HANNIBAL - Officials at Ormet Corp. soon will learn if Ohio utility regulators will allow the company to defer paying its American Electric Power bills, as Ormet strives to avoid shutting down by the end of the year.
The filing with the Public Utilities Commission of Ohio is the latest move in the aluminum producer's efforts to maintain operations in the face of electric bills that are increasing by about $20 million per year.
Noting that Eastern Ohio is an "economically depressed region where Ormet's contribution as an employer, taxpayer and purchaser of goods and services is vital to the area's economy," Ormet wants the commission to permit the company to pay the bills that would be due for October and November in 17 monthly installments during 2014 and 2015.
"The requested deferred payment arrangement is vital to protect thousands of Ohio jobs," the company states in the filing. "Ormet needs immediate relief from the payments due in November and December to continue operating its facilities in Hannibal, Ohio."
The commission could rule on the matter as early as today, according to commission spokesman Jason Gilham. AEP spokesman Jeff Rennie said Tuesday his company had no comment on the matter, though the Ormet filing states the aluminum producer "certifies" that AEP consents to the plan.
A Worker Adjustment and Retraining Notification Act notice Ormet filed this summer states the company may lay off nearly all of its 1,000 employees by the end of this year. In addition to the increased electricity costs, Ormet also cites declining aluminum prices on the London Metal Exchange as a problem for the company.
Ormet President and Chief Executive Officer Mike Tanchuk could not be reached for comment Tuesday. However, the request filed with the PUCO is only one factor that could be used to keep Ormet running, as JobsOhio also is considering company proposals to remain productive in coming years. State tax breaks are one of the proposals JobsOhio is considering for Ormet.
Ohio Gov. John Kasich and the Ohio General Assembly created the nonprofit JobsOhio last year to "lead the state's economic development efforts." It lists the desire to "attract and retain" jobs as one objective.
Tom Byers, president of United Steelworkers Local 5724 at Ormet, confirmed 102 union workers received layoff notices last month but said 10 of those workers later returned to work.
Byers could not be reached for comment Tuesday. Byers previously said he collected more than 2,500 signatures for a petition and accompanying letter that he mailed to Kasich, seeking the governor's help to find a solution for Ormet.
"Ormet is by far the largest employer and tax contributor in rural Monroe County. To lose these jobs would be devastating. Please get involved and do all you can to preserve our jobs and our communities," the letter to Kasich reads, in part.
Ormet also issued an additional W.A.R.N. notice for 250 employees at the company's Burnside, La., aluminum refinery. These reductions come primarily because of the shutdown of two of the six potlines at Hannibal.
As Ormet moves forward, the aluminum producer has hired Evercore Partners to help determine its long-term course of action. According to the firm's website, Evercore handles "mergers and acquisitions; divestitures and restructurings." A potential divestiture would involve selling some of the company's assets. As part of Ormet's 2004 bankruptcy filing, the company closed and sold its former rolling mill, located just south of the reduction plant.