JEFFERSON CITY, Mo. (AP) — Missouri's largest consumer of electricity is asking the Missouri Public Service Commission to cut its electric rate, saying Ameren Missouri is overcharging customers.
Noranda Aluminum Holding Corp. filed the request Thursday, seeking about a 25 percent reduction in the electric rate Ameren charges at Noranda's aluminum smelter in New Madrid in southeastern Missouri.
"In order to be sustainable in today's aluminum price environment, it is essential for New Madrid to have competitive power rates," Layle K. "Kip" Smith, Noranda's chief executive officer and president, said in a statement.
If approved, rates for other Ameren Missouri customers could rise. Noranda said its request would be expected to increase other consumers' rates by 1.8 percent or less.
Warren Wood, Ameren Missouri's vice president of legislative and regulatory affairs, disagreed. He told the St. Louis Post-Dispatch that the change would raise rates for other consumers by more than 2 percent and accused Noranda of, in effect, seeking to pass on the cost of its rate cut to other Ameren customers.
Wood said the utility will fight the cuts.
Noranda said in a filing to the PSC that Ameren is earning a profit larger than the 9.8 percent profit allowed by state regulators.
Noranda spokesman John Parker said Friday that one-third of the company's cost in New Madrid is for electricity. Without a rate reduction, Noranda may have to cut 150 to 200 jobs, Parker said.
"Ultimately, you're in a position where the smelter could be subject to closure," he said.
In July, Gov. Jay Nixon was in New Madrid as Noranda announced a $45 million smelter expansion, creating 29 new jobs. The project was aided by state economic development incentives. Noranda also announced a $38 million expansion in 2010.
Noranda has said that the New Madrid smelter accounts for about 13 percent of all U.S. primary aluminum production.