HANNIBAL - On the same day Ormet received permission to put off paying its American Electric Power bills, Chief Executive Officer Mike Tanchuk confirmed the aluminum producer lost $15 million in the first half of 2012.
The Public Utilities Commission of Ohio on Wednesday approved Ormet's request to defer paying electric bills that would be due for October and November. Instead Ormet will pay those bills in 17 monthly installments during 2014 and 2015. The company said the bills total approximately $27 million.
As part of the deal, however, commission members said that any further Ormet requests for help from the PUCO must include a "business plan confirming its long-term ability to exist without ratepayer support."
Photo by Casey Junkins
Ormet Corp. received permission Wednesday from the Public Utilities Commission of Ohio to defer electric bill payments to American Electric Power.
A weakened metals market, coupled with electric bills that are set to increase by about $20 million annually due to a recent PUCO ruling, are the chief reasons for Ormet's present challenges.
"There is much work yet to do, but today was a big step forward toward success," Tanchuk said Wednesday. "Ormet looks forward to continuing to work with AEP toward a long-term energy solution. We are facing difficult short-term headwinds in the aluminum market driven mainly by global financial uncertainty."
Tom Byers, president of United Steelworkers Local 5724 at Ormet, confirmed that 102 union workers received layoff notices last month, but 10 of those workers later returned to work.
He said Wednesday that employment levels have remained stable with about 92 workers displaced. Byers collected more than 2,500 signatures for a petition and accompanying letter that he mailed to Ohio Gov. John Kasich seeking help for Ormet.
"This is good news today," Byers said. "There are still a lot of issues that the company and AEP need to work out. JobsOhio is involved, too."
"Ormet is a vital part of southeast Ohio's economy, and the administration has worked to encourage efforts among the independent stakeholders to craft a successful, sustainable future for the company and its employees. Today's ruling by the PUCO is an important part of the process, and the governor applauds the commission's decision," said Rob Nichols, press secretary for Kasich.
Byers said at this point, he is just glad government officials are noticing how important Ormet is to eastern Ohio.
"The last thing this area needs, especially right now, is to lose these jobs. And that doesn't even count all the jobs they support," he said.
Tanchuk said he sees a bright future for the company.
"We are optimistic that the global aluminum market will continue to grow and Ormet will be a strong partner in the lives and economic well-being of the families and communities in the region," he added.
AEP spokesman Jeff Rennie said again Wednesday that his company had no comment on the matter, though the Ormet filing states that the aluminum producer "certifies" that AEP consents to the plan to defer payment.