A company which operates a struggling Berkeley County aluminum smelter is suing power utility Santee Cooper, claiming the state-owned utility violates anti-trust laws against monopolies.
Century Aluminum has claimed for years that Santee Cooper’s rates are too high and cause it to operate at a loss. Smelters require enormous amounts of power to operate and Century has already scaled back to half-capacity under its current agreement with the utility. That 2015 agreement requires Century to purchase 25 percent of its power from Santee Cooper and 75 percent from a third-party provider.
The company is focusing on Santee Cooper’s unique regulatory structure. While power utilities in South Carolina must negotiate any rate increases with the state to get approved by the Public Service Commission, Santee Cooper has its own oversight board chosen by the governor and approved by the
Century’s Mount Holly plant manager Marvin Dickerson claimed that creates a cozy relationship between the utility and its politically-appointed board. “When they have their rate case studies, it’s just a matter of a rubber stamp by the board,” he told South Carolina Radio Network. “We’re going to take the position that they don’t have the direct oversight that these other companies have.”
Santee Cooper said the utility has given Century $120 million worth of savings through reduced rates prior to the 2015 agreement. Spokeswoman Mollie Gore said Century’s financial troubles have more to do with plunging global aluminum prices that have wiped out its profits. “Rather than spending money on a frivolous lawsuit, Century should develop a fair, legal and realistic plan for Mt. Holly that addresses the global aluminum marketplace,” she responded in an email. “Mt. Holly’s loyal employees deserve that approach.”
Dickerson said prices are a problem, but complained Santee Cooper’s rates were 80 percent higher than the agreement’s third-party supplier. He claimed Century would be able to break even if it paid for all of its power from that third party and $12 million for the state’s cost of transmitting that power through its own infrastructure.
“We’ve tried every other option, so now we’re going to try and adjudicate this in court,” he said.
The smelter has been operating at 50 percent capacity since late 2015, when Century idled one of its two pots and laid off 300 employees. The company said its remaining 300 workers will stay at the plant as it continues to fight for a long-term power deal, but warns it loses millions of dollars under the current arrangement. Gore said Santee Cooper cannot reduce its rates any further for Century without raising rates on other customers to pay for the difference.