Intalco to shutter Cherry Point aluminum smelter
By Meg Olson
Local members of the business community were some of the first county residents to learn of a plan to close Intalco Cherry Point facility this week. I spoke with Intalco manager Jim Fredericks this morning and was informed that they will announce later today they have an agreement [with the BPA to shutdown], he told a May 16 meeting of the Blaine Chamber of Commerce economic development committee. Today or tomorrow, Intalco will immediately go into idle mode.
Bonneville Power Administration spokesman Ed Mosey confirmed BPA and Alcoa, which operates the aluminum smelter, had reached a deal to shut down the plant as painlessly as possible until the power market improves. This is not BPA trying to shut down these plants, Mosey said. If they could operate buying the power at the cost we pay for it, wed sell it to them. They cant. Intalco uses over half of all the power consumed in Whatcom County, 470 megawatts at full capacity.
Mosey said Intalco will ramp down operations immediately and will not resume operations until market conditions improve. BPA and Alcoa will sit down and review the power market every six months, Mosey said. If prices are conducive to resuming operations, they have that option.
Mosey said BP had committed significant funds to soften the economic impact on the area. Until October 2003, BPA will pay the salaries and benefits for Alcoas 930 workers. Kremen said he was told employees will not be idle; they will work on long-term projects at the plant and may be lent to work in the community. The deal does not include compensation for up to 3,000 Whatcom County workers whose jobs will be impacted by the smelters closure, Kremen said, but BP will give Alcoa $1.7 million a year to offset economic impacts in the community.
I believe Alcoa feels they got the best deal they could, Kremen said. This is not industry-wide. They are the only company to get this deal. This is not all gloom and doom. The positive thing is there appears to be every indication that Intalco plans to keep their plant, not walk away, and resume operations when conditions allow. Alcoa representatives were not available Wednesday to comment on the economic feasibility of restarting the smelter or their plans to do so.