Kentucky Power Welcomes New Industrial Customer to Central Appalachia

Braidy Industries Chairman and Chief Executive Officer Craig Bouchard announces plans to locate a $1.3 billion aluminum rolling mill in eastern Kentucky. Photo by Allison Barker.

(Story by Allison Barker)

ASHLAND, Ky. – In 2012 when Brad Hall joined Kentucky Power as an external affairs manager to revitalize its economic development efforts, he knew selling eastern Kentucky would not be easy.

On Wednesday, he joined Kentucky Power President Matt Satterwhite, Kentucky Governor Matt Bevin, state and local leaders and many other supporters as Braidy Industries announced the location of a $1.3 billion aluminum rolling mill in the middle of Kentucky Power’s service territory. When the mill goes online in 2020, its electricity demand is expected to be 60 megawatts.

“Braidy Industries represents one of the many important partnerships Kentucky Power is forming to bring business and jobs to eastern Kentucky,” Satterwhite said. “Economic development is at the center of our long-term strategy. When Kentucky Power and other AEP companies invest in economic development, we can help attract large commercial and industrial customers, like Braidy Industries. And when we do, our customers gain jobs, government gains taxpayers and we gain new customers.”

Braidy’s 2.5 million-square-foot mill is expected to employ 550 workers with average salaries and benefits of $70,000, as well as another 1,000 construction workers during construction, which is set to begin in 2018.

Braidy Chairman and Chief Executive Officer Craig Bouchard credited Kentucky Power and AEP in helping Braidy choose the Kentucky site for its mill.

“We have negotiated an efficient package with Kentucky Power and AEP because they wanted us in eastern Kentucky,” Bouchard said. “I believe we will have the lowest energy cost of any rolling mill producing aluminum in the United States. The competitive advantage of that is spectacular.”

Braidy seeks to become the nation’s low-cost producer of high quality auto body sheet aluminum, plate and ultra-high strength alloys for the aerospace industry. The mill will open with capacity of 370,000 tons per annum, producing series 5000, 6000, and 7000 aluminum sheet and plate products. The aluminum is used not only in automobiles, but also airplanes to make them lighter.

Satterwhite said the Braidy project is a game-changer and is the first in a long-term strategy to establish central Appalachia as a preferred region for the aerospace and automotive industry.

Soon after being named Kentucky Power president in 2016, Satterwhite devised a plan, now dubbed Appalachian Sky. The initiative’s purpose is to aggressively attract aerospace and aviation industry to AEP’s central Appalachia service region through economic development. Appalachian Sky was inspired by the intelligence and work ethic of the coal mining communities as captured in the movie “October Sky.”

The work that led to the creation of Appalachian Sky was sparked by the completion of a comprehensive regional work force analysis in AEP’s Kentucky territory. The research showed that coal miners, many of whom have lost their jobs when mines closed in recent years, have the metal-working skills that companies like Braidy Industries need. The study, which was funded in small part with Kentucky Power economic development grants, concluded that there were eight times the national average of skilled metal workers in the region.

Kentucky Power and AEP recognized an opportunity and commissioned a leading aerospace consultant to determine the viability of aerospace in Appalachia’s coal and steel country. The consultant produced a report certifying 17 counties as AeroReady in the Tri-State region of Kentucky, Ohio and West Virginia, furthering the claim that aerospace can thrive in the area.

Dr. Michael E. Porter, professor at Harvard Business School and a global expert on competitiveness and economic development, serves as a Braidy Industries board member. Porter assisted the company in assessing Kentucky’s competitive advantage as a site. Both Porter and Bouchard cited Appalachian Sky as helping make the decision to locate in eastern Kentucky.

“Eastern Kentucky has significant competitive advantages, including its proximity to the leading automotive and aerospace customers, low energy costs and a skilled and available work force for heavy manufacturing,” Porter said. “The decision to locate in eastern Kentucky will provide an opportunity for Braidy Industries and the community to work together to transform the region’s business environment as well as attract related companies.”

That economic ripple effect is exactly what Kentucky Power is banking on to boost its dwindling customer base and load. Since 2012, the company invested nearly $2 million in economic development in eastern Kentucky, including water and sewer projects, broadband expansion, industrial site development and certification, work force research and other endeavors.

“Braidy’s CEO Craig Bouchard and Governor Matt Bevin both thanked Kentucky Power and gave a lot of credit to our leadership,” Satterwhite said. “I thank our employees for all their work and support for getting to this first victory. It is a new day in eastern Kentucky and Kentucky Power.”