The Willamette River Case: Gains 249 



As an example, assume that our hypothetical 80,000-kilowatt 

 hydroelectric development is available to support 40,000 tons of 

 annual aluminum reduction in the Northwest. At annual costs of 

 about $1.5 million, this federally developed power would be avail- 

 able at the bus bar for about 2.25 mills per kilowatt-hour; an addi- 

 tional half mill may be considered an appropriate transmission 

 charge. An alternative source might conceivably be a privately 

 developed thermal source in the coal-rich Ohio Valley, available 

 to the aluminum industry at about 4 mills per kilowatt-hour.^" 

 For an aluminum producer turning out 40,000 tons of metallic 

 aluminum annually, there would be a difference in the power bill 

 amounting to about $900,000. Only part of this difference would 

 accrue to the aluminum producer, however, for transport costs 

 involved in assembling his raw materials would reduce the amount 

 of his gains. Delivered prices on alumina drawn from Gulf Coast 

 refining operations for the Northwest reduction plant would exceed 

 corresponding costs for assembling supplies for an Ohio Valley 

 reduction mill." For 80,000 tons of alumina required for 40,000 

 tons of annual aluminum reduction, there would be a $258,400 

 difference in freight charges. Assembly costs of carbon require- 

 ments would also differ. Approximately a half ton of petroleum 

 coke and 252 pounds of binding material are required per ton of 

 aluminum. An Ohio reduction mill could draw on a Chicago 

 source of supply for petroleum coke and obtain the required coal 

 tar pitch from Ironton, Ohio, at considerable savings in freight 

 charges over drawing on a Wilmington, California, source for 

 petroleum coke and on St. Paul for the binding material — the 

 sources of supply for a Northwest reduction plant.^^ Taking the 



^^ This abstracts from the possibility that these Ohio plants may be undertaken 

 with the aid of certificates of necessity, which would permit more favorable 

 rates for power associated with the gains from rapid amortization privileges. 



" Rates on alumina from Gulf Coast to Northwest points are taken at $9.73 

 per ton, while rates on movements from Gulf Coast to Ohio Valley points are 

 estimated to be in the neighborhood of $6.50 per ton. See Railway Tariffs, T.C. 

 1-A and S.F.A. 817-A. 



" Petroleum coke used by the aluminum industry is produced by the Great 

 Lakes Carbon Corporation's plants in Chicago; Port Arthur, Texas; and Wil- 

 mington, California. Binding material for the coke comes principally from the 

 Allied Chemical and Dye Corporation and the Koppers Company plants. Plants 

 of the two firms producing coal tar pitch binding materials are located in 



