New York state has approved the long-term hydro power supply agreement between New York Power Authority (NYPA) and aluminium producer Alcoa.
The state Government said its approval of the deal would help to secure employment and investment in the area. Alcoa is the biggest private employer in St Lawrence County and has a long-term plan to expand its production capacity.
The new contract takes effect from 2013 and NYPA will provide 478MW of hydro power over 30 years. There will be 374MW of firm power and the balance will be interruptible power.
Alcoa is to invest US$600M to upgrade its facilities and retain approximately 1000 jobs, and the investment will lead to up to 900 construction jobs.
Under the deal, should employment levels fall then the power supply can be reduced. The contract also allows for the parties to extend their deal for an extra 10 years under certain economic conditions.
Alcoa has recently announced plans to cut global smelting output and cut costs due to economic downturn. However, it noted that its hydro power supply deal recently signed with Hydro-Quebec to 2040 was strategically important.