Baird, Cantwell Call for McCook Investigation
LONGVIEW, WA- Representative Brian Baird (D-WA) and Senator Maria Cantwell (D-WA) today urged Secretary of Energy Spencer Abraham to investigate whether McCook Metals has met its legal obligations under its electricity remarketing contract with BPA. Baird and Cantwell joined former McCook workers at Longview Aluminum on Saturday to issue their call for an investigation.
The contract allowed McCook to earn $225 million reselling power to BPA in exchange for agreeing to restart the plant and pay its workforce through July 1, 2002. On April 1, 2002, McCook stopped paying its workers and has not announced any plan or timetable to restart the aluminum plant.
"This is turning out to be a story of promises made and promises broken," Cantwell said. "We need this investigation while there is still a chance for McCook to show a good faith effort to restart the plant and to give the workers and this community their due. The public has a right to know the true story of McCook's intentions, what it has done with ratepayer's money, and what legal options are available to hold it accountable."
"I am deeply concerned about both the salaried and union workers employed by McCook Metals. We all -- Senator Cantwell, Senator Murray, and the community of Longview -- need to work together to hold McCook accountable to its obligations under its contract," Baird said.
In a letter to be sent on Monday, Baird, Cantwell, and Senator Patty Murray (D-WA) ask Secretary Abraham to answer the following questions:
· Was the initial sale of Longview Aluminum to McCook Metals predicated on a commitment by McCook to produce aluminum? How does their failure to produce any aluminum impact either their future access to BPA power or their past compensation for curtailment?
· Did McCook accurately represent its intentions to restart the plant in negotiating its current power contracts with BPA? Please detail the extent of BPA’s or DOE’s review of McCook’s financial status prior to entering into the current power contract.
· Did McCook honor its commitment to BPA and workers with regard to the contract’s Section 9 provisions?
· What legal remedies are available to BPA or DOE, to hold McCook accountable to its contractual obligations?
Text of letter follows:
May 18, 2002
The Honorable Spencer Abraham Secretary of Energy 1000 Independence Ave., SW Room 7B-252 Washington DC 20585
Dear Secretary Abraham:
We are writing with deep concerns about the uncertainty surrounding McCook Metals' plans for the Longview Aluminum Plant, including the company's announcement that it will not further compensate its workforce as required in its contract with the Bonneville Power Administration (BPA).
In the spring of 2001, McCook Metals of Chicago purchased this facility, and agreed to a $225 million payment from BPA in order to curtail power delivery through April of this year. In agreeing to curtail deliveries from BPA, McCook entered into a contract stipulating that employees be compensated through July 1, 2002. At the time the agreement was reached, BPA stated that the parties had agreed that McCook would use these revenues to, among other things, "provide full wages and benefits to its employees for the duration of the curtailment." It is our understanding that Section 9 of the contract between BPA and McCook obligates the aluminum company to compensate its employees. This provision is intended to ensure that, to the extent possible, the Pacific Northwest retain a qualified aluminum workforce and modern aluminum manufacturing capacity at times when production has been temporarily curtailed.
As you know, most of the other Northwest aluminum companies shared with BPA 25 percent to 30 percent of their profits from curtailment and remarketing of electricity, to help lower electricity rates in the region during the past year's Western energy crisis. These companies also continued to compensate or employ virtually all their affected employees at full wages during the curtailment period, as required under their contracts with BPA. And, most importantly, many of these companies had the foresight to use a substantial amount of their profits to make investments that would help ensure continued production.
McCook Metals has informed at least some workers that they will not receive full benefits or pay after April 1 and has failed to announce any plans or timetable to restart the aluminum plant. McCook has also failed to fully disclose how it has spent the $225 million in curtailment revenues, which is also required under Section 9 of its contract with BPA.
Given the uncertainty over how these proceeds have been spent and the belief that McCook has violated the spirit of its agreement with BPA, we urge you to conduct an audit of these funds and make the results available to the public. In doing so, we hope you will also answer the following questions:
· Was the initial sale of Longview Aluminum to McCook Metals predicated on a commitment by McCook to produce aluminum? How does their failure to produce any aluminum impact either their future access to BPA power or their past compensation for curtailment?
· Did McCook accurately represent its intentions to restart the plant in negotiating its current power contracts with BPA? Please detail the extent of BPA’s or DOE’s review of McCook’s financial status prior to entering into the current power contract.
· Did McCook honor its commitment to BPA and workers with regard to the contract’s Section 9 provisions?
· What legal remedies are available to BPA or DOE, to hold McCook accountable to its contractual obligations?
Please feel free to contact our staff if you need any additional information. Thank you very much for your consideration and we look forward to your response.
Sincerely,
Maria Cantwell U.S. Senator
Brian Baird Member of Congress
Patty Murray U.S. Senator
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