Mayor, sole customer praise city’s electric utility
OmniSource: Power crucial to expansion
8/23/2013The one-year anniversary of Toledo Public Power Co. — the city’s municipal electric utility, which was created on paper in 2006 but took six years to get established — was recognized Thursday by Toledo Mayor Mike Bell and officials from metals-recycler OmniSource Corp., its lone customer.
OmniSource, 5130 N. Detroit Ave., gets six megawatts of power from Toledo Public Power, which buys electricity wholesale from American Municipal Power, an Ohio-based nonprofit municipal utilities group. Toledo joined AMP in 2009, giving the city the right to buy power at wholesale rates.
The city bought an electric substation and distribution lines at OmniSource to supply the firm. The contract helped OmniSource preserve about 200 jobs while the company pays the city about $40,000 annually for the power.
Michael Herrmann, OmniSource division manager for northern Ohio, said the municipal power company played a role in OmniSource’s decision to expand operations at its North Toledo site.
“The development of Toledo Public Power was a long and involved process, but it was the unwavering conviction of Mayor Bell and his staff that continued to push the project forward for the long-term benefit of the city of Toledo,” Mr. Herrmann said.
“OmniSource must remain competitive and the development of Toledo Public Power has helped us to accomplish that objective,” he said. “Concurrent with the development of Toledo Public Power, OmniSource was evaluating an investment of $16 million to replace the auto shredder system that we were operating at the North Detroit Avenue facility. The heart of the new system was a 6,000 [horsepower] electric motor that would allow us to more efficiently shred automobiles and other post-consumer products that would ultimately be recycled into new steel.”
Mr. Herrmann said the electricity costs were offset by Toledo Public Power.
“Riding on this decision was dozens of construction jobs, the retention of over 25 union jobs and the development of four new jobs at OmniSource,” he said. “The development of Toledo Public Power provided OmniSource with market competitive electrical rates along with the added dimension of demand schedule flexibility which provided OmniSource with the ability to cost effectively expand our operating hours.”
The company also added 25 new jobs.
OmniSource invested $2.5 million in a copper-analyzing process to improve the quality of its shredded metal product and another $21 million in an “advanced metal recovery system,” he said.