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Massena businessman resurrecting dam proposal in effort to benefit Alcoa

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MASSENA - Local businessman Thomas Gramuglia is currently seeking support for a plan that he says can help ensure Alcoa maintains a presence in Massena.

Mr. Gramuglia’s plan is for Alcoa to build a power dam in Massena, something that he says would lower the company’s Grasse River cleanup costs from $285 million to $110 million.

“That includes the price of the dam,” he said, adding that he recognizes a similar proposal had been shot down in the past.

“The biggest obstacle we have is getting this by the regulatory authorities,” he said. “The only way we could get that is to get the governor’s support.”

Citing Alcoa’s 2013 financial statement, Mr. Gramuglia said the company’s operating profit across the world totaled $357 million.

One hundred and seventy five million represents 50 percent of the company’s total income from last year,” Mr. Gramuglia said, suggesting the company could use those savings to fund its Massena operations and stockpile aluminum, which it could later sell when aluminum prices increase again.

“If we could save them $175 million it would cover their other costs,” he said, noting the price of aluminum is currently in the neighborhood of 70 cents per pound.

Using numbers obtained from Alcoa company documents, Mr. Gramuglia said that if the price of aluminum were to rise to $1.10 per pound, based on the plant’s production of 84,000 metric tons per year, the aluminum produced and stockpiled during that time would be $813,120,000 in just four years.

Mr. Gramuglia said Alcoa’s cleanup costs would decrease as a result of a dam slowing down the speed of the river and reducing the strength of the cap Alcoa needs to install.

“Massena would save on purchasing power from outside the area,” he said. “Alcoa stays here with 1,000 jobs and can expand its east and west plants. Massena and New York state will have local supply to attract other businesses that require aluminum.”

With the automobile industry starting to use more aluminum, Mr. Gramuglia said this could be Massena’s chance to lure another large industry to the area.

“Without this local supply though we have no chance,” he said.

While Mr. Gramuglia didn’t provide specific data on how much energy a dam would create or how having a local energy supply could lower MED’s costs, he noted the 9 cents per kilowatt hour paid by MED customers in February was “far and away an all-time high.”

Mr. Gramuglia said his proposal was presented on his behalf by Nancy Weller at a recent meeting attended by Massena Mayor James F. Hidy, MED Superintendent Andrew J. McMahon, and local businessmen Eric Gustafson and Tom Post among others.

He said Alcoa’s future in Massena is critical to an economic development effort he is pursuing for property he owns on Route 37 and Route 56.

“It does benefit me if Alcoa doesn’t close,” he said, adding he’s not the only one who would benefit if the plant were to stay open.

But, he said, if Alcoa was to leave Massena local residents could expect tax increases similar to what happened when General Motors shuttered its plant in 2008.

“Once the east plant is gone, trust me, Alcoa will be on the phone with (town assessor) Mike Ward and saying, ‘We’re not operating the plant, we need an assessment reduction,’” Mr. Gramuglia said.

Among those not in attendance at the meeting were representatives from the St. Lawrence County Industrial Development Agency (IDA).

“I’ve seen a lot of jobs leave the north country, and I haven’t seen very many come back,” Mr. Gramuglia said, adding he disagrees with the IDA’s philosophy of trying to lure jobs to the area from Canada.

“We don’t need to become the Mexico of Canada,” he said. “That’s what their vision is and that’s why it’s not working. It’s much easier for us to save these 1,000 jobs than trying to create 1,000 jobs by becoming the Mexico of Canada.”

Mr. Gramuglia said he understands the skepticism, but he has run his idea by a friend of his with deep ties to the aluminum industry. He said that friend gave him a 30 to 35 percent chance of bringing this idea to fruition.

“If you had a 30 to 35 percent chance of winning the lottery you damn sure would buy a ticket, wouldn’t you?” he said, noting he is well aware that a similar proposal had been shot down in the past.

“I would like to sit down with her (DEC Region 6 Director Judy Drabicki) and say we have 1,000 jobs at stake here. We need to push this thing through,” he said. “I think she would be reasonable.”

MED Superintendent Andrew J. McMahon isn’t so sure.

Mr. McMahon said several years ago when MED was teaming up with Alcoa for a proposed power dam project, they had the support of elected officials and they spent a significant amount of money (more than $1 million) on studies to help show the benefits the dam would bring.

“MED and Alcoa looked very long and seriously at putting a dam on the Grasse River. We invested not only time but a significant amount of money researching the possibility. We did this because all parties involved would recognize multiple benefits from building the proposed project,” he said.

“We received support from every elected official we met including our village, town, county, state and federal representatives. More importantly we received support from throughout the community. Students, senior citizens groups, book clubs and business owners – everyone supported the project.”

The only ones who did not support the project were the DEC, FERC (Federal Environmental Regulations Commission) and other environmental regulation agencies, putting a mountain in their way that was simply too high to climb.

“In spite of this support and obvious project benefits, the regulatory mountain became overwhelming. As a result, after more than five years of work we were forced to abandon the project,” Mr. McMahon said.

Alcoa’s Massena spokesperson Laurie Marr echoed Mr. McMahon’s sentiments.

“Several years ago Alcoa worked with MED because we believed their proposed hydroelectric dam might have offered an ice control solution as part of the Grasse River remediation. However, in order for EPA to consider it as part of a remedy, the dam needed to have FERC approval. The MED dam did not have FERC approval and therefore could not be considered for ice control. Alcoa supported MED’s 2010 decision to not pursue the project any further due to escalating costs and regulatory uncertainty,” she said.

Mr. Gramuglia said he’s hoping things could be different this time around.

“There’s no negativity in this plan. We can save their jobs and create electricity that MED badly needs. The only thing that might be upset would be a few eels and I have a solution for that,” he said, referring to the likely disruption of eel habitats, something that had been previously cited by environmental officials as a concern.

Should the DEC allow the project to move forward, Mr. Gramuglia said he would personally pay to build a pond that could be used as an eel raising site.

Massena Mayor James F. Hidy said he supports the proposal and would like to see it come to fruition.

“It’s encouraging to see a member of our business community take up the initiative of resurrecting the dam proposal at a time when anything that’s brought to the table as positive economic development for the area is welcome,” he said.

If there is anything the village can do to help move the proposal forward, Mr. Hidy said he would be glad to help.

“Anything on behalf of the village that we could do to help Mr. Gramuglia gain an audience with state and federal representatives, we will do,” he said.

Mr. Hidy said it’s unfortunate that the DEC and other regulatory agencies would block such a beneficial proposal .

“It’s unfortunate that Region 6 DEC officials, after MED and Alcoa spent millions of dollars on environmental research, still found a way to curtail this project, which would have been a tremendous benefit to Alcoa, the community and our region,” he said.

“There are people within the DEC who will say they never said no to the project, but through countless studies and roadblocks costing millions of dollars, they made it very difficult to continue with the effort and they never said yes. I’ve said countless times these agencies exhibit way too much power and control.”

Mr. Gramuglia said at this point he’s simply seeking support for his plan, something he’s looking for from both unions, additional elected officials and additional businessmen and women from the Massena area.

Then he said the group must sell the proposal to Governor Andrew M. Cuomo.

“We need the governor’s support,” he said, adding it would then be up to governor to help sell the idea to Alcoa CEO Klaus Kleinfeld.

“We need to show humility,” he said, adding in his mind the way to make a deal would be to travel to Pittsburgh, New York City or wherever else Mr. Kleinfeld would like to meet.

“We need to go to him. We can’t expect him to come to us,” he said. “The way to make a deal is we need to break bread together.”

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