Ryan, Brown Write PUCO in Favor of Warren Steel
WARREN, Ohio -- Two federal lawmakers are urging the Public Utilities Commission of Ohio to give Warren Steel Holdings "all due consideration" in its request for a reduction in electricity rates, saying that a plant closing would be "devastating" for the community.
In a letter drafted June 20 to PUCO Chairman Tom Johnson, U.S. Rep. Tim Ryan, D-13 Ohio, and U.S. Sen. Sherrod Brown, D-Ohio, emphasized that hundreds of jobs in Warren would be affected should the operation close.
"A plant closure would be devastating to the local economy, costing more than $53 million in employee compensation," the letter says. "A viable Warren Steel would not only protect the existing local jobs, but has the potential to attract new strategic partnerships that could lead to future growth and expansion in Ohio."
In late March, the company idled its production operations at its plant in Champion Township in part because of the higher energy rates it pays compared to other industrial concerns.
On June 4, Warren Steel filed an expedited request with the PUCO for reduced energy rates so it could restart production at the plant on Mahoning Avenue.
"The rate that Warren Steel paid for electricity when operating was much higher than the rates paid by its predecessor, CSC, or any of its competitors," the company argued in its filing.
Ryan and Brown reiterate in their letter: "Without a competitive power rate, the company has no plans to restart operations." However, should the company be accorded a revised rate structure, it would allow Warren Steel to make "state-of-the art" upgrades to the plant, which could lead to new jobs there, the lawmakers said.
"We ask that the PUCO give all due consideration to Warren Steel Holdings' request for a reasonable agreement," the letter concludes.
The company says its electricity costs stood in excess of $75 per megawatt an hour, or MWh, while in-state and out-of-state competitors, based on May 2012 data, were paying $48 MWh, according to documents filed with the PUCO.
Warren Steel is requesting the rate reduction over six years. Under its proposal, the steel maker would pay $50 MWh the first year, $51 MWh the second, and $52.5 MWh during year three, documents say. Years four through six would constitute a rate 20%, 10%, and 5% respectively below the applicable Ohio Edison nonshopping price.
Warren Steel's filing says it employs 180 wage and salary workers plus another 66 full-time contractors. When overtime is taken into account, those jobs translate into 309 full-time equivalent positions, the company says.
No one has yet been laid off at the plant, the company noted, but warned layoffs "are likely unless Warren Steel restarts operations."
Annual payroll at the company is $51.4 million, plus $5 million in benefits. Last year the company purchased $81 million worth of materials from Ohio vendors.
Copyright 2014 The Business Journal, Youngstown, Ohio.
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