The Alcoa Intalco Works aluminum smelter west of Ferndale is getting another short extension of its crucial power supply contract with the Bonneville Power Administration while talks continue on a longer-term deal.
The announcement about the new extension through the end of July 2012 came just three days before the expiration of the last temporary extension, which had been scheduled to expire at the end of this month.
The smelter needs an ample supply of affordable electric power to produce aluminum while providing paychecks to about 620 smelter employees.
Intalco spokesman Josh Wilund said the company remains optimistic about the likelihood of reaching a longer-term deal.
"We're just working through some of the details that need to be addressed," Wilund said.
BPA spokesman Mike Hansen expressed a similar view.
"We remain optimistic that we can reach a long-term power sales contract with them," Hansen said.
Asked how long the term might be, Hansen repeated earlier estimates that the new deal could be for as long as 10 years.
"That's the outer range of what we're talking about," Hansen said.
Hansen also noted that once BPA and Alcoa negotiators agree on the terms of a power deal, that deal would be released for public comments and possible objections before it becomes final. In past years, some of the public utility districts that also rely on lower-cost BPA power have questioned the sale of large quantities of that power to the aluminum industry, but at this point those objections appear to have died down.
Intalco is negotiating the sale of about 300 megawatts of power - an amount equivalent to about one-fourth of the power supply of Seattle City Light.
BPA executives, backed by Gov. Chris Gregoire and other elected officials, have argued that providing that power to Intalco makes good economic sense, since the smelter is believed to create another 1,500 indirect jobs in addition to its direct employment of 620.
The Intalco smelter, which began operating in 1966, is among the last in a region where the industry once flourished, thanks to abundant hydropower from federal dams. But many smelters shut down in the past 10 years as regional power demands increased and prices rose.
Pittsburgh-based Alcoa is the world's largest aluminum producer, with 200 locations in 31 countries, according to the company website. The Intalco smelter represents about 6 percent of Alcoa's worldwide aluminum-producing capacity, the website indicates.