Shasta paper plant closes because of high natural gas prices

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Posted at 9:21 a.m. PST Friday, Dec. 1, 2000

Shasta paper plant closes because of high natural gas prices

ANDERSON, Calif. (AP) -- One of the largest employers in Shasta County is closing for at least a week because it cannot afford soaring natural gas prices.

Shasta Paper Co. employs about 460 workers, almost all of whom will be laid off until gas prices drop, Human Resources Manager Tim Smith said Thursday.

``It's a devastating announcement to make any time. The devastation is compounded because it's the holiday season,'' Smith said.

The order to shut the plant came from corporate headquarters in Minneapolis, he said.

The plant will close Monday.

Recent estimates by Pacific Gas and Electric Co. put December gas rates at 65 percent above last year's numbers. Shasta Paper officials said they expected to pay 572 percent more for natural gas in December compared to last year if they kept the plant open.

The company does not buy its gas directly from PG&E, but from a third-party energy provider that uses PG&E lines.

PG&E spokeswoman Staci Homrig said the utility had not changed its delivery charges for more than a year.

Many employees don't expect to be back for several weeks.

``I think it's permanent,'' said Phil Yoder, who has worked at the plant for 30 years. ``My goal was to retire at 62 because they will pay your medical benefits until you're 65. Now, I will have to buy insurance for my wife and I.''

Employees were given a form letter Thursday to send to state legislators and the California Public Utilities Commission. The letter demands action to fix ``California's gas and electrical regulation issues.''

The shutdown could cripple the plant, said Sam Piearcy, a maintenance mechanic and president of the United Papermakers International Union Local 1101.

``If I was a customer buying from an employer who all of the sudden is shutting down because of gas prices, it would make me think,'' he said.

http://www.bayarea.com/c/breaking/docs/082183.htm

-- Martin Thompson (mthom1927@aol.com), December 01, 2000


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