American aluminium smelter Century Aluminum announced the signing of a two-year power contract with the South Carolina Public Service Authority (Santee Cooper) for its Goose Creek smelter, assuring its operation through at least the close of 2020.
Per the company’s press release, the contract mandates that the Mt. Holly smelter will continue to purchase one quarter of its power needs from Santee Cooper, leaving the balance of its electrical purchasing with third-party suppliers on the open market. The agreement runs through December 31, 2020, but Century retains the right to sever ties with Santee Cooper 120 days after giving notice.
“Without the extension, the plant was at risk of closure,” explained Dennis Harbath, Century plant manager. “However, even with the extension the Mount Holly plant is not viable over the long term unless we are allowed to purchase all our power on the open market, which offers much lower prices than Santee Cooper rates.”
The agreement effectively kicks the can of contention regarding power purchasing between Century and Santee Cooper down the proverbial road another two years. Century’s ultimate goal is full independence to purchase power on the open market, but the idea has been stiffly resisted by Santee Cooper.
“We have comfort in that we’ve got executive leadership in the state that gets this and can get things done,” opined Century president and CEO Mike Bless. He continued by noting that South Carolina Governor Henry McMaster “put his shoulder in this big time to bring us to the table.”
The two-year extension also preserves about 300 jobs at the plant, which has been running at half capacity for almost three years.
Century Aluminum has sought to renegotiate the contract with Santee Cooper for some time now, citing the cost of buying power from the state utility and its impact upon Century’s razor-thin margins. The two parties have been in and out of court over the matter, but it appears, apart from the instant agreement, Century and Santee Cooper are no closer to an accord today than they were at the beginning of litigation.