With only days to spare, Santee Cooper has averted the loss of what is by far the South Carolina utility's largest industrial customer, Century Aluminum's Mount Holly, South Carolina, smelter.
The state-owned utility said Monday that under a new, three-year agreement that still needs to be approved by the boards of Santee Cooper and Century Aluminum, the aluminum company will continue to secure 100% of the power needed for its Mount Holly smelter from the utility through 2018.
Santee Cooper spokeswoman Mollie Gore noted, however, that Century will need only half as much power as it has under its current power-supply pact, which expires on December 31, 2015.
Under the existing agreement, Century requires about 400 MW; one-quarter of it sourced from Santee Cooper's generation fleet and three-quarters from third-party suppliers. Under the new agreement, the total amount needed will be reduced to 200 MW, with 50 MW coming from Santee Cooper's power plants and 150 MW from third-party suppliers.
"We will take ownership of the power [provided by the third-party suppliers] at our border, and deliver the power to Mount Holly," Gore said, adding that Santee Cooper "made a very good offer to Century" regarding its power rates; that Century will be getting power at the lowest rates Santee Cooper offers; and that Santee Cooper's industrial rates would need to rise 29% to equal the national average and are "among the lowest in the Southeast."
Details of the rate offer are not public information, Gore said, but will be available through a Freedom of Information Act request after the deal is approved by the Santee Cooper and Century boards.
Chicago-based Century did not respond to a request for comment. However, the aluminum maker said in a statement that the agreement "would provide enough power to operate Mount Holly at approximately 50% capacity and retain approximately 300 jobs. The contract would have a three-year term and could be terminated at any time by Century on 60-day notice."
Century also said that it "intends to work with state legislators to pass legislation in 2016 that would allow Century to access market power for all of its power supply," rather than only 75% of its needs, as the existing and new contract allow for.
Asked if Santee Cooper would support such legislation, Gore said it "would be too soon to say in the absence of details," but that the utility will do what it can to protect jobs at the Mount Holly site.
SANTEE COOPER ADDING CUSTOMERS
Century said in October that it had reached a deal with a third-party supplier to provide all of its power starting in January 2016, but that Century had been unable to reach an agreement with Santee Cooper to transmit all of the power.
Santee Cooper holds a 45% ownership interest in the two 1,117-MW nuclear units now under construction at the V.C. Summer station in Fairfield County, South Carolina, and has indicated that even without the loss of Century's business the utility will have more capacity than it needs when the new units come online in mid-2019 and mid-2020.
To help balance its generating capacity and load, Santee Cooper has been adding new wholesale and retail load. Among other things, Seneca Light & Water, a 40-MW municipal utility in Seneca, South Carolina, has decided to have Santee Cooper replace Southern Power as its wholesale power supplier, and the municipal utility in Waynesville, North Carolina, plans to switch to Santee Cooper from Duke, its current wholesale supplier.
Santee Cooper also expects to add a $500 million Volvo vehicle assembly facility in Berkeley County, South Carolina, to its list of large industrial customers.
