PacWest: Plans for proposed Newport smelter on hold

After months of limited communication between PacWest Silicon and Pend Oreille County officials about a proposed silicon smelter near Newport, the company confirmed in a letter to Gov. Jay Inslee the project is on hold for “the immediate future” because of regulatory and community challenges.

In a Jan. 15 letter to Inslee, PacWest stated there has been “a great deal of uncertainty associated with development in Pend Oreille County including infrastructure, zoning, energy delivery and rail capabilities.”

“When coupled with the inability of the county to zone lands, our project has been delayed significantly and is not able to move forward at the moment,” the company wrote.

The proposed smelter has been met with opposition from the Kalispel Tribe and residents in Pend Oreille and Bonner counties who raised concerns about air pollution, among other things.

Inslee wrote a letter to PacWest in October asking for an update on the project and raised concerns about lack of communication between the company and the community, tribes and local governments.

In its letter to the governor, PacWest cited difficulty with securing a meeting with the Kalispel Tribal Council to discuss environmental impacts of the proposed smelter and the Pend Oreille Public Utility District’s decision to return earnest funds and end work with the company.

The Pend Oreille PUD sent a letter to PacWest Silicon CEO Jayson Tymko in December, stating it would terminate a “cost reimbursement agreement” because of a lack of communication from the company about plans to extend electricity to the proposed smelter site. Because the Pend Oreille PUD hadn’t heard from PacWest Silicon in six months, it refunded $315,700 of the company’s $500,000 deposit.

Pend Oreille County Commissioner Mike Manus told The Spokesman-Review in December that PacWest Silicon was unresponsive to communication initiated by the county for several months.

PacWest claimed in its letter it broke off collaboration with the PUD as a result of “bad faith actions,” such as price and timeline for connection of utility service. The company said utility connection time frame extended from 12 to 14 months to three years and cost increased from $10 million to $12 million to more than $50 million.

The Pend Oreille PUD said in a statement it has made every reasonable effort to facilitate PacWest’s request to connect to the county’s electric system.

“This kind of a project takes more than time and money – it demands consistent and clear communications between the customer and the utility. In that regard, PacWest failed to do its part. The public records are clear that the PUD has repeatedly attempted to communicate with PacWest and establish reasonable expectations for project scope, costs, and timelines,” Colin Willenbrock, the PUD’s general manager, said in a statement. “Unfortunately, the PUD’s efforts to communicate and set reasonable expectations for PacWest have been met with silence. Instead of working with the PUD through its request, PacWest chose to effectively shut-off communications with the PUD over a year ago. The PUD will stand ready to serve PacWest if its leaders are willing to reengage communications.”

Another point of contention is the 188-acre site the PUD sold to PacWest to build the smelter.

PacWest indicated it was denied access to the site by the PUD and was advised not to initiate a zoning change for the property “because the optics would be better if we followed the ongoing process to address the overall zoning issues in the County.”

The county initiated a comprehensive plan amendment that would have redesignated about 65% of land for the project from public to rural use. That change would have potentially opened up the land to private development, which includes the proposed smelter.

Pend Oreille County Commissioners in December subsequently rejected the proposed zone change.

PacWest was not immediately available for comment Tuesday.

PacWest Silicon and its parent company, Edmonton, Alberta-based HiTest Sand Inc. have pursued construction of the silicon smelter since 2016 on the site south of Newport and the Pend Oreille River, adjacent to the Idaho border.

The company stated the $325 million smelter would generate new tax revenue, create more than 150 jobs and attract additional private investment in the community.

Responsible Growth*Northeast Washington, a group opposing the smelter, is moving forward with a lawsuit over the Pend Oreille PUD’s sale of the smelter site to PacWest, alleging the company failed to follow proper procedures for the disposal of public land.

A Spokane Superior Court dismissed the lawsuit, but the group is appealing that decision in the Court of Appeals in Spokane. A Jan. 30 court hearing is scheduled on the matter.

PacWest stated although the project is on hold, it will remain an “active landowner in Pend Oreille County with a focus on long- and short-term opportunities should the regulatory climate become more transparent.”

“It is our strongly held opinion that the lack of professional behavior on the part of Pend Oreille County and the PUD has not only cost the local community 150 family wage jobs and economic activity, it has cost the state of Washington a major investor in the green economic supply chain,” the company wrote.

The company also wrote it is willing to provide Inslee with quarterly updates on its plans in the state.