Alcoa and NYPA's 14-Year Pact Secures Jobs, Green Energy Future for Upstate Plant

Alcoa Corp. (NYSE: AA) has secured a landmark 14-year power supply agreement with the New York Power Authority (NYPA) for its Massena smelting plant, marking a significant step in the company's efforts to modernize its operations and sustain jobs in upstate New York. The deal, announced on Oct. 22, includes a 240-megawatt (MW) allocation of low-cost hydropower through NYPA's Preservation Power program, ensuring stable energy costs for Alcoa's facility through March 31, 2036, with options for two five-year extensions, according to a CNYBJ report.

The agreement is tied to a $30 million capital investment commitment from Alcoa over 10 years, supporting 500 full-time equivalent jobs at the Massena plant. Additionally, the company has pledged $60 million through 2028 to modernize the facility, leveraging a $5.2 million capital grant and $1 million in Excelsior Jobs Program tax credits from Empire State Development (ESD). These investments aim to enhance process stability and operational efficiency, according to New York Gov. Kathy Hochul's office, the report said.

"This agreement ensures Alcoa will continue to be a major presence in Massena while supporting New York families and communities," Hochul said in a statement. The contract builds on a 2019 agreement that provided 240 MW of low-cost hydropower in exchange for retaining 450 jobs. The new pact extends this partnership, with Alcoa also committing to potential $145 million in capital investments over 20 years if market conditions allow, the report noted.

NYPA President and CEO Justin Driscoll emphasized the importance of the deal for the North Country economy, noting that Alcoa has been a "vital part" of the region for over 120 years. The power allocation will support Alcoa's operations through a combination of St. Lawrence-FDR hydropower and other renewable resources, aligning with the company's sustainability goals, the report said.

Alcoa CEO William Oplinger highlighted the strategic value of the agreement, stating that "long-term, competitively priced energy enables Alcoa to proceed with this important investment that will help us meet the demands of today while planning for tomorrow." The company's focus on energy efficiency and modernization reflects broader industry trends as aluminum producers seek to reduce costs and environmental impacts, the report said.

The deal also underscores New York's efforts to attract and retain industrial investments. NYPA's Preservation Power program, which provides low-cost electricity to energy-intensive manufacturers, has been critical in supporting companies like Alcoa. The program's success hinges on balancing economic development with environmental sustainability, a challenge that state officials say the agreement addresses through its emphasis on renewable energy, the report said.