‘Just the beginning:’ Bevin speaks at Braidy Industries groundbreaking
Correction: The initial online version of this story stated that construction of the power line project had been halted by the PSC until Braidy provided required written assurance that sufficient financing has been secured to complete construction of its planned facility. The main construction phase of the project isn’t scheduled to begin until the first quarter of 2019, so work on pre-construction activities continues to move forward without the written assurance required by the PSC.
Kentucky regulators have issued an order that would require the company behind a proposed $1.68 billion aluminum mill near Ashland to give written assurance of its financial viability before additional power lines can be built to the site.
The order, filed by Kentucky’s Public Service Commission last month, came after news reports in September that Braidy Industries still needed $400 to $500 million of financing before it could begin construction.
Officials have touted Braidy Industries as a company that will bring hundreds of jobs to northeastern Kentucky and transform the region’s faltering economy.
The order conditionally approves Kentucky Power’s $22.4 million plan to build a 2.5 mile power line to the site, but construction can’t start without “reasonable assurance in writing from Braidy Industries that sufficient financing has been secured to complete construction of its planned facility.”
The order does not include a deadline. The power line project would take about two years to complete, a Kentucky Power spokesperson said.
PSC spokesman Andrew Melnykovych said in an email to the Herald-Leader that the order is meant “to ensure that Kentucky Power’s ratepayers would not be at risk of incurring costs in the event of a delay or other unforeseen complication in the Braidy Project.”
“The PSC has no indication of any such problem with the project, and the language should not be construed in that fashion,” Melnykovych said. “There is nothing in the case record to indicate that Braidy might not obtain financing.”
The company submitted filings to the U.S. Securties and Exchange Commission in September that showed Braidy still needed nearly half a billion dollars before it could begin construction.
Jaunique Sealey, Braidy’s executive vice president for business development, said the aluminum mill project is moving along as planned, though the company has yet to submit its letter of assurance.
“The PSC order is in the ordinary course of our ongoing work with Kentucky Power to upgrade the power delivery lines to our EastPark property in anticipation of the need for increased power supply to support manufacturing operations,” Sealey said in a written statement. “We remain on critical path for each of our three companies, Braidy Atlas, Veloxint, and NanoAI.”
Braidy Atlas is the subsidiary that plans to build the aluminum mill. Veloxint describes itself as a “developer of nanocrystalline metal alloys with transformational properties.” NanoAl describes itself as being “dedicated to design, develop and commercialize high-performance aluminum alloys based on scientifically-designed nanostructures.”
In the meantime, Kentucky Power will continue with pre-construction preparation work on the project, said Allison Barker, spokeswoman for Kentucky Power.
Barker said letters of assurance about financing are common for large projects, such as the line extension to Braidy’s site. Because Braidy has sought financing from government loans, though, that process has been delayed, she said.
Company officials have promised about 1,000 construction jobs and more than 600 full-time jobs once the mill opens, which is planned in 2020. Craig Bouchard, Braidy’s CEO and board chairma, said the mill will “transform Appalachia with technology.”
Counties in northeastern Kentucky have some of the highest unemployment rates in the state. The availability of coal jobs in counties to the south has declined dramatically in recent years, and three years ago, AK Steel, one of the region’s major employers, laid off more than 600 workers.
Gov. Matt Bevin has been an avid supporter of the Braidy project, saying the company’s decision to locate in Eastern Kentucky “has the potential to be as significant as any economic deal ever made in the history of Kentucky.”
Despite limited public knowledge of the project’s financial viability, state officials have approved major incentives for the company, including $10 million in tax incentives and an unusual $15-million equity investment that makes all Kentuckians partial owners of Braidy Industries.
Last month, Kentucky’s Energy and Environment Cabinet announced it will use a $4 million Abandoned Mine Lands grant to help build concrete support piers and columns at Braidy’s proposed construction site.
Nickie Smith, chairwoman of the EastPark Industrial Park, said the additional power line would help attract new, larger businesses to the park and provide a backup source of power during outages.
“It’s just another leg to the infrastructure that we need,” Smith said.