Alcoa and the government of Quebec have reached an agreement over electricity rates, saving an estimated 3,000 jobs in the province.

In October, the aluminum company had threatened to close down three of its Quebec facilities after Hydro-Québec said it would hike how much it charges the company for electricity.

At the time, Premier Pauline Marois called the response "alarmist" and unnecessary. 

Today at a news conference in Baie-Comeau, Premier Pauline Marois announced the province had agreed to continue offering preferential rates for the Bécancour and Deschambault facilities until 2030 and for the Baie-Comeau plant through 2036.

In exchange for the preferential rates, Alcoa will invest $250 million over five years to modernize its three Quebec plants.

Radio-Canada says Alcoa's power rate is going up to 3.3 cents per kilowatt-hour under the deal, from 2.8 cents previously. That compares to the normal rate of 4.3 cents it faced on Jan. 1 without today's deal with the Marois government.

“The agreement will help Alcoa achieve its goal of moving down the global aluminum cost curve," said Bob Wilt, president of Alcoa Global Primary Products.

The company is no longer pursuing a plan to modernize its Baie-Comeau facility at a cost of $1.2 billion, although it has committed $150 million to the site.

Alcoa closed two of its potlines — a series of containers used to reduce or smelt alumina before forming aluminum — at the Baie-Comeau plant last year. The potlines had a combined annual capacity of 105,000 tonnes, and Alcoa had planned to build a new potline at the site.

The company has agreed to support the government’s electric transportation strategy by considering the Baie-Comeau facility as a potential source of aluminum for emerging technology applications, including aluminum-air batteries for electric cars which Alcoa is developing with technology company Phinergy.

In a statement, Alcoa said it hoped to take advantage of the increased amount of aluminum used in automaking in order to expand its business. 

Automakers have indicated that aluminum body sheet content in North American vehicles “is expected to quadruple by 2015 and increase tenfold by 2025, from 2012 levels,” Alcoa said.