Big Rivers moved past loss of Century Aluminum

Jul. 23—In September 2012, Century Aluminum gave Big Rivers Electric Corporation its official notice that it would be leaving their partnership in favor of buying power on the open market.

Bob Berry, Big Rivers president and CEO, acknowledges it was a blow to lose Century, which had two smelters — one in Hawesville and the other in Sebree. The smelters stopped purchasing power in 2013 and 2014, respectively.

"When the aluminum smelters left our system, it was 850 megawatts of excess generation that we had immediately," Berry said. "And that's a tremendous amount. To put it into perspective, OMU's whole system is only 180 megawatts. It would be a city eight times the size of Owensboro that we're talking about."

Although Century was 60% of Big Rivers' revenue, Berry said the energy co-op wasn't caught off guard.

Prior to receiving the notice, Berry said Century was "rattling their saber" about terminating the contract.

"We weren't certain if they were serious or not because they had been saying that for 30 years," Berry said. "But nevertheless, we sat down and created what we called a mitigation plan in case they were to leave."

When Century left Big Rivers, the open power markets were cheaper than its contract with the co-op.

"You could buy power on the market below cost on many hours," Berry said.

By having a plan already in place, Big Rivers began implementing it in an effort to overcome the financial hit.

Berry said "difficult decisions" were made, such as shuttering its Kenneth C. Coleman Station in 2014 — a 443-megawatt, coal-fired power plant in Hancock County that had been producing electricity since 1969.

Big Rivers also began selling excess power to non-co-op members such as OMU and other customers as far away as Nebraska.

"We also put together a very aggressive economic development rate and economic development incentive to try to land new loads in our membership-service territory," Berry said, "and we've been successful at that."

Among those new customers were Nucor, a steel plate mill in Meade County, and Pratt Paper, a paper mill in Henderson County.

And in 2018, the Owensboro City Utility Commission signed a long-term, purchase-power agreement with Big Rivers. Big Rivers began supplying power to OMU in May 2020.

"Our end goal is right-sizing the company where we have the same amount of generation as we have load, meaning customers," Berry said.

And although it's taken most of the 10 years to overcome losing Century, Big Rivers has used the time to diversify its customer base as well as its energy sources.

Big Rivers' generated power comes from 30% coal, 30% natural gas and the rest from hydro and solar sources.

Berry said Big Rivers is no longer reliant on a single industry.

"Now, we're in a position if one industry or one manufacturer is struggling economically, it does not impact Big Rivers," he said.

That success, according to Berry, has allowed Big Rivers to share the positive financial returns with rate members.

"Over the last five years, we've given back more than $60 million in bill credits alone," he said.

Berry said there were many doubters who didn't think Big Rivers would overcome losing Century.

"Everyone thought we would go under," he said. "But we haven't; we survived, and we've come out the other end stronger than we've ever been."

In June, Century announced that it was idling its smelter plant in Hawesville and laying off its 628 employees for nine to 12 months.

According to Century, that will occur the week of Aug. 5.

Don Wilkins, dwilkins@messenger-inquirer.com, 270-691-7299