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Steps continue toward reopening Intalco Works aluminum smelter at Cherry Point

FERNDALE, Wash. — The International Association of Machinists and Aerospace Workers (IAM) Local 2379 announced today, May 19th, that members have ratified a 50year collective bargaining agreement with Blue Wolf Capital Partners (BWCP). BWCP is a New York-based private equity firm that has expressed interest in reopening and modernizing the former aluminum manufacturing plant facility at 4050 Mountain View Road.

The facility was formerly operated by Alcoa Corp. who announced in April of 2020 their plans to “fully curtail” the facility by August of 2020. According to a September 9, 2020, press release from the IAM Local 2379, 621 workers were ultimately laid off as a result.

According to today’s announcement from IAM, “The agreement builds upon the previous collective bargaining agreement with improvements to wages and benefits, quarterly bonuses, and job protections.”

Union officials say highlights of the agreement include:

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  • Improvements in wages, performance bonus plan, paid sick leave, paid vacation, overtime distribution, and new employee starting wages
  • Quarterly retention bonuses
  • Seniority will be honored for previous employees, meaning they don’t have to start over with wages, vacation, etc.
  • Guaranteed equity in the new company; if there is a sale in the future, employees and retirees will get a payout
  • Generous 401(k) contribution and match

Recent efforts to reopen the facility became publicly known in October of 2021 when during a Port of Bellingham Commissioner’s meeting Director of Economic Development Don Goldberg said there were 2 “major companies” who had expressed interest in the Intalco facility. Without naming the companies, Goldberg explained 1 was looking to modernize and reopen the facility and resume aluminum production and another was an American-Canadian joint venture interested in converting the facility into a micro steel mill. He added that such plans were dependent upon Alcoa being willing to sell the facility.

Negotiations with Bonneville Power Administration (BPA), the former electricity provider to the facility, reportedly hit a stumbling block early on when it was determined BPA would not be able to guarantee the rates nor the quantities of electricity previously provided to Alcoa. 

Portland-based BPA is a nonprofit federal power marketer that sells hydropower from 31 federal dams along the Columbia River Basin.

Alcoa’s contract with BPA that allowed them to purchase large quantities of discounted power expired in August of 2019 after Alcoa issued a notice to terminate and began purchasing electricity from the market. This means, according to BPA officials, any new contract with BWCP falls under the same laws and constraints as any other “new direct service industrial customer” would face. These laws, established by the Northwest Power Act in 1980, are intended to protect power availability and price for BPA’s current customers, including public utilities across the Pacific Northwest region.

Whatcom County Executive Satpal Sidhu said in an interview with public radio that the rate Blue Wolf Capital is seeking is about 50% of what BPA is able to offer.

The Public Power Council (PPC), an organization that represents non-profit, consumer-owned electric utilities that purchase power from BPA, issued a statement in March opposing BWCP’s request for low-cost power.

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BPA has no other obligation to contract with Blue Wolf and it cannot provide it with any subsidies that lead to higher rates for the consumer-owned utilities. BPA has a long history of efforts to subsidize the DSIs in response to political pressure and policy arguments similar to those now being advanced by Blue Wolf. The court has repeatedly made it clear that while many of those policy goals – including protecting jobs within the region – are laudable, they are not among the purposes that Congress has authorized BPA to pursue.

All of BPA’s firm power is currently and fully allocated to non-profit, consumer-owned utilities in the Northwest under contracts that run through 2028. BPA does make “surplus” sales, but those are sales of short duration – not the firm, long-term power that Intalco seeks.

Public Power Council statement (March 15, 2022)

Negotiations between BWCP and BPA reportedly are continuing.

An option reportedly available to BWCP is to contract with multiple electricity providers in order to obtain the desired quantity needed.

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In March of 2022, Washington Governor Jay Inslee signed into law an updated state construction budget that included $10 million to make efficiency and pollution reduction improvements to the potlines inside the facility. 

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