Anchor may close if it loses power deal

Anchor Glass Container Corp. may close or consolidate if a state contract that allows it to receive relatively cheap electricity expires at the end of the year.

Anchor Glass and 29 other manufacturers across the state - including Gunlocke Co. in Wayland - could be in jeopardy if no ready replacement is found when their contracts with the New York Power Authority end."If the contracts aren't renewed, our company would seriously look at possibly plant closings and plant consolidations," said Michael J. Sopp, general manager of Anchor Glass in Elmira Heights. "There's the potential of the Elmira (Heights) plant being closed."

Anchor Glass has been getting discounted power from the Fitzpatrick nuclear power plant on Lake Ontario in Oswego County. Contracts for the discounted power were signed with the state Power Authority, a quasi-independent branch of state government, before it sold the plant to a private company, Entergy, about five years ago. More contracts expire in the next few years.

With about 400 employees, Anchor Glass is one of Chemung County's largest private employer. It produces more than 2 million glass containers a day for the beer, food and juice industries. About 90 percent of the containers are sold to customers in New York state.

Sopp said the cheap power saves the plant about $1.4 million a year, and could be a fatal blow if that is removed.

"We can't take that hit," he said.

But there is no easy solution to finding cheap electricity to keep costs down for Anchor and other affected companies, an official of the state's largest business association said Wednesday.

"How does the state extend those low-cost power programs when it doesn't have access to that source of relatively low-cost power? That's the key question," said Kenneth Pokalsky of the state Business Council.

Lawmakers and Gov. George Pataki are discussing possibly replacing some of the power with low-cost hydroelectricity from state-owned power plants in Niagara Falls and along the St. Lawrence River.

But business officials there are concerned that shipping any of that power away would erode an important competitive edge.

"There is definitely concern about giving up an asset that has been traditionally delegated to the western New York region," Pokalsky said.

Officials hope to have a solution crafted and a bill adopted before the scheduled start of the Legislature's summer break on June 23, said Brian Vattimo, a Power Authority spokesman.

"We need a program that subsidizes low-cost energy," said Senate Energy Committee chairman James Wright, R-Watertown, Jefferson County.

When asked about a potential source for that energy, he said, "If we had the answer to that, we would share it. We don't have it at the moment."

600450 Anchor may close if it loses power deal
Date: 3 June 2005

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