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Santee Cooper board votes down Century Aluminum power proposal

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By Liz Segrist
lsegrist@scbiznews.com
Published Nov. 30, 2015

Century Aluminum is one step closer to possibly shuttering its Mt. Holly aluminum smelter in Berkeley County.

The Santee Cooper board of directors unanimously voted down a power proposal from Century Aluminum today, as the dispute over transmission of power to the plant continues. Century Aluminum, which owns the aluminum smelter, wants Santee Cooper to deliver power from a third-party provider across its transmission lines.

The smelter in Goose Creek could shut down and lay off about 600 employees if an agreement is not reached by Dec. 31, when its current power contract expires, according to a recent letter from Century to smelter employees.

Santee Cooper spokeswoman Mollie Gore said the utility provider previously turned down the proposal. The board voted 10-0 against it during a meeting over the phone this morning.

“The board voted unanimously to reject the proposal, noting that it does not meet the best interest test that we are statutorily required to meet and it would not be fair to our other customers,” Gore said in an email.

Century Aluminum has filed a Warn notice (.pdf) for the potential plant closure, which projected the company would lay off 487 workers on Dec. 22. This notice does not include the roughly 100 contractors that account for the plant’s 600 employees, Century spokeswoman Samantha Dubay said in an email. The Warn filing was made with the S.C. Department of Employment and Workforce, as required by the Worker Adjustment and Retraining Notification Act.

Santee Cooper Board Chairman Leighton Lord urged the roughly 30 Century employees at the meeting to encourage their owners to continue the existing deal.

According to the agreement made in 2012, Santee Cooper provides a quarter of the electricity to the smelter, with a natural gas generator providing the rest. The deal was reached to prevent the smelter’s closure at the time and Gore said it has saved Mt. Holly around $130 million since June 2012.

The disagreement over power transmission has been ongoing since before Century acquired the plant from Alcoa in 2014.

According to Gore, Santee CEO Lonnie Carter said that today’s decision was difficult but that the board has to be fair to all of its customers. The state-owned utility services 27 industrial customers across the state, totaling more than 7,000 employees.

Century said the issue stems from getting electricity from another provider; Santee Cooper said the problem is with a decline in aluminum prices.

Like other struggling U.S. aluminum producers, Century has had to either curtail or shut down some of its other U.S. plants because of declining metal prices caused by cheaper Chinese aluminum. The company closed its Ravenswood, W.Va., smelter in July, according to Reuters, and began operating its Hawesville, Ky., plant at 40% of capacity this fall, according to a news release from the company.

Century President and CEO Michael Bless said in a statement that the Century smelters are competing against “the improper export of unfairly subsidized Chinese aluminum products.”

“Between now and Dec. 31 when the power contract expires, we will do everything we can to fight to get a new power contract that allows the plant to stay open,” the letter to employees said.

Reach staff writer Liz Segrist at 843-849-3119 or @lizsegrist on Twitter.

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