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Economy and Business

Ormet closing becomes a bigger gubernatorial campaign issue
Democrats press Kasich on company closing

Karen Kasler
Courtesy of Ormet
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In The Region:

At the start of this election year, hundreds of workers who lost their jobs with the shutdown of an aluminum smelting plant in southeast Ohio hope for help from the state. There’s now a bill that might do that, but as Statehouse correspondent Karen Kasler reports, there are fears there will be long-term and political implications involved.

LISTEN: What could have been done about Ormet's troubles

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The closing of the Ormet smelting plant in Hannibal along the Ohio River across from West Virginia came after the company said it was facing bankruptcy and went to state regulators to ask them to order its electricity rates dramatically reduced. The Public Utilities Commission ordered lower rates, but not as low as was proposed, so Ormet wanted to cancel its contract with AEP and switch to a lower-cost retail option.

The situation has energized Democrats who say Gov. John Kasich hasn’t done anything to stop it. But Kasich’s office has said he doesn’t have the authority to override the Public Utilities Commission’s decision.

Democrats want to give the governor more power
Now the lawmaker representing the district where the plant is located, Democratic Rep. Jack Cera, has introduced a bill that would give a governor the power to terminate agreements between some companies and their utility providers.  Kasich’s Democratic opponent this fall says he backs the bill which is clearly aimed at Ormet though it doesn’t mention the company. Cuyahoga County Executive Ed FitzGerald says it’s not a perfect bill and there could be some long-term issues in extending the governor this authority, but he thinks it needs to be seriously considered.

“It’s not just for those thousand people. There are a lot of spinoff jobs there in that whole part of Ohio that are really counting on something being saved and salvaged out of that situation.”

Where was Kasich?
Democrats, led by unionized steelworkers, have been blasting Kasich over Ormet, saying that he has yet to speak out about it or to visit the displaced workers. But at least one Republican from the area says he’s very concerned about what happened in Hannibal. The plant used to be in Rep. Andy Thompson’s district. Thompson says he’s interested in finding out more about Cera’s bill, but admits he’s cautious.

“I’m a little nervous about procedural changes sometimes because we – with the Controlling Board on the whole Medicaid issue – I want to make sure that we don’t somehow, in an attempt to address one situation, set a precedent that might be problematic elsewhere.”

Kasich doesn’t typically comment on pending legislation. But his spokesman has suggested that a new request should be filed by Ormet with the Public Utilities Commission to break its contract with AEP, so it can switch to retail choice and buy electricity on the free market.

Listener Comments:

Seems to me this plant has also been in the news over the years for environmental violations. Haven't they had some releases of pretty toxic material?

Posted by: rayy (Akron) on February 21, 2014 1:02AM
I worked for Ormet under it's various owners and name changes for 40 years. Closing the smelter last year along with the adjacent rolling mill in 2005 was done for a variety of reasons including bad management and militant unions. The main reason Ormet is out of business is the cost to produce is higher than the commodity price as set by the LME. Reducing the cost of electricity by government edict would only push those costs onto other electric customers of AEP. If Ormet had been allowed to shop for electricity, they may have found a slightly better price and saved a few pennies but would never have brought their costs down below the market price of aluminum and they would have still owed AEP millions of dollars in unpaid bills for electricity that they had already used. Politicians trying to seize on this situation and give false hope to the workers are the same as a weasel sucking eggs.

Posted by: Jim (Greensboro NC) on February 14, 2014 12:02PM
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