Yesterday, the Santee Cooper board of directors voted to give the Mt. Holly aluminum smelting plant three more months under its current contract as the two entities negotiate long-term electricity rates, Santee Cooper said in a news release.
The 90-day contract extension will give Santee Cooper time to finalize terms and approvals needed for a new agreement, the state-owned utility said. At the moment, Santee Cooper is considering offering Century Aluminum a three-year agreement that would implement an experimental rate that doesn’t come at a cost to other customers.
“In addition to helping one of our oldest industrial customers and all the people who work there, this effort would also free up transmission capacity to import additional low-priced off-system power that can benefit all of our customers,” President and CEO Mark Bonsall said.
In late October, Century Aluminum threated closure over the power contract formed with Santee Cooper in 2012. Under their original agreement, the electric company supplies 25% of the smelt’s electricity while the other 75% can come from the open market. Century Aluminum has been fighting for some time on the $16 million dollar cost of that 25%, saying it could buy electricity cheaper on the open market.
Santee Cooper has pushed back and said the loss would be too costly and have to be absorbed by tax payers.
The two parties have until March 31 to come to an agreement, but preliminary conversations have discussed the potential that Century could buy up to 290 megawatts from Santee Cooper. That would be enough to operate one pot line and possibly reopen half of its second pot line, which Century Aluminum closed at the end of last year.
“We appreciate the productive negotiations so far, and thank the Century team for coming to the table with enthusiasm and a genuine interest in an effort to work on an arrangement to benefit both parties. I also appreciate the support and guidance offered by the Department of Commerce in facilitating our discussions,” Bonsall said.