NY: Alcoa to Invest $52M for Next Phase of Massena Facility Modernization

2 Apr, 2013

Governor Andrew M. Cuomo announced that Alcoa, a leading producer and miner in the aluminum industry, is prepared to move forward with the next phase of modernizing its Massena operations. The upgrade is called for under a contract with the New York Power Authority (NYPA) for the continued supply of low-cost hydropower from the St. Lawrence-Franklin D. Roosevelt Hydroelectric Plant as part of a long-term agreement to protect a minimum of 900 jobs at the aluminum production facilities.

Alcoa is planning to invest $42 million for site preparation at the Massena East smelter and to provide an additional $10 million toward a North Country Economic Development Fund (NCEDF). The company’s decision to proceed with the next phase of the modernization of the former Reynolds Metals facility heralds the potential construction of a new aluminum production potline, for which work is expected to begin in June.

Alcoa’s modernization project is subject to receipt of an approval by the U.S. Environmental Protection Agency for a proposed remedial action plan for cleanup of the Grasse River. The EPA’s decision is expected in April.

“Alcoa is a mainstay of the North Country’s economy and the surrounding vicinity, as the largest private-sector employer north of Syracuse," Governor Cuomo said. “New York State is committed to supporting the company’s success as reflected by our partnership for the continued supply of low-cost hydropower. The modernization of the Massena operations will further reinforce Alcoa’s commitment to the region and secure their long-term future, so that we can keep good jobs here in the North Country."

“Thanks to the leadership of Governor Andrew Cuomo, U.S. Sen. Charles Schumer and many other government officials, employees, union leaders and community members, we are ready to take this important step toward modernizing our Massena facilities," said Alcoa Executive Vice President and President of Global Primary Products Chris Ayers. “Modernizing Massena will help us move farther down the aluminum cost curve and secure Alcoa’s place as a vital part of the North Country’s economy for decades to come."

“The modernization of the Massena East plant is a consequential and much anticipated initiative," said John R. Koelmel, NYPA chairman. “It’s going to mean a huge capital investment by Alcoa to reinforce its strong ties to Northern New York, and it will contribute to the efforts led by Governor Cuomo to renew Northern New York’s economy.The Power Authority is proud to be a full partner in this endeavor."

“Under Governor Cuomo’s leadership, New York State is fully supportive of the measures by Alcoa for the modernization of its Massena operations," Gil C. Quiniones, NYPA president and chief executive officer, said. “The progress toward this major undertaking highlights the extraordinary value of St. Lawrence-FDR hydropower in the company’s investment decisions. The Power Authority is delighted to be playing a crucial part for ensuring a bright future for aluminum production in Northern New York and to further economic development in the region."

“As a longtime resident of Massena, I know full well the importance of Alcoa to the North Country’s economic future," Judge Eugene L. Nicandri, a NYPA trustee, said. “The modernization of Massena East is a major initiative for revitalizing the region and ensuring that Alcoa will remain an integral part of our economy for many years to come."

Under the long-term power supply contract agreed to in 2008, Alcoa must invest a minimum of $600 million to modernize its Massena operations, in return for the low-cost hydropower. Alcoa also agreed to fund the NCEDF for economic development in St. Lawrence, Franklin, Essex, Jefferson, Lewis, Hamilton, and Herkimer counties and on the Akwesasne Mohawk Reservation. The company would establish the fund by June, with the money to be administered by NYPA and another entity specified by New York State.

Service under the new power supply contract commences on January 1, 2014, when the current contract expires, and extends to 2045. It includes an additional 10-year option to extend service beyond 2045.

Alcoa signed its original contract with the Power Authority in 1955, more than three years before St. Lawrence-FDR, the Authority’s first generating facility, began producing electricity.

The hydropower that Alcoa will receive under the new contract—478 megawatts of firm and interruptible power—corresponds with approximately 60 percent of St. Lawrence-FDR’s generating output.

Senator Joseph Griffo said, "This deal agreement is welcome news. We know that the worldwide aluminum market continues to be competitive and we're pleased that Alcoa is ingrained to the Massena community. Today we're seeing commitment and investment coming together to help keep this employer here for at least another generation. I commend Chairman Koelmel, NYPA President Quiniones, and Lieutenant Governor Duffy for staying the course for Northern New York's economic development and I thank the executives and hardworking employees of Alcoa for their dedication."

Senator Patricia Ritchie said, “The modernization of the Massena East smelter will further secure Alcoa’s future in the North Country in the decades ahead. I’m delighted that the company is at the onset of proceeding with this undertaking in allotting substantial funding for site preparation and engineering. This is a wonderful development for our region and a reflection of New York State’s strong partnership with the company and of being vested in its success."

Assemblywoman Addie Russell said, “I can think of few things more important to our region than the upgrade of the Massena East plant. This will secure Alcoa’s future in Northern New York for decades to come, protecting hundreds of jobs and major economic benefits. None of this would have been possible without New York State’s commitment for the long-term supply of St. Lawrence hydropower.