Santee Cooper Board extends Century Aluminum contract
Effort underway to negotiate a new three-year deal
MONCKS CORNER, S.C. – The Santee Cooper Board of Directors voted today to extend the utility’s current power contract with Century Aluminum for three months. The move gives the utility time to continue negotiations that could lead to a new three-year contract with the Mt. Holly aluminum smelting plant.
The current Mt. Holly contract expires Dec. 31, 2020. The extension would continue existing contract terms through March 31, 2021.
A potential longer-term new power deal is made possible due to excess power capacity available on Santee Cooper’s system through 2023. Century would purchase all of its electricity for Mt. Holly from Santee Cooper; currently the smelter gets 75% of its power off system, according to an arrangement Santee Cooper agreed to several years ago. According to the preliminary discussions, Century would buy up to 290 MWs from Santee Cooper, enough to continue operating one pot line and potentially reopen half of its second pot line.
The term of a longer agreement will be based on the timeframe when the excess capacity is available from Unit 3 at Winyah Generating Station, requiring Century to pay incremental costs of keeping the unit online through 2023. As currently contemplated, the three-year agreement would require the development of an experimental rate and ensure that no costs are shifted to other customers.
Extending the current contract gives Santee Cooper time to finalize terms and then seek necessary approvals for the new agreement from the Santee Cooper Oversight Committee and Santee Cooper’s board.
“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,” said President and CEO Mark Bonsall. “We appreciate the productive negotiations so far, and thank the Century team for coming to the table with enthusiasm and a genuine interest in and 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.”