New York Power Authority and Alcoa said they have reached an agreement that will save hundreds of jobs at Alcoa's Massena, New York smelters in the near term and preserve hundreds more positions under its planned long-term modernization project.

Alcoa operates two smelters in Massena with a combined production of 255,500 metric tons per year.

Because of the 60% decline in aluminum prices, Alcoa was considering curtailing operations at both smelters, which would have eliminated 1,100 jobs.

In a statement, NYPA President Richard M. Kessel said, It is critical to the economy and the future of Northern New York that we step in and work with Alcoa to avoid losing this community-anchoring company and the largest private sector employer in the region with hundreds of high-paying manufacturing jobs.

We understand Alcoa's temporary business situation in the context in the global economy, he added, but now we are confident that the aluminum manufacturer will have a bright future in Massena.

In a statement Alcoa U.S. Primary Products President John Thuestad said, This extraordinary effort by NYPA will save the Alcoa operations in the North Country, retain nearly 1,000 jobs in the region, and preserve the company's expansion plans.

The agreement includes:

•  Exchanging a portion of Alcoa's firm hydropower allocation from the idled East Plant to the West Plant and transferring its ‘interruptible hydropower allocation to the East Plant;• Waiving for two years the minimum charges related to its power allocations at the East Plant;• Temporarily lowering Alcoa's job commitment threshold to 90%, which will conform with NYPA's job commitment requirements of other industrial companies; and• Allowing Alcoa to make payment to the North County Economic Development Fund as projects are approved instead of capitalizing the funds in full upfront.Although the decision to curtail and the necessity of some job reductions is difficult, these steps and particularly NYPA's cooperation in working with us through these unprecedented times, are critical to the survival of the two Massena plans and they preserve the future of the Massena Modernization Project, Thuestad said.