Alcoa has committed to investing $42 million to modernize its Massena aluminum production facilities, preserving 900 jobs for the north country, in a deal with the state that guarantees a long-term supply of low-cost electricity from the New York Power Authority.
The critical development, announced by Gov. Andrew M. Cuomo at the close of business Friday, was met with enthusiasm and a huge sigh of relief from community leaders who had been anxiously awaiting Alcoas decision as a Sunday deadline approached. The official announcement is scheduled for today in Massena.
I just think thats fantastic news and its worth all the effort, said Ernest J. LaBaff, who is president emeritus of the Aluminum, Brick and Glass Workers International Union and has worked to bring the deal to fruition.
The agreement between Alcoa and NYPA was a key to keeping the jobs in the north country, he said.
This goes back to the agreement between the county and the Power Authority to have power for the next 40 or 50 years at the best rates in the world, he said.
Mr. LaBaff said he has spent his whole adult life in aluminum and in the labor movement and without those jobs, the areas economy would go flat.
Alcoa will move forward with the next phase of modernizing its operations as part of its contract with NYPA, which will continue the supply of low-cost hydropower from the St. Lawrence-Franklin D. Roosevelt hydroelectric project to the companys facilities. Alcoas contract for the hydropower was set to expire at the end of this year.
Those modernization plans involve a $42 million investment by Alcoa for site preparation and engineering at the Massena East smelter. The company is to contribute an additional $10 million toward a North Country Economic Development Fund.
Alcoa is a mainstay of the north countrys economy and the surrounding vicinity, as the largest private-sector employer north of Syracuse, Gov. Cuomo said in a released statement to accompany the announcement. New York state is committed to supporting the companys success as reflected by our partnership for the continued supply of low-cost hydropower. The modernization of the Massena operations will further reinforce Alcoas commitment to the region and secure their long-term future, so that we can keep good jobs here in the north country.
The importance of Alcoa to the regional economy was reiterated by Massena Town Supervisor Joseph D. Gray.
Alcoa has been here for more than 110 years and were anxious for the company to write its next chapter here, Mr. Gray said Friday evening. The modernization of the East plant will mean the immediate creation of construction jobs and influx of money into our economy. Even more important is the long-term security of the jobs at the plant.
If Alcoa had failed to meet the deadline, its contract for low-cost power would have been up for review, according to NYPA officials.
One more hurdle remains, as Alcoa still must receive approval from the U.S. Environmental Protection Agency for the proposed remediation plan to clean up the Grasse River. The EPAs decision is expected in April. That carries an estimated price tag of $245 million, a cost for which Alcoa is liable.
Other proposals for the cleanup range from a less extensive $114 million option to a $1.3 billion project, said EPA Remedial Project Manager Young S. Chang.
Ms. Chang said the EPA has been consulting with the state departments of Environmental Conservation and Health and the St. Regis Mohawk tribe. The tribe has expressed support for the most thorough plan, but many others feared mandating such a costly project would sound the death knell for Alcoas continued presence in Massena.
According to the governors released statement, under a 2008 long-term power supply contract, Alcoa has committed to a total investment of $600 million to modernize its Massena operations in return for low-cost hydropower. The company also has agreed to fund economic development in St. Lawrence, Franklin, Essex, Jefferson, Lewis, Hamilton and Herkimer counties and on the Akwesasne Mohawk Reservation.
Service under the new contract will start Jan. 1 and extend 30 years to 2045, with an additional 10-year option to extend service beyond 2045.
Alcoa will receive 478 megawatts of power under the new contract approximately 60 percent of St. Lawrence-FDRs generating output.
Alcoa signed its original contract with NYPA in 1955.
The Alcoa project will have a profound impact on the region, said Assemblywoman Addie J. Russell, D-Theresa, on Friday night.
We need good news and this is fantastic news for the community and its economic future, she said. This is bigger than any of us can really conceive of right now. I dont think any of us can really capture what this will mean for a community thats just been hanging on through the recession.
Johnson Newspapers writer Benny Fairchild contributed to this report.