Proposed Big River Steel Mill Gives Community ‘Reason to Exist'

by Jan Cottingham  on Monday, Feb. 11, 2013 12:00 am  

The site is also near a 500-kilovolt Entergy Arkansas transmission line. And while Correnti placed the availability of electricity in his top tier of must-haves for a steel mill, Chitwood went further.

Entergy’s role “was absolutely crucial because in this type of steel mill, it’s like real estate: location, location, location,” he said. “At the end of the day: the price of electricity, the price of electricity, the price of electricity.”

Tennille echoed Chitwood’s assessment of the importance of Entergy’s cooperation. He noted that because Mississippi had bested Arkansas in 2005 in its competition for what became the Severstal mill, getting Entergy on board was vital.

“Because of that, the very first thing [the Big River developers] said to us when they called was ‘We want to try it again, but we’ve got to be able to reach agreement with Entergy or we can’t go any further.’”

Mississippi state Sen. Terry Brown told one news outlet this month: “I want to congratulate Arkansas for being able to get the big steel mill. Our incentive package was as good or maybe a little better than Arkansas’. The only problem was that we couldn’t get a [competitive] power rate through TVA [Tennessee Valley Authority]. Entergy Arkansas did a better power rate.”

Hugh McDonald, CEO of Entergy Arkansas, told Arkansas Business that a confidentiality agreement prevented him from disclosing how much energy the Big River mill would use once it’s fully operational, as well as the rates Entergy will charge the enterprise.

He said that Entergy had plenty of capacity to serve the plant, and, when asked whether Arkansas ratepayers might end up subsidizing the cost of the steel plant’s electricity, McDonald said: “This will be a special rate contract. We’ve had many special rate contracts historically. Our goal is to make sure that while commercial customers have affordable rates, the other ratepayers aren’t impacted.”

Entergy will be required to file a special rate contract with the Arkansas Public Service Commission, which McDonald said would likely occur in early March.

‘A Transformative Event’

Chitwood said the Big River plant was great news for Mississippi County just as Nucor’s decision to locate plants there had been. “Nucor was a transformative event when they came to Mississippi County in the late ‘80s and early ‘90s,” he said.

“At that time we were just about to lose the Air Force base at Blytheville. Our textile industry, which had kept thousands of our lower skilled workers gainfully employed, was just about to all vanish to the Far East. …

“I can’t imagine what this county would be like if Nucor hadn’t come. I mean, yes, we have lost population, but most rural counties have. I think without Nucor we would have been looking at devastatingly dramatic losses of population, because we would have had no reason to exist.

“That’s one of the things that I have said for years in talks to civic clubs is that every community in Arkansas — except Little Rock, which was founded as the seat of government — was founded for a reason that is now obsolete. Cotton towns, river towns, lumber towns, coal towns, market centers — none of that counts anymore. You can buy everything you want over the Internet. You don’t have to come down out of the hills to Harrison or Mountain Home. Everything is different.”

Communities like those in Mississippi County that demonstrate a willingness to fund economic development and reinvent themselves — “those communities have a chance to survive.”



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