In October 2004, AmerenUE announced that through a first-of-its-kind agreement, Noranda Aluminum, Inc. had chosen the utility company as the electricity supplier for its plant at New Madrid, Mo. AmerenUE is a subsidiary of St. Louis-based Ameren Corporation (NYSE: AEE). The transaction marks AmerenUE's largest single tariffed contract.
The two companies signed a letter of intent in 2004 outlining the terms of a multi-year agreement to supply Noranda's primary aluminum smelter in Southeast Missouri. In March 2005, the Missouri Public Service Commission granted authority for AmerenUE to extend its Missouri service territory to include the area where the Noranda facility is located.
"We are pleased to have the opportunity to serve Noranda - a company that has been a leading employer in this region for more than 30 years," says Gary L. Rainwater, chairman, president and chief executive officer of Ameren Corporation.
"Securing a long-term, cost effective contract with a reliable supplier of electricity is fundamental to our future success and we are very pleased to be a partner with AmerenUE, a Missouri-based company" stated Keith Gregston, president and general manager of Noranda Aluminum - Primary Division.
One of two key conditions for completion of the transaction was final regulatory approval for the transfer of certain of AmerenUE's Illinois electric distribution and transmission assets and natural gas distribution assets, along with related personnel to another subsidiary-- Springfield, Ill.-based AmerenCIPS. The other condition was the transfer of the non rate-regulated, Illinois-based combustion turbine generating units at Kinmundy and Pinckneyville to the Missouri-based, rate-regulated operations of AmerenUE. The transfer of AmerenUE-Illinois utility properties has been approved by the Illinois Commerce Commission (ICC), the Missouri Public Service Commission (MoPSC), the Federal Energy Regulatory Commission (FERC) and the Securities and Exchange Commission (SEC). The transfer of the generating assets, with a total capacity of 550 megawatts, received approval from the FERC and the SEC.
The acquisition of the 550 megawatts of combustion turbine units helps ensure AmerenUE's ability to cost-effectively supply Noranda's electric load requirements and completes a commitment in AmerenUE's 2002 Missouri electric rate case settlement to make certain generating capacity investments prior to June 30, 2006.
Noranda Aluminum, Inc. is a major U.S. entity in the international group of operating companies headed by Noranda Incorporated of Toronto, Canada. Formed in 1968, Noranda Aluminum marked the Noranda Group's entry into the North American primary aluminum producing industry. The aluminum reduction plant, located five miles south of the city of New Madrid on the west bank of the Mississippi River, employs 1,100 people with an annual payroll of $57 million. It has an annual production capacity of 250,000 metric tonnes of aluminum and incorporates the most advanced environmental control technology. The facility provides major economic support and stability to a 10-county region of Southeast Missouri and requires as much electrical power as the city of Springfield, Mo.
AmerenUE is the largest electric utility in Missouri and the state's third largest supplier of natural gas. With assets of more than $17 billion, the utility company's parent company\-Ameren Corporation, through its subsidiaries, serves 2.3 million electric customers and 900,000 natural gas customers in a 64,000-square-mile area of Missouri and Illinois.