The two companies signed a letter of intent outlining the terms of a multi-year agreement to supply Noranda's primary aluminum smelter in Southeast Missouri. The agreement is slated to become effective June 1, 2005.
Noranda's aluminum complex is located on the west bank of the Mississippi River, five miles south of the city of New Madrid. Employing more than 1,100 people and with an annual payroll of $57 million, the facility provides major economic support and stability to a 10-county region of Southeast Missouri. It is the largest energy user in Missouri, requiring as much electrical power as a city the size of Springfield, Mo.
"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. "We also appreciate the tremendous support of the elected officials of Southeast Missouri\-particularly Sen. Peter Kinder\-who led the way in getting legislation passed that enabled Noranda to choose the electric power supplier that could best meet its needs, AmerenUE."
Noranda President Bill Brooks also expressed his thanks to local and state officials for making the new power contract possible.
"Ours is an energy-intensive operation that must compete in a challenging global marketplace," Brooks says. "A reliable, low-cost supply of electricity is critical to our ability to succeed in this intensely competitive arena."
At a news conference in New Madrid, today, Kinder highlighted the importance of Noranda to the economy of the state and region, while Brooks and Rainwater outlined the next steps that will allow Noranda to become a full-requirements customer of AmerenUE on June 1, 2005.
A key condition for the agreement to become effective is that the Missouri Public Service Commission grant authority for AmerenUE to extend its Missouri service territory to include the area where the Noranda facility is located. AmerenUE plans to file that request before the end of the year.
Another key condition is regulatory approval to transfer by June 1, 2005, the non rate-regulated, Illinois-based combustion turbine generating units at Kinmundy and Pinckneyville to the Missouri-based, rate-regulated operations of AmerenUE. In a July 28 order, the Federal Energy Regulatory Commission approved the transfer of these generating units with a total capacity of 550 megawatts; however, this transfer is still subject to approval of the Securities and Exchange Commission under the Public Utility Holding Company Act.
The proposed acquisition of the 550 megawatts of combustion turbine units would help ensure AmerenUE's ability to cost-effectively supply Noranda's electric load requirements and partially satisfy a commitment in AmerenUE's 2002 Missouri electric rate case settlement to make certain infrastructure 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. Noranda's aluminum reduction plant at New Madrid, which incorporates the most advanced environmental control technology, is designed for annual metal production capacity of 250,000 metric tonnes.
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.
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