September 30, 2008 / 10:35 PM / 11 years ago

Alcoa to sell Sandow 4 power after smelting ends

HOUSTON, Sept 30 (Reuters) - Alcoa Inc (AA.N) said it will attempt to market excess power from Luminant’s Sandow 4 power plant in Milam County once smelting operations cease at its Rockdale facility, an Alcoa spokesman said on Tuesday.

Alcoa will stop making aluminum later this year at the Rockdale smelter because of power supply issues and lay off about 660 workers, the company said Tuesday.

In June, Alcoa idled half the Rockdale plant’s production, citing the high cost of buying replacement power when Luminant’s 545-megawatt, on-site Sandow unit was was shut numerous times for maintenance.

Alcoa and Dallas-based Luminant have squabbled publicly for months over the operation of Sandow 4 and pricing issues.

Alcoa spokesman Kevin Lowery said some operations will continue at Rockdale and the amount of excess power that will be available to the market has yet to be determined.

“Following this curtailment of smelting, Alcoa will continue to pay its cost of generation from Sandow Unit 4 and we will attempt to recover that cost by marketing the power in the Texas energy market,” said John Thuestad, president of Alcoa’s U.S. primary products business, in a statement.

Luminant, a unit of privately held Energy Future Holdings, said Sandow 4 has run smoothly since July, giving Alcoa “no new significant power generation concerns or new pricing issues,” according to a release.

Luminant is building a new 600-MW coal-fired unit at the Sandow site after assuming the air permit from Alcoa in 2007 over the objection of numerous environmental groups.

Reporting by Eileen O'Grady; Editing by David Gregorio

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