Century Aluminum has signed a two-year extension of its contract with electricity provider Santee Cooper in a move that will keep the manufacturer's smelter in Goose Creek open through at least December 2020, the company said Wednesday.
The aluminum maker has been in a years-long fight with the Moncks Corner utility over the price of electricity used to power pot lines at the plant. Electricity is the single biggest production cost for the Mount Holly smelter, accounting for 40 percent of expenses.
Century said in a statement that the extension will let it continue negotiations to eventually buy all of its power on the open market — something the company now does at its Kentucky smelters and has been seeking to do in Berkeley County since at least 2015, when the last contract extension was signed.
Under its contract, Century can buy three-fourths of the power for Mount Holly on the open market but Santee Cooper must provide the rest.
The utility, which also transmits the electricity, has said reducing the amount it sells to the company would force other customers to subsidize Mount Holly's costs.
"Without the extension, the plant was at risk of closure," Century plant manager Dennis Harbath said in a statement. "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."
Harbath told employees about the extension during Wednesday's morning shift. The new deal allows Century to cancel its contract with a 120-day notice to Santee Cooper. Previously, the company had to provide a 60-day notice.
Mike Bless, Century's president and CEO, said he's confident Mount Holly eventually will buy all of its power from a cheaper, third-party source because Gov. Henry McMaster has expressed support for the plan.
"We have comfort in that we've got executive leadership in the state that gets this and can get things done," he said, adding that McMaster "put his shoulder in this big time to bring us to the table."
The extension will let Century retain about 300 jobs at the smelter, which has been running at 50 percent capacity since December 2015 when the plant cut production and laid off half of its workers.
Century said the extension "is the result of a compromise by both sides," including the company's agreement to dismiss an antitrust lawsuit it filed against Santee Cooper. The Fourth Circuit Court of Appeals was scheduled to hear arguments in that case Wednesday.
Santee Cooper spokeswoman Mollie Gore called the extension "the result of some good work and effort" on both sides.
The utility, for example, dropped some additional contract terms it had been seeking for the extension in order to get the deal completed, including a requirement for more advance notice when Mount Holly needs extra power from the utility.
"We appreciate the opportunity to continue serving Century with no subsidy required from our other customers," Gore said.
The antitrust lawsuit is one route Century had taken in recent years in attempts to reduce the amount of money it pays state-owned utility Santee Cooper for some of the electricity powering its Mount Holly plant. The company also tried unsuccessfully to get the state Legislature to pass a law allowing the smelter to get all of its power from a third-party provider.
The Mount Holly plant needs 400 megawatts of electricity to operate at full capacity — roughly enough to power 80,000 homes 24 hours a day. The smelter, which opened in 1979, is the nation’s newest and most technologically advanced aluminum producer. It can make about 231,000 metric tons of aluminum each year at full capacity.