Stephanie Gleason
Ormet Corp. (ORMTQ) received a ruling from the Ohio utility
regulator that will keep the power turned on at its aluminum
smelter in Hannibal, Ohio, which was slated to go black Friday,
preventing arsenic and cyanide from leaking into the
groundwater.
The Public Utilities Commission of Ohio, or PUCO, approved
Ormet's request to allow it to prepay weekly for the minimal amount
of electricity drawn by its shuttered smelter, according to the
PUCO order, even though Ormet hasn't paid its electricity bill for
previous months.
"AEP Ohio is, therefore, directed to provide electric service to
Ormet throughout the remainder of Ormet's bankruptcy proceeding,
subject to Ormet's payment for such service, at the applicable
tariff rate, weekly in advance," Ohio's utility commissioners said,
calling Ormet's request "for the purposes of complying with the
U.S. EPA's consent decree" reasonable.
American Electric Power Co. (AEP), which supplies electricity to
Ormet, had said Ormet's promise to pay weekly going forward had no
bearing on the fact that it was owed $7.3 million for September and
close to $40 million total. It was demanding payment of $1.4
million, the undisputed portion of its September bill, to keep the
power on.
During a Monday hearing at the U.S. Bankruptcy Court in
Wilmington, Del., AEP said it could turn the power off on Friday,
causing a stir among the U.S. Environmental Protection Agency
officials.
Ormet maintains interceptor wells on the Hannibal smelter site,
which keep harmful chemicals from contaminating the environment.
But, those wells require electricity to run and filter out the
chemicals.
AEP said in a statement Wednesday "we will abide by the
Commission's order and are working with Ormet on a weekly
prepayment plan that will apply going forward through the pendency
of the bankruptcy proceeding."
The PUCO order serves primarily as a stopgap measure, as Judge
Mary Walrath's commitment to attend a bankruptcy judges' conference
this week prevented her from holding another hearing before
Friday.
AEP had argued the regulator didn't have the authority to issue
this ruling, but PUCO disagreed. However, the regulator did
recognize in the order that the U.S. Bankruptcy Court retains the
authority to change the its decision.
(Dow Jones Daily Bankruptcy Review covers news about distressed
companies and those under bankruptcy protection. Go to
http://dbr.dowjones.com.)
Write to Stephanie Gleason at stephanie.gleason@wsj.com.
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