Electric Costs Doom Ohio Steel Mill
Fri, 02/22/2008 - 5:29am
COLUMBUS, Ohio (AP) — One of two steel mills proposed for Ohio appears to have fallen through because of the uncertain future of Ohio's energy market, according to a consultant working with the mill's backers.
Steel Development LLC, a consortium of American and European steel executives, was exploring whether to build a $1 billion scrap-based steel mill that uses electric arc furnace technology in Ohio. But an inability to estimate its long-term electricity costs has prompted the company to look elsewhere.
''The fact of the matter is, in order to make the investment, we need entities to be able to tell us over a multiyear period what our cost of power might be,'' said David Stickler, managing director of Global Principal Partners LLC, a consultant to Steel Development.
Word that Steel Development apparently has ruled out Ohio came just as House Speaker Jon Husted, a Republican from Kettering, was laying out his plans to handle a sweeping energy proposal that will rewrite Ohio's rules for regulating power companies. The bill was introduced by Gov. Ted Strickland last year and passed by the Ohio Senate Oct. 31.
The mill would have employed an estimated 500 people. Investors wanted to make flat-rolled steel to be used for U.S. infrastructure needs.
Strickland said Steel Development's decision was a reminder that Ohio needs to finish its work on the energy plan.
''We should have been able to give that company that information,'' Strickland said Thursday. ''If this bill had passed expeditiously, as I had asked, if it had been dealt with in a timeframe that I think was appropriate, we may have saved this $1 billion investment.''
Lt. Gov. Lee Fisher, Ohio's development chief, said he still considers Ohio to be the front-runner for a second steel plant project that Russian company MMK Steel is considering building in Scioto County along the Ohio River. He expects a decision later this year.
The loss of Steel Development is only the latest blow to Ohio's struggling manufacturing sector. In December, Ohio lost out to Virginia on expanded operations by Rolls-Royce North America. The facility would have been located on a site in Van Wert once pitched to, and rejected by, Honda Motor Co.