Santee Cooper locked down a 45-year sales agreement Monday with its biggest customer, a buyer that previously moved some of its power business to another supplier.
The deal calls for the state-owned utility to provide electricity to Central Electric Power Cooperative through at least 2058.
Financial terms were not disclosed. Central Electric’s board directed its staff last year “to push hard for long-term rate and contract improvements,” said Lawrence J. Hinz, chairman.
Santee Cooper’s board of directors approved the long-term extension Monday. Central Electric officials signed off on the deal earlier this month.
The contract affects 1.5 million co-op customers around the state.
“Today is a win for South Carolina, which has enjoyed the fruits of our partnership with Central for more than 60 years already,” said Lonnie Carter, president and CEO of Moncks Corner-based Santee Cooper.
One of the immediate benefits is that the extension could lower Santee Cooper’s borrowing costs because it will demonstrate long-term stability to Wall Street’s bond-rating firms, Carter said.
“This should translate into lower interest rates on our debt, which helps us keep power costs low for all our customers,” he said.
While Central Electric remains Santee Cooper’s biggest buyer of power, the cooperative has spread its supplier base to other providers. In 2009, for example, it announced it would shift 1,000 megawatts of its load to Duke Energy Carolinas beginning this year.
That decision, along with slumping demand, prompted Santee Cooper to scuttle a controversial $1.2 billion coal-fired plant it had planned to build near Florence.
Ronald J. Calcaterra, CEO of Central Electric, said in a statement Monday that the new long-term supplier contract “puts in place significant changes that will help make our two organizations partners in power-supply planning and delivery.”
“It will be a true and effective partnership that aligns the interests of both parties,” he said.
Contact John McDermott at 937-5572.