Alcoa to invest $42 million for modernization of former Massena Reynolds facility, $10 million into local economic development fund
MASSENA – As expected, 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).
Lieutenant Governor Robert J. Duffy, joined by local elected officials, made the announcement on behalf of Gov. Andrew Cuomo Saturday at Alcoa's Massena East smelter.The next phase of modernizing the former Reynolds Metals facility 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.
The agreement is part of a long-term agreement to protect a minimum of 900 jobs at the aluminum production facilities.
The company’s decision to proceed with the next phase of modernization heralds the potential construction of a new aluminum production potline, Cuomo said. 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.
“As a longtime resident of Massena, I know full well the importance of Alcoa to the North Country’s economic future," said Judge Eugene L. Nicandri, a NYPA trustee. “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."
Chris Ayers, Alcoa Executive Vice President and President of Global Primary Products, said “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."
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.
State senators Joe Griffo and Patty Ritchie and Assemblywoman Addie Russell were understandably pleased by the announcement.
"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,” said Griffo. “Today we're seeing commitment and investment coming together to help keep this employer here for at least another generation.”
Said Ritchie, “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."
Added Assemblywoman Russell, “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. “