Santee Cooper, the South Carolina state utility, has approved a temporary electricity tariff to be used by Century Aluminum to maintain the company’s Chicago-based foundry plant operating in Berkeley County.
Santee Cooper’s board of directors voted on Monday to create what is being called an experimental electricity fee that could benefit Century by the end of 2023.
The vote will allow Santee Cooper to effectively develop a price for energy that is not currently available to any of Santee Cooper’s other customers.
The state concessionaire will use one of its old coal-fired boilers at Winyah station, outside Georgetown, to help meet the demands of Century, which operates the state’s only aluminum smelter.
This coal-fired unit is expected to be decommissioned and retired in 2023, which is why the special electricity tariff for Century will expire in three years.
Century and Santee Cooper have not yet formally signed a new energy contract so that the aluminum company can take advantage of the special energy tariff. But Santee Cooper’s vote on Monday is a big step towards cementing a new agreement between the two parties.
It should also help to soften the commercial relationship between Century and Santee Cooper, which has been supplying power to the aluminum plant since the start of operations in the 1980s.
The state concessionaire and the aluminum company have been fighting an endless fight over electricity prices for years.
Most companies in South Carolina cannot negotiate how much they pay for energy, but Century has been systematically pushing for special deals with Santee Cooper in an effort to buy cheaper electricity for its hungry smelter. The aluminum company also filed lawsuits, lobbied the SC Legislature and, in general, tried to get around Santee Cooper to get what it wanted.
In recent years, Santee Cooper had a contract with Century that allowed the aluminum company to buy 75% of its electricity from other energy producers to help reduce the company’s overall energy costs. But that agreement expired in late 2020.
Century warned state officials in October that, unless he reached a new energy contract with Santee Cooper, he could close his Monte. Holly plants and dismisses all of her employees in Berkeley County.
This announcement sparked emergency negotiations between Century, Santee Cooper and the SC Department of Commerce, which is responsible for recruiting and maintaining companies in South Carolina.
Dan Ray, acting president of Santee Cooper, said that these negotiations led to the experimental power rate that Santee Cooper revealed on Monday.
“This was a great team effort, not just from Santee Cooper, but from our customer Century Aluminum,” said Ray.
Santee Cooper leaders hired an outside consultant to study the experimental power rating and said that offering the deal to Century would not hurt any of Santee Cooper’s other customers.
“It’s a win, win, win in every way,” Mark Bonsall, CEO of Santee Cooper, told the board.
Century did not respond to an email asking for comments on this story. But last month, the aluminum company said it could expand production at its South Carolina plant if it successfully negotiates a new three-year contract with Santee Cooper.
The energy deal, Century said, could allow the company to restart part of the smelting operations that closed at the plant in 2015. This, in turn, could lead to the hiring of 70 new employees at the plant.
Reach Andrew Brown at 843-708-1830 or follow him on Twitter @andy_ed_brown.