HANNIBAL - Hundreds of Ormet Corp. workers and their families must wait to see if the company will continue operations because its electricity rate dispute and bankruptcy case both remain open.
"If Ormet does not come out of bankruptcy by July 31, it has no funding source and will simply run out of cash. Lacking funding, beginning in August, Ormet would have no choice but to reduce the level of operations and ultimately liquidate," the aluminum producer's attorneys wrote in a filing with the Public Utilities Commission of Ohio seeking emergency rate relief from American Electric Power.
"If the relief is not given, then both the employees of Ormet as well as the retirees who depend on the corporation will lose their incomes," Ormet attorneys Howard Petricoff and Stephen Howard wrote to the commission.
But members of the PUCO at its Wednesday meeting denied Ormet's request for emergency relief, so the company will not learn if its power rates will be reduced until the commission's Aug. 27 meeting.
"The financial distress of a single non-utility company such as Ormet does not rise to the level of an emergency," the commission states in a ruling signed by Commissioners Todd Snitchler, Steven Lesser, Lynn Slaby, M. Beth Trombold and Asim Z. Haque.
Ormet's sale to Wayzata Investment Partners is contingent upon reaching an agreement for reduced AEP rates, via PUCO ruling.
United Steelworkers District 1 Director Dave McCall previously said Ormet had only until Wednesday to emerge from bankruptcy to complete its $221 million sale to Wayzata. McCall could not be reached for comment Wednesday, and other USW officials were also unavailable at the St. Clairsville and Clarington offices. The USW represents Ormet's union employees.
"If Ormet is unable to exit bankruptcy by the end of July, it will simply run out of cash and have to drastically curtail operations immediately," company attorneys wrote to the commission.
Ormet company officials could not be reached for comment for this article. Wayzata officials did not respond to a request for comment.
Last summer, Ormet issued a Worker Adjustment and Retraining Notification Act notice regarding the possibility of laying off 998 employees, but the notice expired Dec. 31. At the time, Ormet President and Chief Executive Officer Mike Tanchuk said AEP wanted to raise Ormet's bills by $20 million per year.
As of late Wednesday, the Ohio Department of Job & Family Services website did not show a new WARN notice for Ormet.
According to Ormet's attorneys, the company pays about $66 million in annual wages to workers at the Hannibal facility, along with $1.6 million in local and state taxes.
In July, AEP subsidiary Ohio Power Co. sued Ormet in the same federal court that is hosting Ormet's bankruptcy case, stating the aluminum company still owes $8.9 million worth of unpaid bills. AEP spokesman Jeff Rennie had no comment following Wednesday's PUCO hearing.
Previously, the Washington, D.C.-based Pension Benefit Guaranty Corp. objected to the Wayzata deal, citing Ormet retirement plans that were underfunded by "over $235 million." Prior to Ormet's bankruptcy filing, PBGC officials confirmed Ormet had missed at least $1 million worth of required pension payments.