Franklin, Tennessee - Noranda Aluminum Holding Corporation (NYSE: NOR) announced today that its wholly owned subsidiary Noranda Aluminum, Inc. (together referred to as "Noranda" or "the Company") has filed with the Missouri Public Service Commission ("the Commission") a request to change the rate design for Ameren Missouri customers. The filing is supported by testimony of the United Steelworkers Union, community organizations and legislators. The filing is also supported by the Missouri Retailers Association, which includes large commercial consumers, and the Missouri Industrial Energy Consumers, representing large industrial consumers. The filing requests a rate design change that would reduce electricity costs at the Company's aluminum smelter in New Madrid, Missouri ("New Madrid").
"In order to be sustainable in today's aluminum price environment, it is essential for New Madrid to have competitive power rates," said Layle K. "Kip" Smith, Chief Executive Officer and President. "We are grateful for the support of a broad-based coalition seeking to ensure New Madrid's long-term sustainability. Noranda respects the Commission's process and seeks to actively participate in this process and to engage in a constructive dialogue with all stakeholders."
The Company's filing requests an initial rate of $30 per megawatt hour ("Mwh") for New Madrid. Under the proposed ten-year rate structure, New Madrid's power rate would not be subject to fuel adjustment charges, but would share in future rate increases granted to Ameren Missouri by the Commission, subject to a two percent cap for each general rate case. The rate design requested by the Company is revenue-neutral to Ameren Missouri, and is expected to increase other consumers' rates by 1.8% or less.
The proposed rate reduction is a key component of the Company's ongoing comprehensive sustainability efforts. Compared to New Madrid's 2013 electricity rates, the rate change would have reduced the Company's integrated net primary aluminum cash cost by over 8 cents per pound.
The Commission will in its discretion decide the schedule for consideration of the filing. With the support of various consumer groups, the Company has requested that the Commission approve the reduced rate on an expedited basis with an effective date of August 1, 2014.
As of December 31, 2013 Noranda employed approximately 2,300 people, including approximately 900 people at New Madrid. New Madrid is the largest direct and indirect manufacturing employer in southeast Missouri.