Louisville, Kentucky (Platts)--14Dec2012/621 pm EST/2321 GMT

Century Aluminum's plans to restart the long-idled, 170,000 mt/year Ravenswood smelter in West Virginia were dealt a setback by the state's Public Service Commission Friday.

The PSC denied a request to reconsider an October 4 order that rejected the firm's original special electricity rate proposal, which would have forced customers of Appalachian Power, an American Electric Power subsidiary and Ravenswood's long-time power supplier, to shoulder millions of dollars in higher power costs.

Since then, Monterey, California-based Century has submitted two alternative rate plans to the PSC in the hope of winning an acceptable power deal so it can reopen the smelter, which was shuttered in February 2009.

Several parties, including the PSC's consumer advocate, argued the new proposals were still unacceptable because they would require APCo customers to pay for some of the smelter's power costs.

The PSC agreed, adding that Century still could reopen the smelter under certain terms of the October order.

"If Century finds the commission final order unacceptable for purposes of proceeding with its plant reopening," the PSC said. "Century could, guided by the final order and the discussion in this order, begin negotiations with APCo regarding the terms of a new and different special rate contract."

Even if those negotiations fail, Century "always has the option under the statute to file another complaint case with the commission and present its new proposal."

Electricity represents about a third of a smelter's operating costs, and Century has said it will not restart Ravenswood unless it receives a favorable power rate.

Century spokeswoman Lindsey Berryhill said the company was reviewing the PSC's latest ruling.

"We will be prepared to discuss the PSC's decision and how it impacts our restart efforts once we have a more thorough understanding of the order," she said. "In the meantime, we would like to thank the PSC for its hard work in reviewing our request, and we remain steadfastly committed to restarting the plant."

An official with United Steelworkers Local 5668, the bargaining agent for hourly workers at the smelter, said he was unaware of the Friday order.

--Bob Matyi, newsdesk@platts.com --Edited by Keiron Greenhalgh, keiron_greenhalgh@platts.com