Deal to Keep Alcoa Means Second Break on Power

Deal to Keep Alcoa Means Second Break on Power

Posted: Updated:

The deal to keep 600 Alcoa jobs in Massena is even more generous than was obvious Tuesday.

When Governor Cuomo announced the deal at the Massena West plant Tuesday morning, he said the state would give Alcoa $38.8 million to "modernize" and help the Massena West plant operate, through the Empire State Development Corporation.

On top of that, the New York Power Authority is giving Alcoa $30 million in savings for the electricity Alcoa buys from the state-run power dam in Massena.

What was not obvious Tuesday was that $30 million is in addition to the already generous discount Alcoa gets from the state for power. A Power Authority spokesman confirmed that for 7 News Wednesday.

The Power Authority won't say what rate Alcoa is paying - it calls the information 'proprietary' - though historically, the Power Authority has sold electricity to Alcoa at a 40 percent discount off wholesale price.

The spokesman said Alcoa is paying for the electricity - the state isn't literally giving away the power.

(The state also says the price of electricity will go up if the price of aluminum goes up.)

Alcoa has repeatedly benefited from a series of state and federal deals, of which Tuesday was just the latest, while at the same time reducing the number of jobs it guarantees in Massena - from 900 in 2008 to 750 in 2014 to 600 now.

Since 2013:

- Alcoa has gotten a deal worth a billion dollars in savings for the clean-up of the Grasse River, which the company polluted for decades.

- With the price tag of cleaning up the Grasse now at $243 million, Alcoa has reportedly applied to a state fund which subsidizes companies for pollution clean-up.

- When the company abruptly closed the Massena East part of its operations, throwing 300 people out of work in Massena, the state agreed to not only continue selling power to Alcoa at a discount, but to keep on reserve all the electricity Alcoa had originally committed to using.

- In addition, the state agreed to temporarily waive two fees, which was worth millions to the company.

Tuesday also marked the first time the state has said it will impose penalties if Alcoa fails to live up to its end of the deal: $40 million if employment drops below 'approximately 600' for the next three and a half years.

The potential problem with enforcing that: Alcoa has 220 jobs at Massena that were not going to be touched when Massena West shut down. Presumably, Alcoa could pull those remaining jobs if the company believed the state was acting in a hostile manner.

Tuesday's deal was universally hailed in Massena and northern New York, which faced a devastating job loss. As you got further from the deal, you could find other opinions.

A syracuse.com story Tuesday quoted Greg LeRoy, an analyst for the group "Good Jobs First" as saying "This is terrible policy."

"Where does it end?" he told syracuse.com. "Good Jobs First" already had listed the state's deal with Alcoa as the second most expensive subsidy to an industry in the entire country, and that was before Tuesday's announcement.

(See the list of largest deals here and read more about some of the big deals companies have gotten here.)

Conservative critics were no kinder. E.J. McMahon, from the "Empire Center" group said "The potential closing of Alcoa wasn't his (Cuomo's) fault."

But McMahon told syracuse.com "But what you can blame on him, and his predecessors, is endlessly throwing money at them."

- by Scott Atkinson

 

 

 

 

 

Powered by Frankly
All content © Copyright 2000 - 2019 Frankly Media and WWNY. All Rights Reserved. For more information on this site, please read our Privacy Policy and Terms of Service.