Smelting Plant Pins Hopes on Power Play

Costs of Aluminum Business Prompt Move for Nearby Electricity Supplier

Joe Kazadi, the works manager at Alcoa's Eastalco smelter plant in Frederick County, holds a graph in his hands. The graph shows a jagged red line that represents the cost of smelting aluminum around the world, including at the Eastalco Aluminum Co.'s complex in the county.

The red line is climbing sharply, like the plotline of a dramatic story moving to its climax -- and, in a sense, that's what it is.

If Eastalco's costs continue growing, Alcoa might be tempted to shut the plant after more than 34 years of operation, Kazadi told reporters last week during a tour. Such a fate befell a North Carolina smelter whose place on the jagged red line was next to Eastalco's last year.

So among several strategies to help keep Eastalco profitable, its officials have teamed with a major utility to propose building a 600-megawatt power plant near Adamstown. The relationship that Eastalco and San Diego-based Sempra Energy Resources now envision would be as landlord and tenant. But Eastalco officials say that having a power plant next door to the smelting operation also offers the hope of a secure, profitable future. The single largest cost in smelting aluminum is electricity.

"We are fighting every day to stay alive," Kazadi said, adding that there are no immediate plans to close the plant or lay off employees, as the company did last year. He called the power plant "very crucial" for Eastalco's future.

"Having them around us gives us that level of comfort that we have, that hope for the future," Kazadi said. "We can't overplay the relationship. But we want them here."

The proposed power plant, however, has shaken the comfort level among people who live near Eastalco's 2,200-acre property in southern Frederick County. Although some say Eastalco has been a good neighbor, several residents also said that, no matter how clean the natural gas-fired power plant might be, it would still dump more pollution into an environment already dirtied by Eastalco and other heavy industries.

People who live in the vicinity of the smelter were already given the jitters by an Environmental Protection Agency report last month that showed -- erroneously, as it turns out -- that Eastalco's toxic emissions had nearly quintupled last year.

"Do we really need a [new] power plant there?" asked Rolan O. Clark, 65. Other residents noted that several smokestack industries do business in the vicinity, including Essroc Cement Corp. and Trans-Tech Inc. Just downstream on the Potomac River in Dickerson is an 853-megawatt power plant owned by Atlanta-based Mirant Corp.

Donald L. James, an Adamstown resident who opposes the plant and has set up a Web site, said he understands Eastalco's position. "From Alcoa's point of view, this makes perfect sense. If I were in their shoes, I would do it, too," he said. "I don't want the [aluminum] plant to go away. It's too many jobs. It's good for the community. They've been good to the community in the past."

But, James said, even if the power plant is built, neither Alcoa nor Eastalco can guarantee that the smelter plant would not close. James, 42, a network engineer for a government contractor, said he also worries that a new power plant could raise the noise level and pose a danger of possible explosions, along with the environmental concerns.

"My position is simple: Until it's proven to me that the plant is safe for my children and my neighbors, I will oppose it," James said.

Catoctin Power, a subsidiary of Sempra Energy Resources, filed its application with the Maryland Public Service Commission on Feb. 25 for a 600-megawatt plant about eight miles south of the city of Frederick. The plant would generate enough power to supply about 600,000 homes, according to the application. If approved, it would be built on 20 acres of leased property next to the Eastalco plant, which takes up about 400 acres of the company's property.

Sempra Energy Resources, a unit of Sempra Energy Corp., has told the Public Service Commission that Eastalco also has an option to purchase up to a 50 percent interest in the power plant. State and company officials said the Eastalco plant is Maryland's largest consumer of electricity, which is essential to the process of making aluminum.