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Cuomo announces Alcoa ready to move forward with Massena facilities’ modernization

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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 Alcoa’s decision as a March 31 deadline approached. The official announcement is scheduled for Monday.

“I just think that’s fantastic news and it’s worth all the effort,” said Ernie J. LeBaff, 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. LeBaff said that he has spent his whole adult life in aluminum and in the labor movement and that without those jobs, the area’s 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 Plant to the company’s facilities. Alcoa’s contract for the hydropower was 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 also is to contribute an additional $10 million toward a North Country Economic Development Fund.

“Alcoa is a mainstay of the north country’s economy and the surrounding vicinity, as the largest private-sector employer north of Syracuse,” Gov. Cuomo said in a press release to accompany the announcement. “New York State is committed to supporting the company’s success as reflected by our partnership for the continued supply of low-cost hydropower. The modernization of the Massena operations will further reinforce Alcoa’s 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 we’re 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 EPA’s 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, EPA Remedial Project Manager Young S. Chang said.

Ms. Chang said the EPA has been consulting with the state’s Department of Environmental Conservation, Department of Health and the St. Regis Mohawk Tribe. The tribe has expressed support for the most thorough plan, but many others feared that mandating such a costly project would sound the death knell for Alcoa’s continued presence in Massena.

According to the governor’s press release, 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 has also 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 on Jan. 1, 2014 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-FDR’s generating output.

Alcoa signed its original contract with NYPA in 1955.

Johnson Newspapers writer Benny Fairchild contributed to this report.

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