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Goose Creek and Santee Cooper face off in court over power supply for SC aluminum smelter

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Lawyers with Santee Cooper and the city of Goose Creek faced off in court on Thursday as they disputed who has a right to provide power to Century Aluminum's smelter in Berkeley County. File/Lauren Petracca/Staff

The tug-of-war over who will get to power Century Aluminum's smelting plant in Berkeley County continued Thursday, with attorneys for Santee Cooper and the city of Goose Creek facing off in state court. 

Santee Cooper, which is South Carolina's state-run electric utility, has provided electricity to Century's operations at the Mount Holly facility since the 1980s. But it's contending with a unique challenge from elected leaders in Goose Creek.

The town's residents voted last year to create a new municipal electric utility. The mayor and city council officially formed that utility earlier this year with the expectation of supplying power to a single customer: Century. 

That effort has since exploded into a bitter legal dispute, which was on full display during the hearing Thursday. 

The legal questions in the case are complicated but the core issue is whether Goose Creek can take over control of Century's power supply. Executives for the aluminum maker have suggested they will be forced to close the plant and layoff its workforce if the city is unsuccessful in that effort.  

Goose Creek filed its lawsuit in Berkeley County earlier this year, arguing the city is allowed to form a municipal utility, buy power from outside South Carolina and resell it to Century. 

"The law is very clear. It's not what Santee Cooper wants the law to be," Mitchell Willoughby, Goose Creek's attorney, said during the hearing.

Santee Cooper maintains it has an exclusive right under state law to serve Century's plant and the property it is located on.

Santee Cooper's attorneys pointed out that other power customers in South Carolina aren't allowed to pick where their electricity comes from. That fact is determined by what area of the state they live in and which utility serves that territory, they contend. 

"That's the public policy. That's the regulated energy market in South Carolina," John Lay, Santee Cooper's attorney, said. 

"We don't allow customers to shop for power in the open market," Lay added. 

Recent evidence and allegations made in the case, however, go far beyond the underlying legal disputes. 

Goose Creek's attorneys have accused Santee Cooper of trying to illegally influence the referendum last year and said Santee Cooper's leaders are pursuing a strategy of slowing and obstructing the city's plans.  

"They have done everything to obstruct and kill this," Willoughby said during the hearing. "They are mad. They are angry they are losing this customer."

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City attorneys leveled those allegations based on an email Santee Cooper employees shared last year. In it, Ray Pinson, manager of local government and community relations, spelled out how the state-run utility should respond to Goose Creek's plans. 

"Obviously, this is a bad idea for the City of Goose Creek and has economic impacts to Santee Cooper as well," Pinson wrote in the email that Century obtained through the S.C. Freedom of Information Act.

"To convolute matters, Santee Cooper cannot be seen as an obstructionist, nor should we invite a legal battle with a local stakeholder," the note said.

Pinson added, "Our mission, as I see it, is this: Identify as many obstacles on as many fronts as possible in their plan to form a (city-run utility); quietly relay those obstacles to the Mayor and Administrator; and pursue a short-term goal of delaying this process with a long-term goal of killing it."

Santee Cooper spokeswoman Mollie Gore said the email was meant to lay out the issues and concerns the state-run utility had about Goose Creek's plan. She also said the Monck Corner-based utility publicly shared those concerns at a city council meeting, but those public comments were in no way meant to interfere with the referendum. 

Santee Cooper also has some new evidence of its own, focusing on the annexation agreement between Goose Creek and Century's property, which is just outside the city limits. The agreement, Santee Cooper alleges, shows what the city created this year is a "sham" utility. 

The agreement says Century will have "sole discretion" over which power plants Goose Creek buys electricity from and the rates the city charges. 

Santee Cooper attorneys said that language proves the municipal utility would effectively be controlled by Century, which has sought for years to escape its power contract with Santee Cooper. 

"It's not a Goose Creek utility. It's a Century utility," Lay, one of Santee Cooper's lawyers, said Thursday. 

Circuit Court Judge Roger Young ended the hearing Thursday without issuing a ruling, but said he would move quickly to resolve the lawsuit. 

In the meantime, Santee Cooper is appealing a recent decision by the Federal Energy Regulatory Commission ordering it to allow Goose Creek to use its power lines to serve Century. 

But that was before the annexation agreement between the city and Century was made public. Santee Cooper is now arguing the federal regulatory agency didn't have all of the information it needed when it ruled earlier this month. 

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

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