Investment firm in talks with BPA for power contract that could reopen Whatcom’s Intalco
Discussions are taking place on power for the curtailed Intalco Works facility, but it is unclear yet whether an agreement can be reached that would reopen the facility.
The Bonneville Power Administration is in discussions with Blue Wolf Capital Partners LLC about supplying power to the aluminum smelter near Ferndale.
Doug Johnson, a senior spokesperson for BPA, confirmed that agency staff have talked with Blue Wolf representatives. Blue Wolf’s interest in the Intalco facility was first reported in The Northern Light.
“We are continuing discussions, but BPA has made no decision regarding potential service, contract terms and conditions or BPA’s involvement in electric service to the plant,” Johnson said in an email to The Bellingham Herald.
Blue Wolf would need to work out a deal not only with BPA, but also with Alcoa in order to restart the facility, said Don Goldberg, director of economic development for the Port of Bellingham. Goldberg recently made a short presentation to the state legislature to voice approval for a proposal to provide state funding that would help bring in new equipment that would run the facility more efficiently and significantly cut carbon dioxide emissions.
Reopening the facility could bring back around 700 manufacturing jobs to Whatcom County. The facility closed in the summer of 2020 because of declining conditions in the aluminum market.
Blue Wolf did not immediately respond to a request for comment on Thursday, Jan. 27. The New York City-based company says on its website that it invests in different business situations and industries, including health care, oil and paper manufacturing.
Can a power agreement be reached?
Past power agreements between Alcoa and BPA were often contentious, with many deals being struck close to the deadline to avoid a shutdown of the smelter.
Aluminum smelters use a lot of power, so negotiating power price is key to profitability. In the last contract, BPA and Alcoa reached a 10-year agreement in 2012. An amendment was added to the contract in 2016 to keep the facility operating as the company dealt with an oversupply on the global market that led to a drop in aluminum prices.
With no power contract currently in place for the facility, Blue Wolf will be negotiating under a different circumstances. According to its website, BPA provides power to about 28% of the electrical power in Pacific Northwest, selling the power to cover its cost as a self-funded federal agency. It is unclear how much extra power it would be willing to sell and at what price.
Goldberg, who is not involved in the negotiations, doesn’t have a sense of how the contract process is going.
“But I do believe Blue Wolf is very real and wants to move forward,” Goldberg said.
Last fall it was reported that there were two companies in the running to try and take over Intalco, the second being a steel mill proposal that focused on recycled material. Goldberg told The Northern Light newspaper that the steel company is not as far along as Blue Wolf in making a deal for the facility.
This story was originally published January 27, 2022 at 5:48 PM.
