Owners of two aluminum smelters inKentucky received temporary relief from higher electric rates
after a decision Tuesday by state regulators denying a rate
hike to (Big Rivers Electric Corp) of Henderson, Ky.
    But the owners of the smelters, (National Southwire
Aluminum Co) and Alcan Aluminium Ltd &lt;AL>, said further
viability of the operations would depend in part upon how the
rate case is eventually settled.
    "We're hoping for no rate increases but we can't say for
sure. It's still possible we'll have to close the smelter," a
National Southwire spokesman said. He said there were other
variables to consider in any decision whether to close or
continue the smelter, located in Hawesville, about 60 miles
west of Louisville.
    National Southwire is owned by National Intergroup Inc
&lt;NII>, which holds about 55 pct, and (Southwire Co), which
holds the rest, the spokesman said.
    A spokesman for Montreal-based Alcan said, "The decision is
48 pages long and is in legal-ese, so it certainly will be a
long time before we can make a decision" about what it means
for the Sebree smelter in Henderson, about 100 miles west of
Louisville. "But we're delighted that Big Rivers Electric was
denied the requested rate increase."
    A spokesman for the utility, a cooperative that generates
and wholesales electricity to four distributors, said the
requested increase was 7.5 mln dlrs a year over 1985 rates.
    The Kentucky Public Service Commission, in denying the
increase, asked the utility to meet with creditors, which
include Manufacturers Hanover Corp &lt;MHC> and Irving Bank Corp
&lt;V>, and the smelters, to renegotiate a rate plan, the utility
spokesman said.
    The commission suggested that Big Rivers Electric work out
a flexible rate schedule with the smelters that would index
their electric costs to the price of aluminum, he said.
    "We have always been amenable to try, as far as we can, to
assure that the two aluminum smelters remain viable," he said.
    No meetings are scheduled and none have been planned
between the utility, its creditors and the aluminum plant
owners. The commission has set a hearing on the rate issue for
July 28.
 Reuter
