KENTUCKY SMELTERS GET RELIEF ON HIGHER RATES

  Owners of two aluminum smelters in
  Kentucky received temporary relief from higher electric rates
  after a decision Tuesday by state regulators denying a rate
  hike to (Big Rivers Electric Corp) of Henderson, Ky.
      But the owners of the smelters, (National Southwire
  Aluminum Co) and Alcan Aluminium Ltd &lt;AL>, said further
  viability of the operations would depend in part upon how the
  rate case is eventually settled.
      "We're hoping for no rate increases but we can't say for
  sure. It's still possible we'll have to close the smelter," a
  National Southwire spokesman said. He said there were other
  variables to consider in any decision whether to close or
  continue the smelter, located in Hawesville, about 60 miles
  west of Louisville.
      National Southwire is owned by National Intergroup Inc
  &lt;NII>, which holds about 55 pct, and (Southwire Co), which
  holds the rest, the spokesman said.
      A spokesman for Montreal-based Alcan said, "The decision is
  48 pages long and is in legal-ese, so it certainly will be a
  long time before we can make a decision" about what it means
  for the Sebree smelter in Henderson, about 100 miles west of
  Louisville. "But we're delighted that Big Rivers Electric was
  denied the requested rate increase."
      A spokesman for the utility, a cooperative that generates
  and wholesales electricity to four distributors, said the
  requested increase was 7.5 mln dlrs a year over 1985 rates.
      The Kentucky Public Service Commission, in denying the
  increase, asked the utility to meet with creditors, which
  include Manufacturers Hanover Corp &lt;MHC> and Irving Bank Corp
  &lt;V>, and the smelters, to renegotiate a rate plan, the utility
  spokesman said.
      The commission suggested that Big Rivers Electric work out
  a flexible rate schedule with the smelters that would index
  their electric costs to the price of aluminum, he said.
      "We have always been amenable to try, as far as we can, to
  assure that the two aluminum smelters remain viable," he said.
      No meetings are scheduled and none have been planned
  between the utility, its creditors and the aluminum plant
  owners. The commission has set a hearing on the rate issue for
  July 28.
  

