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Article published Friday, August 22, 2003
Businesses face rate hikes, closure as utility struggles
to meet demand
Walbridge steel firm
chooses shutting down over paying up
By GARY T.
PAKULSKI
BLADE BUSINESS WRITER
At least one Toledo-area factory shut down
yesterday and others faced steep temporary rate increases as
FirstEnergy Corp. tried to cope with heat and the lingering
aftermath of last week’s massive blackout.
Struggling to meet
demand for electricity, the Akron-based utility gave heavy energy
users on special contracts the option of closing or paying higher
rates linked to the cost of electricity on spot markets. Businesses
agree to the arrangement in exchange for cheaper rates during normal
periods.
"We’re operating, but we’re just paying more for our
power," said Rich Menzel, spokesman for a steel mill in rural Delta
operated by North Star BHP Steel.
If supplies deteriorate
further, the mill has been advised that it may have to close
temporarily, Mr. Menzel said. That happened last Friday, the day
after the blackout, when the firm suffered $1.5 million in lost
production.
Businesses in Cleveland on so-called
"interruptible service" were asked to shut down about 2 p.m.
yesterday, said Mark Durbin, a FirstEnergy spokesman.
It was
the second day that FirstEnergy took special measures to conserve
energy.
Utility officials on Wednesday asked residential
customers to use fans instead of air conditioners and wait until
evening to use heavy appliances like dishwashers.
Rolling
blackouts might be necessary in the Cleveland area without the
moves, FirstEnergy warned.
The problem is that two of its
nuclear power plants that produce 17 percent of its generating
capacity are shut down.
The firm’s Perry nuclear plant was
shut by the blackout, but is expected to return to service "in the
next day or so," Mr. Durbin, the spokesman, said.
About 50
million people from New York to Toledo, Detroit, and Toronto were
affected by the blackout that began last Thursday and is believed to
have started in the Cleveland area.
The Davis-Besse Nuclear
Power plant, near Oak Harbor, has been out of commission for 18
months because of a corroded nuclear reactor head.
That
facility normally produces 883 megawatts of electricity, or 7
percent of FirstEnergy’s total output.
The wholesale cost of
electricity on spot markets has soared by more than a third since
the blackout. It rose 8 percent to $64 a megawatt in Ohio earlier
this week.
Besides reduced generating capacity and high
prices on spot markets, FirstEnergy had to cope with increased
demand yesterday as customers cranked up air conditioners as
temperatures soared into the high 80s.
Ellen Raines, another
FirstEnergy spokesman, wouldn’t say how many businesses are on
interruptible service contracts.
Ending the flow of
electricity to them would reduce demand by 700 megawatts or nearly
the production of Davis Besse.
She was unsure if the firms
would be affected today.
Participants are free to resume
normal operations at night, after 11 p.m., when electricity usage
falls.
MSC Walbridge Coatings, a steel processor in
Walbridge, opted not to pay the higher rates and was closed
Wednesday and yesterday.
About 150 workers were affected,
plant manager Tom Bishop said.
"We hope to operate tomorrow -
we need to," he said.
Ford Motor Co.’s parts plant in Maumee
is on interruptible service, but operated Wednesday and yesterday,
said Rich Voytowich, a spokesman in Dearborn, Mich. He was
unfamiliar with details of the arrangement.
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