter to BPA Administrator Stephen J. Wright, the Democratic senator implored the agency to "finalize a contract before the end of the year, so the plant can return to production in the New Year and we can return our economy to its full power."

Tester cited the potential for as many as 350 jobs with good wages if the yearlong negotiations are brought to a successful close.

"This recession has hammered the Flathead Valley with double-digit unemployment and job losses in core industries," Tester wrote in the letter. "Reopening the CFAC plant could create as many as 350 good-paying jobs in the Flathead Valley. I urge you to work swiftly and flexibly to ensure that a power contract is signed … to bring these jobs back to the Treasure State."

Bonneville markets power produced at federal hydroelectric dams in the Pacific Northwest, and for decades sold at-cost electricity to big industrial customers. Those energy prices continued to rise last year as a result of litigation against BPA, however, and CFAC was unable to find less expensive power on the open market.

Reached by phone in Washington, D.C., Tester said he will continue to negotiate on the plant's behalf, and stressed the importance of maintaining and sustaining Montana's manufacturing base.

"These are good-paying jobs in an area where good-paying jobs are badly needed," Tester said. "The negotiations have been going on for some time and I wanted to see what I could do to prod them along and encourage an agreement."

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CFAC spokesman Haley Beaudry said the negotiations have been plodding along since the plant shut down more than a year ago, and he recently asked for Tester's assistance securing a long-term contract.

Beaudry said the length of the proposed contract is a major point of contention between CFAC, BPA, and Glencore International AG, which bought CFAC in 1999, adding that a long-term contract is the first step toward restoring the jobs lost in the CFAC's closure.

"It's expensive to reopen the plant. It's a complicated and challenging task," Beaudry said. "In order to recover the investment required to reopen, you have to be able to operate long enough to realize that investment."

BPA previously proposed a short-term 18-month deal that would guarantee CFAC at least enough affordable power to run at 20 percent capacity, and possibly enough to operate at 40 percent. But Beaudry said a longer contract is necessary to secure a loan from the bank substantial enough to remain open.

"I would like to believe that Senator Tester's work has a significant impact," Beaudry said.

Doug Johnson, a spokesman for BPA, said the company provided CFAC with new draft terms of an agreement on Monday, and is waiting for their reaction and feedback.

"Once we get that we will continue to discuss the terms as we work toward a formal agreement," he said.
Johnson declined to divulge the specific terms of the proposed agreement, saying the company wanted to give CFAC an opportunity to review the terms before disclosing them publicly.

Once that happens, the terms will be made public for review, and then ultimately the administrator will make a decision about whether to restore service and sign the contract.

"We certainly appreciate Senator Tester's feedback, and we are working on this to make sure we meet CFAC's needs, and make sure that our own needs are met as well," Johnson said.