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Feds rule Santee Cooper can't stop Goose Creek from powering SC aluminum plant

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A federal panel ruled this week that Santee Cooper can't stop Goose Creek from supplying power to Century Aluminum's Berkeley County smelter (above). Lauren Petracca/Staff

Santee Cooper can't stop Goose Creek from setting up a new competing municipal electric utility to  serve South Carolina's only aluminum smelter, according to a ruling this week. 

The Federal Energy Regulatory Commission issued an order Thursday instructing the state-run utility to give the city access to its power lines. 

The order is a victory for the city, which wants to buy electricity from outside of South Carolina and transport that power to the Century Aluminum plant off U.s. Highway 52. 

But the ruling is unlikely to resolve the conflict over who gets to power Century's operations in South Carolina. 

Elected leaders in Goose Creek and executives with the Chicago-based company joined together last year to formulate a plan where the city would create a utility to supply the company's Mount Holly smelting operations. 

The deal was intended to allow Century to sidestep Santee Cooper, which has powered the plant for four decades, and buy cheaper electricity from other providers. 

In return, Century promised to allow Goose Creek to annex its property, bringing with it new tax revenues estimated a $1 million annually.

City officials convinced residents last year to support a referendum they needed to set up the utility. 

Since then, Century, Goose Creek and Santee Cooper have been locked in several legal battles over which side has a right to supply electricity to the plant and the surrounding property.  

The case decided by FERC this week was filed in March after Santee Cooper declined to give the city access to its transmission lines. Century and Goose Creek followed that up with two lawsuits against Santee Cooper in state court.  

Century, which also operates plants in Kentucky, Iceland and Holland, continues to argue it will need to shut down its operations in Berkeley County unless it can buy all of its power from a supplier other than Santee Cooper.

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Century currently gets 25 percent of its electricity from the power plants owned by the Moncks Corner-based utility, but that contract is set to expire at the end of the year. 

The company did not respond to requests for comment. 

Santee Cooper maintains it has an exclusive right to power Century's Mount Holly property. It said some of its fixed costs will be pushed on to other electric customers if Century is allowed to buy its power from other sources. 

Attorneys for Santee Cooper tried to argue in front of FERC that Goose Creek's new utility is a "sham" because it was set up for the benefit of a single company. The commission's four current members, who are appointed by the president, did not see it that way. 

"Goose Creek has acted within its authority as a political subdivision of the State of South Carolina to form a municipal electric utility," the commissioners wrote in their order. "We disagree with Santee Cooper’s claim that Goose Creek would not be engaged in the sale of electric energy because it is simply a 'sleeve' or 'agent' for Century Aluminum." 

Goose Creek Mayor Greg Habib, who spearheaded the city's deal with Century, said he was "encouraged" by FERC's ruling. But he is also aware that it is only the first step in what is expected to be a drawn out legal fight. 

"I'm sure there will be appeals, but we believe very strongly in our case," Habib said. 

Santee Cooper spokeswoman Mollie Gore said the leaders of the utility are reviewing the decision and would soon decide whether to file an appeal. 

Santee Cooper does not have a problem with Goose Creek establishing a lawful municipal electric utility, Gore said, but it does have a problem with the city setting up a new utility to help Century circumvent the law.  

For now, the fight between Santee Cooper and Goose Creek is likely to pivot to Berkeley County court. While FERC ruled Goose Creek can access the power lines, its commissioners said the state court is better equipped to decide if Santee Cooper has an exclusive right to serve Century's property. 

If Santee Cooper prevails in that case, FERC said it may be forced to to reconsider its ruling. 

Reach Andrew Brown at 843-708-1830 or follow him on Twitter @andy_ed_brown.

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