In one of the largest contracts of its kind for a wholesale power marketer, CNG Energy Services Corporation announced today it has signed a 10-year energy management agreement with Ormet Primary Aluminum Corporation for Ormet's aluminum reduction plant and rolling mill in Hannibal, Ohio. The reduction plant, which is the largest operating aluminum reduction facility in the United States, and rolling mill are currently supplied by Ohio Power under an agreement that will end December 31, 1999.
Electricity is one of the aluminum industry's largest expenses.
It typically accounts for about a third of the cost of production. The management committee and joint power trading desk will ensure that Ormet will be involved in all decisions about its energy requirements. At the same time, Ormet can rely on CNG Energy Services' expertise and resources to ensure that it gets the best available prices and service. We believe this cooperative arrangement not only will provide unprecedented flexibility and service for Ormet, but will also set the pace for energy management agreements across all industries in the years to come. The trading desk will be responsible for all aspects of Ormet's power supply, including acquiring power, arranging for transmission, developing price and risk management strategies to control Ormet's power costs and assuring reliability of the power supply.