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ASiMI Weighs Power Prices for Production Plant

Posted on: Sunday, 20 November 2005, 15:00 CST

By Jennifer McKee, The Montana Standard, Butte

Nov. 19--HELENA -- State and Butte officials are concerned Montana's high energy prices could cost Butte a $300 million expansion of the Advanced Silicon Materials silicon production plant, now owned by a Norwegian company.

Ironically, most Butte and Anaconda lawmakers supported the 1997 deregulation law that resulted in the demise of the old Montana Power Co., which had provided the state some of the lowest-priced electricity in the nation.

Renewable Energy Corporation, a Norwegian solar energy company, earlier this year bought 75 percent of Advanced Silicon Materials L.L.C.. The purchase gave REC two silicon plants: one in Butte, and a second in Moses Lake, Wash.

John Hill, of REC's Moses Lake branch, confirmed Friday the company is considering a major expansion at one of its properties, including Butte and Moses Lake. Company leaders have not yet made a decision about where the projected $300 million expansion will take place.

Hill deferred all other questions to Thor Hartmann, president of the Moses Lake facility. Hartmann was unavailable Friday.

Jim Smitham, executive director of the Butte Local Development Corporation, said his group gave REC a proposal in September of different incentives Butte officials could offer to make the city the most attractive candidate for the expansion. The options included using a special tax district to allow Butte-Silver Bow to build the roads, electrical sub-station additions even a new building for the expansion.

But that may not be enough.

"The thing they're judging a lot of their criteria on was the cost of electricity," Smitham said. "There wasn't much we could do there." Evan Barrett, the state's chief business development officer and former head of Butte Local Development, said his office is looking into getting cheaper power from one of the new, proposed power plants in the state, but any deals are uncertain.

"We're scratching our heads a little bit with the power part of it," Barrett said.

Barrett said he thinks Butte is an attractive place for the plant to expand, aside from energy costs, and he's hopeful the deal put together by local development officials will overcome the energy costs snag.

"I recently heard Montana is now the 12th least expensive site in the country for power," he said. "But the problem for us is that we used to be somewhere between third and sixth. Some of the states around us, particularly to the west, are lower-cost states." The Moses Lake area falls into that category. The REC silicon plant there buys its electricity from the Grant County Public Utility District, a consumer-owned utility that owns two dams on central Washington's Columbia River.

The outfit is among three public utilities with dams on the Columbia River that are consistently rated as having some of the cheapest power in country, said Gary Garnant, a spokesman for the Grant County Public Utility District.

"We're generally in the top three," he said.

Butte is one of five Montana cities vying to buy NorthWestern Energy. But Smitham said such a purchase wouldn't necessarily help Butte offer lower electrical rates to big buyers like REC. That's because NorthWestern or the cities, should they acquire the company only delivers electricity and natural gas. It doesn't generate any power, but must buy that on the open market.

The Grant County Public Utility District generates its own power.

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Copyright (c) 2005, The Montana Standard, Butte

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NTHWQ,

Source: The Montana Standard

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