JEFFERSON CITY, Mo. – For the past several years, Missouri energy policy has been hamstrung in an increasingly vicious battle inside the Capitol between Ameren Missouri and Noranda Aluminum. Each session one would propose legislation and the other would oppose it leading to years of gridlock. Yesterday, the presidents of both companies signed a letter that radically changes the dynamic on energy policy in the state.
Noranda President and CEO Layle “Kip” Smith and Michael Moehn, President of Ameren Missouri, signed a letter some are calling historic with the two longtime rival companies coming to an agreement to both secure a sustainable power rate for the New Madrid smelter and begin the process of updating the state’s electric infrastructure.
Perhaps most important to seeing passage of the legislation was the acknowledgement in the letter that the the two companies’ wars bore some fault for the stagnation of the state’s energy policy.
Ameren has long advocated for renewed regulations that would update an energy grid, some of which is over half a century old, and due to increasing pressures from advantages China has over American companies the price of the aluminum, Noranda manufacturing has plummeted.
The letter references legislation that was discussed in the Senate utilities committee this week, and is likely to be supported by both the state’s investor owned utilities and also the state’s largest energy consumer.
Sources inside Noranda say that if aluminum prices increase, they have been steadily rising for the past few weeks, combined with this legislation providing a long term energy rate there could be a path for returning the 1,000 jobs to one of the state’s most economically depressed regions.
The letter outlined 6 points that the companies had reached agreement on inside the legislation.
- Establishing caps on rate increases and utility profits while providing additional layers of transparency.
- Accelerating modernization of Missouri’s electrical grid.
- Accelerating installation of smarter technology to better control consumption.
Expanding Missouri Public Service Commission oversight responsibilities. - Accelerating investments in physical and cyber-security technology.
- Providing a globally competitive power rate to Noranda’s New Madrid aluminum smelter. Acknowledgement that all other Ameren Missouri customers would ultimately pay more for electricity if Noranda is off the electric grid.
The letter also discussed timing as a critical factor, not only for the survival of Noranda, but to take advantage of the current low interest-rate environment and to immediately begin the creation of jobs in the energy sector the investment would spur.
Bootheel representatives look forward to the progress.
“It is my hope that the negotiations between Noranda and Ameren will produce a competitive power rate giving Noranda the relief it needs to continue operation,” said Rep. Shelley Taylor, R-Fredericktown. “Hundreds of people and their families have relied on the quality jobs that Noranda has been able to provide. Although a solution is critical in Southeast Missouri, Noranda staying in business should be the goal of electric consumers across the state since all other Ameren customers will pay more if Noranda is off the electric grid.”
“I’m very glad to see the two companies working together for all Missourians,” said Rep. Tila Hubrecht, R-Dexter. “I’m glad they are both being vocal to bring awareness to the unfair trade practices that are currently impacting our small and large businesses in such a negative way. Growing Missouri’s economy is a priority for myself and many others because we know more jobs help Missouri families.”
The bill is likely to begin moving through the legislative process next week.
You can read the letter here: Ameren-Noranda Letter
Rachael Herndon was the editor at The Missouri Times and also produced This Week in Missouri Politics, published Missouri Times Magazine, and co-hosted the #MoLeg podcast. She joined The Missouri Times in 2014, returning to political reporting after working as a campaign and legislative staffer.
Rachael studied at the University of Missouri – Columbia. She lives in Jefferson City with her husband, Brandon, and their two children.
