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To: Douglas V. Fant who wrote (81222)	12/10/2000 4:41:42 PM
From: excardog	Respond to of 95453

Douglas Some effects of the power crunch I notice the power sale nets a tidy amount (52 mil): Kaiser Aluminum Announces Temporary Curtailment of All Northwest Smelter Capacity Power Sale to Help Mitigate Employee Impact, Benefit Company and Provide Power for Needs of the Region HOUSTON--(BUSINESS WIRE)--Dec. 10, 2000-- Kaiser Aluminum & Chemical Corporation, the operating subsidiary of Kaiser Aluminum Corporation (NYSE:KLU - news), announced today that it has begun a temporary curtailment of an additional 90,000 metric tonnes per year of its Northwest smelter capacity and has sold December power provided by its existing contract with the Bonneville Power Administration (BPA). This curtailment, combined with earlier curtailments, will result in the complete idling of all the company's Northwest smelter capacity. The company expects to make additional power sales and to keep its Northwest smelters curtailed until they begin receiving power after October 1, 2001 from the BPA under a new contract that provides power sufficient to operate approximately 40% of Kaiser's 273,000 metric tonnes of Northwest capacity through September 30, 2006. ``The Northwest region needs energy now to cover its deficit, and we have energy that we believe can benefit the region and its residents,'' said Raymond J. Milchovich, president and chief executive officer of Kaiser Aluminum. ``At the same time, we intend to mitigate the impact on our employees and improve Kaiser's financial position.'' Kaiser provides for eligible hourly employees to receive continued compensation in the event of a curtailment, in accordance with its labor agreement, including up to approximately 70% of an employee's base wage for a period of time determined by length of service. In addition, eligible employees will receive full medical benefits and continued credit for pension service during the anticipated curtailment period. About 400 hourly employees are affected by the expected 10-month curtailment. The company intends to maintain a salaried workforce at Mead during the curtailment in anticipation of the partial operating rate achievable under the new contract. ``We plan to work together with our employees and others to continue to communicate about the region's energy crisis,'' said Milchovich. ``Our longer-range efforts also could potentially include involvement in economically viable power generation projects that address the supply deficit, accommodate regional growth, and preserve industry jobs.'' The net proceeds generated by this power sale, approximately $52 million to be received in January 2001, will be reflected in the company's fourth-quarter results along with associated employee costs and curtailment expenses. Fourth-quarter results also may be impacted if the company determines that the uncertain long-term outlook for power in the region requires an asset impairment charge against a portion of the smelters' present book value, which is approximately $200 million. The company will effect the curtailment by discontinuing operation of 90,000 tonnes of capacity that had been operating at the 200,000-tonne capacity Mead, Washington, smelter. The curtailment is expected to be complete within several days. Potlines at the company's 73,000-tonne Tacoma, Washington, smelter have been fully curtailed since June 2000 - and portions of Mead's capacity had been curtailed in June and November. With today's curtailment, the company's overall primary operating rate would be roughly 41%, compared to an average of approximately 82% in 1999. The company's Trentwood, Washington, facility and the Tacoma rod mill will continue to operate with BPA power. With the curtailment of Mead, Kaiser has arranged for Trentwood and Tacoma to be supplied with purchased metal from other sources. Kaiser Aluminum is a leading producer of alumina, primary aluminum, and fabricated aluminum products. MAXXAM Inc. (AMEX:MXM - news) directly and indirectly holds approximately 63% of the common stock of Kaiser Aluminum Corporation.